The Internet has provided a showcase for streaming video and voice over IP (VoIP) as value-added
applications. Now, the ever-increasing bandwidth available to Internet
applications has set the stage for two-way videoconferencing. Carriers and enterprises alike
are eagerly watching as two-way video emerges from the shadows of ISDN;
taking advantage of the reach and ubiquity of Internet protocol (IP) and the emerging broadband Internet.
Voice, video, and data have long been expected to converge over IP-based
networks. It has, however, always been presumed that IP networks would
need far more intelligence than is currently built-in to handle multimedia applications and
associated Quality of Service (QoS) demands. But expectations and reality
on this matter have diverged, and two-way video is the beneficiary as
technology lines up in its favor. Bandwidth in the Internet's core doubles
every six to nine months, while the cost of high-speed Internet access
plummets. New video technologies based on the International
Telecommunication Union (ITU)'s H.323 standard are slicing the cost of
end-point equipment. QoS and latency issues remain -- the Internet
is still too slow for much more than jerky, postage stamp-sized
videoconferencing -- but these quality issues can be fixed by dedicating
more bandwidth. This can be achieved on a private corporate backbone, or by
using a managed service on the Internet via new-breed
Application Service Providers (ASPs) offering video portals. ASPs
can match the quality of traditional ISDN at about one-third of the
overall costs -- and with more benefits.
The ASP delivery model gives business users an efficient way to stage
videoconferences from the desktop. Set up is as easy as making phone calls,
or dropping participants on the fly is done with a mouse click. This model
service providers a profitable differentiator which could well be the
Internet's next business killer app.
For virtually any business, high-quality, real-time, two-way video in
the deregulated IP world is viable and affordable through ASPs. Bandwidth
is plentiful (DSL already reaches more than 50 million homes and
businesses) and high-speed synchronous options such as SDSL and VDSL are
gaining popularity, with wireless broadband at speeds up to 155 Mbps in the
last mile. Two-way video will flourish in the business marketplace when
the price is affordable, the networking headaches are eliminated, and the
quality of circuit-switched ISDN is matched.
SIMPLIFYING WHAT IS COMPLEX
Complexity has made enterprises reluctant to embrace IP video networks.
Complexity is the same reason VoIP deployment initially lagged. Mixing IP
video packets with data adds quality risks and networking complexity that IT
managers hesitate to embrace (unlike circuit-switched video networks,
using ISDN or ATM, which are essentially separate from data). Network
security when deploying H.323 video on an enterprise network is a big
concern, as it generally requires router upgrades or punching a hole in the
firewall. Two-way IP video, therefore, is likely to follow the VoIP path
of involving outsourced services from service providers. Service
providers make ideal partners because they are increasingly strengthening
their IP networks and are prepared to address and resolve the challenges
Note the similar growth paths of voice and videoconferencing over IP. VoIP saw limited success when
enterprises had to buy equipment and deploy it on their own networks. Despite
falling bandwidth costs, short-term savings of toll-bypass remained marginal
when the costs of equipment, resources, and added management were factored
in. And forget about replacing the familiar PBX with a software-based PBX
-- few telecom managers, for example, would risk the liability of an injured
employee that emergency services could not find for lack of a
Yet VoIP is now successfully enabling new applications and making existing
ones easier and less expensive. In fact, the quiet emergence of VoIP either as an
enabling technology to enhance legacy services or in new
applications is helping make VoIP gateways an expected part of the
broadband infrastructure. Web fax and Web phone
applications tied to directory services or buddy lists and integrated into
online portals, for example, are gaining momentum. Meanwhile, companies
are starting to enable their Web sites with VoIP functionality, linking call centers to
Critical to VoIP's early success was that investment decisions and
network reconfiguration could be avoided by tapping into new-breed
providers anxious to differentiate themselves. While traditional Internet
Service Providers (ISPs) continue to focus on selling high-speed Internet
access and gaining market share; ASPs are developing new solutions around
core IP technologies so they may offer hosted services.
Of course, timing is everything. Service providers know that simply
selling bandwidth won't cut it in the long run. Value-added services will
help differentiate themselves from one another while preserving margins.
Their enterprise customers, meanwhile, are seeing the value of outsourcing
ancillary and mission-critical applications alike.
ADDING VIDEO TO THE EQUATION
Thanks to Web browsers, new video technologies, and the broadband Internet,
videoconferencing has made the evolutionary leap to the ASP model. The
indicator for mass adaptability is the migration from enterprises buying, installing, and maintaining complex systems
themselves to the
"pay as you go" alternative managed by service providers.
