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Industry Imperatives
November 2001

If You Can't Join 'Em, Meet 'Em!
A New Look at the Video Conferencing Industry


In economic down times, companies look to technology more than ever to stay ahead. And as businesses tighten their belts, travel budgets are often among the first items sacrificed. Recently, people have turned to collaborative technologies to conduct business at a fraction of the cost and time required to fly somewhere, rent a car, stay at a hotel, and eat out. Particularly for video conferencing, advances in technology are making alternatives to face-to-face meeting just as effective as being in the same place at the same time.

Video conferencing today essentially is intended to raise productivity and save money by reducing travel time, bringing down costs, and making it easier for people in remote locations to work together. Advances in the compression facilities have reduced transmission costs by allowing more information to be sent over lower capacity digital networks. Video conferencing also has been boosted by the availability of switched digital telephone services and the use of Internet protocol (IP) networks. The evolution of telecommunications networks to IP will mean more effective use of bandwidth and significant cost savings over the long term. Video and audio quality are also improving, giving users the chance to see and hear their colleagues as if they were in the room with them. Versatility is another virtue of this collaborative technology, as the healthcare industry and our judicial system have reaped dramatic benefits.

Unfortunately, just as the economy was seeing some early signs of a recovery amid the corporate budget cuts, the events from September 11 in New York, Virginia, and Pennsylvania exacerbated the country's financial vulnerability. Consumers simply have less desire to spend or incur debt as freely as before and don't want to take new risks. Businesses will surely do what they can to soften the blow as a result of the disaster. At the same time, it may have created an added window of opportunity for people to take a look at how technologies such as video conferencing can fit in their business plan.

Today, major players -- PictureTel, Intel, NEC America, Lucent, Nortel, and PolyCom, to name a few -- are developing new and improved products to allow for people in different locations to discuss virtually anything -- from implementing a new marketing plan, to conducting criminal proceedings, to discussing advancements in treatments by healthcare officials. The possibilities are virtually endless.

If your business is reducing employee travel to maintain existing accounts, or if you are still interested in cultivating new opportunities, video conferencing could prove to be an attractive option.

The market for video conferencing equipment and services is expected to grow exponentially, thanks to the recent breakthroughs in technology mentioned above, in addition to the fact that companies are operating on more fiscally responsible terms, including reduced travel. The obvious answer for many facing tougher economic times is the deployment of video conferencing units -- a technology that has come a long way since the first public video conference back in 1930 between AT&T headquarters and their Bell Laboratory in New York City, and also the 1964 invention of the Picturephone.

From the perspective of corporate communications, video conferencing can certainly improve the effectiveness of decentralized executives by enabling them to hold strategic planning meetings without needing to leave their desks. Facilitating meeting attendance is probably the most traditional, simple, and widely implemented use of video conferencing. Recent advancements into IP-based video conferencing, including equipment to make effective use of bandwidth (thereby lowering costs) and improved video and audio quality, have made this technology more attractive to the enterprise, no matter how good or bad the economy looks.

In the past, you had to sit in a conference room or your office to participate in a video conference. Now technology is being developed so that you can carry the meeting with you. As enhanced wireless services are getting prepared to enter the North American market, companies like PacketVideo are working on software that will deliver streaming video and audio to mobile devices including phones and personal digital assistants (PDAs). Whether you're at an offsite office or on the street, it's only a matter of time before you will be able to tune into a video conference from any place in the world.

Video has become a much more affordable option for most of the healthcare industry, and it is quite versatile in this field. Teleradiology, telepathology, and teledermatology are niche applications of medical video conferencing in which doctors and nurses can work simultaneously in multiple locations. As a result, video conferencing in telemedicine is widely regarded as one of the fastest-growing areas of conferencing, even without an economic downturn. Telemedicine, as many people are calling it, can allow for specialty consultations for both physicians and patients in remote sites using a combination of computer databases and real-time video networks. With stepped-up cost controls for hospitals, this technology is allowing doctors to more easily review a patient's medical records, x-rays, and other information without travel and waiting for records to be received by mail. Resources are also readily shared among smaller and rural hospitals. And medical personnel are now taking continuing education courses without leaving home.

In the past, most hospitals have had to rely on phone calls and e-mails to relay patient information to specialists. This was the case for Landstuhl Regional Medical Center (LRMC) near Ramstein Air Base in Germany. LRMC is a military facility that provides primary care, hospitalization, and treatment for more than 60,000 personnel onsite and specialized care for more than 250,000 personnel as a referral center around Europe. However, thanks to a supply of equipment from PictureTel Corporation, the medical staff is now able to move information more effectively without moving patients and doctors.

