Thursday, July 9, 2009

Telepresence is evolving; Mass availability still eludes

Nine months ago, I had written about this new Aha! technology that had the potential to be the killer app for business communication services. It is heartening to note that Telepresence has developed considerably during this period. In particular, the last couple of weeks have seen a flurry of announcements: more public rooms at business centers and hotel chains, demo of inter-carrier connectivity of Cisco telepresence rooms and the promise of cheaper telepresence equipment.

Yet, Telepresence remains a premium service, in spite of Cisco's protestations, available to a few hundred enterprises worldwide, and even at these early adopters, it is usually restricted to a few locations each. A 3-4 room in-house implementation will set an enterprise back by about a million bucks, hard to come by in these hard times. While the business case for the investment is quite robust, most CFOs don't want to wait for 3 years for payback.

What can change this, and what can we learn from other technologies that have succeeded in the hockey-stick phenomenon of adoption?

1. Interconnection
Interconnection is at the heart of communications, yet Telepresence is only now beginning to get interconnected. Inter-vendor interconnection is still some time away. It's a shame if you have implemented TP across five of your offices but cannot connect to your customer, supplier or partner locations. OK, you might be able to connect to other rooms that use the same equipment vendor as yours, but there are at least 3 major vendors and many other emerging ones. Until such time the major TP vendors like Cisco, Polycom and HP do not get together to enable interconnection, the value of TP will be limited.

2. Open / Standards
The last thing that Telepresence needs is exclusive tie-ups and restrictions. For the technology to proliferate and fulfill the promise that video-conferencing failed to deliver, we need the same open standards approach that has helped, for instance, GSM to emerge as the global mobile system. Vendors holding technology / feature roadmap cards to their chests or favoring one operator over the other are sure recipes for failure. We need open dialog on the future of telepresence.

3. Scale and Pricing
Few enterprises will want to shell out $1 million or more to get onto the TP bandwagon; even for sufficient public rooms to take off, the industry would need an investment of at least $100 million over the next couple of years. Broadband and Mobile industries have shown us the virtuous cycle of affordable pricing - increase the addressable market, get more users on the network, use scale to further reduce costs and thus lower tariffs. Another technique that has worked in the past to encourage mass adoption is smaller pack size (think shampoo sachets, 25c mobile recharge vouchers, etc.). Single screen and/or desktop variants as well as web-enabled rooms are required to reduce entry barriers and encourage trial. Vendors and carriers need to re-engineer the TP cost structure and commercial models. Think Tata Nano.

The next 12 months will tell us if telepresence can truly hurt the aviation industry and redefine how businesses and consumers communicate with each other.

1 comment:

Vaibhav said...

it would probably let the Big Airlines think of reducing the Business class to a mere 8 seats from 32 :) just a flash thought