The value potential of two-way video communications is self-evident. It
can reduce travel costs, foster better business relationships, and facilitate
collaboration and distance learning. Travel is the third largest
expense in most corporations, after payroll and information services
(according to the National Business Travel
Association), with the average travel cost per business traveler a
staggering $9,000 per year. The real cost, however, is higher when you
factor in lost productivity and mismanaged projects because key executives
are on the road and unable to stay on top of priorities. Videoconferencing
can alleviate some of those expenses and productivity losses.
As a result of ISDN-based video services having QoS issues, widespread
acceptance of video as a standard business communication tool has been
stifled. But equipment and services for videoconferencing have still become
a multi-billion dollar industry. Some $6 billion in revenue is generated today by
service providers alone, according to PEREY
Research & Consulting, ranging from conference-bridging
services to various associated ISDN costs. With broadband Internet now
emerging, two-way video is ripe for the ASP delivery model. At the same
time, service providers are coming to appreciate the enormous potential
for videoconferencing to generate premium revenue streams.
CARRIERS: BE READY WITH BANDWIDTH
The recent merger of AOL and Time Warner shows that
broadcast-quality (MPEG2) streaming video inevitably will be transported
over the broadband Internet. Service providers have been scrambling since
the AOL/Time Warner announcement to ally with content providers to ensure
they'll be in the game. Two-way video is the obvious progression from
streaming audio and video, and could become as big an opportunity as
broadcast-quality, one-way video.
If IP-based, two-way video service is readily available, new-age
carriers like competitive local exchange carriers (CLECs) and others will
be able to introduce profitable offerings priced to compete with existing ISDN
videoconference bridging services. They can then attract legacy ISDN users
to IP videoconferencing and related streaming applications. The lower cost
model and improved usability of an IP-based video service should stimulate
widespread use of two-way video, from meeting rooms to the desktop.
The price point will erode as two-way video at 384 Kbps becomes ubiquitous and more service providers
offer this type of service. But two-way video is destined for MPEG-2 and MPEG-4, just as low
bit rate, one-way video is
"super sizing" to premium, broadcast-quality video. Each
successive increase in quality gives service providers the chance to sell
wider pipes. Market share will be critical to success, and savvy
service providers are already snaring first-mover advantage by partnering with two-way video ASPs
and one-way video content providers.
These changes mean businesses will be able to easily conduct everything
-- from phone calls to critical data communications, to call center
management to video chats -- over the broadband Internet. Two-way video
will become the centerpiece. ISDN and ATM technology are not standing
still -- prices are coming down and the technology is getting better,
raising their attractiveness as transport mechanisms. But video
connectivity to the desktops will occur only over IP networks -- ISDN
plumbing to individual desktops is not feasible. As a result, ISDN limits
the reach of videoconferencing to conference rooms.
NEW REVENUE MODELS FOR SERVICE PROVIDERS
Companies may be increasingly interested in buying bundled services, similar to
the mobile phone model,
which include video-enabled PCs or video-enabling software with a set
number of videoconferencing minutes per month. With this model, service
providers can offer new value-added services and generate a new, multi-million
dollar revenue stream.
A uniform interface on video portals will let end users make calls
directly from their desktops over a broadband IP network. Self-service and
browser-based, they will let subscribers designate who will be on calls
and who won't -- all on the fly. Just click on names in a directory service
to connect with your selected participants: Select three names and those three
people would be set up; pick a dozen coworkers and those 12 would be dialed.
Under this new business model, gateway and bridging resources will be
provisioned automatically, without requiring administration by the service
provider -- unlike today's videoconference bridging services. And the user
won't see any of the complexity that is (unfortunately) visible today.
Through these same video portals, users will also have access to an array of streaming video
applications, some of which will be integrated with the two-way video
applications. Stored video, such as a recorded employee meeting or third-party content, can be
replayed at any time. Live video streams, such as a CNN
news feed or broadcasts of live events, can also be received.
Outsourcing service will break down traditional acceptance barriers to
the delivery of IP-based, two-way videoconferencing over broadband. It
will invite millions of small and medium-sized businesses to share in
videoconferencing, far beyond the elite tens of thousands who could afford
it in the past. In fact, business-quality, video-over-IP is here. And it can
finally become the everyday communications tool
we've been waiting for.
Mark Cowtan is the director of marketing for FVC.COM.
FVC.COM is broadband video networking provider, offering services and
systems to enable service providers to deliver two-way video to their
customers. FVC.COM's Click to Meet is the industry's first video services
solution for high quality, two-way video calls and conferences over the
broadband Internet using a Web-based video portal.