Cisco Steps Into Telepresence With New HD Videoconferencing Line

Virtual reality isn't just for gamers anymore.

Cisco Systems this week is launching its much-touted telepresence offering, a high-definition videoconferencing line that some channel partners said will change the way customers communicate, collaborate and do business.

More than just high-definition, the new Cisco offering crosses the line into telepresence, a videoconferencing paradigm that combines top-quality video and audio, large plasma screens, lighting and even office furniture to create a life-like videoconference that's nearly as good as meeting in person.

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Slide Show: Cisco CEO John Chambers demonstratesthe Cisco TelePresence system for CRN

"It's the first time we've seen virtual reality in a normal business application," said Matt Horner, vice president of professional services at World Wide Technology, St. Louis, Mo., one of a handful of Cisco channel partners currently trained and authorized to deploy the products.

The hope is that the telepresence technology is essentially transparent, overcoming the distractions of choppy video and sound quality associated with traditional videoconferencing to create a realistic experience.

"[Traditional] videoconferencing just never delivered an experience that was anything close to telepresence. It's not integrated into the network, and it provides a poor audiovisual experience," said Jon Jensen, CEO of Nexus IS, a Valencia, Calif.-based Cisco partner. "It just doesn't deliver the human experience customers have been looking for."

For telepresence users, the image on the screen across from them appears life-size, clear enough to pick up the nuances of facial expressions and body language. The surround-sound audio comes from the direction of the person speaking.

Cisco isn't the only company that has seen the potential of such technology, which will cut down on the time and expense of travel, while improving productivity for customers. The vendor is, however, among the biggest names to enter the space and arguably the best positioned to provide a complete offering, with tie-ins to its IP network infrastructure, VoIP and unified communications portfolios.

Hewlett-Packard launched its telepresence line, Halo Collaboration Studio, in December 2005, in partnership with film company DreamWorks Animation SKG.

NEXT: Telepresence Moves Downstream

Videoconferencing leader Polycom, Pleasanton, Calif., unveiled its RPX RealPresence Experience room system in May and this week is also launching new high-definition conferencing products.

No. 2 videoconferencing player Tandberg, New York, is expected to launch a telepresence line early next year.

Teliris, also in New York, earlier this month launched an upgraded version of its telepresence offering.

And Austin, Texas-based start-up LifeSize Communications, one of the first companies to market high-definition videoconferencing products, said its channel partners already are building telepresence rooms with its offerings.

While the new breed of high-end telepresence solutions may be far out of reach for most customers, with prices nearing $1 million for a two-room rollout depending on the vendor, the technology is poised to move downstream over time to a bevy of medical, financial, manufacturing, government, retail and commercial customers.

Competition aside, other vendors and their channel partners said Cisco's splashy entrance into the telepresence market with its new Cisco TelePresence Meeting line—a push scheduled to begin Monday with a launch event in New York—will create a boon for all flavors of IP videoconferencing, be it telepresence, high-definition or even traditional.

"It's like the proverbial 800-pound gorilla that validates the space," said Todd Luttinger, president of Videre Conferencing. The Quincy, Mass.-based company expects up to 40 percent of its $10 million business this year to come from high-definition videoconferencing solutions, primarily from LifeSize, he said. It's a profitable business that typically provides 40 percent margins, he said.

For Cisco, however, the pitch is about more than just technology, it's about the broader communications experience, which, of course, is built on top of its own networking platform. "It's moving the Cisco conversation from the glass room [the IT department] to the board room," said Edison Peres, vice president and chief go-to-market officer for worldwide channels at Cisco, San Jose, Calif. "We're beyond convergence. This is the next level."

As Cisco makes the move toward providing "the human network," its latest marketing catchphrase to describe the collaboration and communication that it wants its technology to power, channel partners will need to move with it, Peres said. "Successful partners are the ones that will evolve with it," he said. "We're offering a level of communications that wasn't possible before, and the deployment of these [solutions] is global, where partners in the past have been very local. It means the utility of our partner ecosystem is going to be at an all-time high."

As part of its new partner enablement initiative, Cisco has pledged to incorporate solution providers earlier into product launch strategies so that the channel is trained and ready to deploy technology as soon as it becomes available.

NEXT: The Telepresence Channel Play

The TelePresence launch is among the first rollouts of the vendor's new fiscal year to fully embrace that strategy. The portfolio is designated by Cisco as an "emerging technology," a category of products that historically have not been offered immediately through partners. With this launch, however, Cisco has selected 24 channel partners to train and authorize for deployment of TelePresence solutions—including 11 in North America—in what Peres said is a controlled, deliberate distribution strategy.

A broader number of channel partners eventually will be added to the mix, he said. "I see over time that [the product line] will move to most of our partners who sell unified communications," he said.

Cisco also has tapped several channel partners for rollouts of TelePresence rooms for its own use. Thus far, 20 Cisco sites have been deployed, along with five customer field trials. Cisco intends to roll out 110 sites internally by August.

To be sure, the product line to start is focused on large enterprises and solution providers with the depth of skills to service them.

The Cisco TelePresence Meeting portfolio, which was in development for two years, initially includes two models: TelePresence 3000, a full-room solution for 12 participants that includes three 65-inch high-definition plasma screens and carries a $299,000 price tag; and the single-screen TelePresence 1000 for smaller meetings that comes in more modestly at $79,000. Both are scheduled for availability in December.

With the TelePresence 3000, solution providers will be deploying a "conference room in a box" that includes everything from the networking and videoconferencing pieces to lighting, audio and even the conference table itself. Partners will be performing network and room-readiness assessments to ensure that their deployments meet the stringent specifications required for a successful rollout, looking at pieces such as acoustics, ambient light and even the paint color on the walls, Peres said.

Cisco predicts that every $1 spent on the TelePresence technology will generate an additional $7 in product pullthrough as customers upgrade their network and bandwidth capacity to meet the heavy demands of high-definition videoconferencing. Several channel partners said early indications show that figure to be too high, though most said thus far they have targeted customers they know already have the prerequisite infrastructure and bandwidth requirements in place.

High cost and high bandwidth requirements are two of the challenges that could keep customers from buying into telepresence solutions, Cisco solution providers said. Cisco is certifying several service providers, including AT&T and Verizon, as carriers that can provide the quality of service required to support TelePresence deployments.

Cisco also has to contend with its competitors. HP, the biggest name in the market aside from Cisco, has been installing its Halo systems for nearly a year and counts companies such as Advanced Micro Devices and PepsiCo among its clients. Halo includes recently launched multipoint capabilities that enable multiple locations to join in a single conference call, a feature Cisco doesn't plan to add until the second half of this fiscal year. HP sells its room systems for $425,000, plus an additional $18,000 per month for managed network services.

For now, however, Halo is a direct play for HP, though the company plans to open the product line to the channel over the next year as the portfolio comes downstream, said Ken Crangle, general manager of the Halo division at HP, Palo Alto, Calif.

Some solution providers expressed doubt that products from Cisco or HP will find a strong following because they don't interoperate with systems from other vendors. "You have hundreds of thousands of systems out there, and [Cisco's product line] won't be able to talk to one of them," said Charlie Macli, senior vice president at IVCi, a videoconferencing solution provider in Hauppauge, N.Y.

Cisco partners argued that its TelePresence offering is so far superior, customers won't go back to legacy systems. "Once they experience what TelePresence gets them, they'll understand," said Gene Cowden, executive vice president of Presidio, Colmar, Pa. "It's like comparing traveling on a train vs. a jet plane. It's a great leap forward."