LRMC has two special designed multimedia rooms with ISDN and IP capabilities that they use for telemedicine consultations, distance learning programs, medical awareness, and command and control video conferences. The biggest benefits to their investment in video conferencing technology are things that you'll see regularly from users -- money saved and time not wasted getting to and from far-reaching locations.

PictureTel has also been involved in bringing together patients and specialists who are spread out over a large area in Michigan's Upper Peninsula. Health care organizations that make up the Upper Peninsula Health Care Network (UPHCN) have found that joint purchasing and information sharing through video conferencing is enabling them to do a more effective job serving more than 300,000 citizens who live in a part of the country where population density averages 19 people per square mile. The greatest benefit of video conferencing in this example is realized in the quality of patient services -- today, patients are getting the care they need without extensive travel. Many small clinics in the Upper Peninsula use some of this cost-effective, low bandwidth technology to communicate with the bigger hospitals that are far away and have more advanced technology -- a several hour drive in many cases.

Video conferencing may also work its way to the operating table on a regular basis. For example, a gall bladder surgery was recently conducted robotically on a woman in France while the surgeon performed the operation from New York City. While the doctor viewed the surgical field on a television monitor, remote controls were manipulated by hand-over-high-speed telecommunications. The key to the success of this implementation of technology was that the time lag between the surgeon's hand motions on the remote controls and the robotics across the Atlantic were barely more than one-tenth of a second -- essentially real-time.

Furthermore, telemedicine is a service now visible in jail-hospital relationships. Security doesn't have to be compromised now, as on-site physicians at prisons can consult with remote specialists on operative and post-operative treatments. The only movement necessary for an inmate today is from his cell to a diagnostic or surgical center onsite.

If you don't want to think about how much of your tax dollars are spent to care for prisoners during their jail sentences, then consider what companies such as Teleco, Inc., are doing by teaming up with local governments in an effort to cut costs. In Greenville County, SC, roughly $1.4 million was spent in the past year transporting prisoners to and from hearings, meetings with psychologists, and hospitals for medical care. Today, the county government has videoconferencing equipment connecting its 13th Circuit courtrooms to the Greenville County Detention Center for bond hearings. Without having to leave the facility, inmates are taken to a secure area in the jail where they are able to see the judge, hear what is said, and take part in the proceedings. "Using video conferencing for criminal proceedings will reduce the cost of transporting prisoners, reduce security risks by eliminating excess transportation of prisoners in jail, and reduce time wasted while waiting for prisoners to be brought from the Detention Center," says 13th Circuit Solicitor Bob Ariail. "It will certainly be cost-effective for the citizens of Greenville County and will help us handle cases quicker, which should benefit victims, witnesses, and those who are in jail."

Norm MacDonald, vice president of marketing for Teleco, says future applications of video conferencing can move into other non-jury proceedings, such as motions, parole and sentence violations, guilty pleas, juvenile detention, and psychological care for inmates. In South Carolina, prisoners with mental problems are entitled to seek treatment on a monthly basis, and with jail-to-psychologist video conferencing, valuable time and money are saved while maintaining quality of care.

MacDonald adds that while the systems currently used by Greenville County are ISDN-based for the purpose of securing remote depositions and testimony from expert witnesses, many of the systems Teleco has sold over the past few years are IP-based, so the flexibility in the equipment is readily available. And with savings generated like the example in Greenville County -- use of a video conferencing system could cost a tenth as much as the amount that was spent on inmate transportation -- most cities with a jail can justify the investment of video conferencing systems.

The TIA 2001 MultiMedia Telecommunications Market Review and Forecast predicts that the market for video conferencing equipment will rise at a compound annual growth rate of 21 percent, reaching $3.3 billion by 2004. Furthermore, the report predicts that in 2002, more than $12 billion will be invested in video conferencing equipment and services for corporate communications. Today, despite the sagging economy and the events of September 11th, the video conferencing equipment market is still on track to match and potentially exceed those early predications. And telemedicine and telejustice are just a few of the markets expected to yield robust financial opportunities for suppliers of video conferencing solutions. As the economy (and our industry) regain their respective footing and Americans continue to search for alternative methods of conducting business, the video conferencing market as a whole will continue to enjoy increased profitability. 

Mary Bradshaw is the vice president of global enterprise market development for the Telecommunications Industry Association (TIA).

TIA is a leading trade association serving the communications and information technology industry. Through its worldwide activities, the association facilitates business development opportunities and a competitive market environment. The association provides a market-focused forum for its more than 1,100 member companies that manufacture or supply the products and services used in global communications.

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