November 2001

 
The Search For Normalcy

BY RICH TEHRANI

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Anyone within reach of a television or a Web connection has seen and heard about the incredible way in which the people of our nation have come together in the wake of the attacks. Volunteers came out in such force that people were being turned away for lack of anything to do. The spirit of volunteerism was evident in the communications industry as well. The video conferencing segment of our industry deserves some measure of thanks for their quick response to the needs of the many businesses that found themselves in need of their services. Andover, MA-based PictureTel was among the leading companies driving an initiative called Video Relief. Together with many of their partners, competitors, and resellers, PictureTel formed Video Relief, a worldwide video conferencing network to help the victims, families, and relief agencies affected by the attacks of September 11. The vendors offered up their video conferencing facilities to arrange -- free of charge -- video conferences anywhere in the world.

I had the opportunity to speak with Lew Jaffe, PictureTel's president and chief operating officer, about the company's Video Relief initiative.

RT: Please describe the response to the Video Relief initiative.
LJ: The response from PictureTel's partners, customers, and competitors has been overwhelming. Video Relief participants have opened their doors to more than 300 video conferencing sites in 40 countries around the world. We have also made units available to FEMA (Federal Emergency Management Agency) and other humanitarian relief organizations in an effort to bolster existing deployments or to create an alternative means of communication during this time of crisis.

RT: What about your competitors? Are they joining PictureTel in this effort?
LJ: Polycom has joined with PictureTel in the Video Relief program by opening its own sites around the country to those in need and encouraging its own customers and partners to do the same. Along with PictureTel, Polycom is providing information on Video Relief on its Web site. PictureTel and Polycom resellers have likewise joined the effort.

RT: How would you measure the success of the initiative?
LJ: We are measuring success in terms of the comfort we can offer -- and the program has been extremely successful. I am proud of our industry.

RT: Do you have any available numbers that reflect to what extent victims have taken advantage of the services being provided by PictureTel?
LJ: Due to the nature of the program there are no numbers available. Individuals or companies interested in holding a video conference go to our Web site to find the location nearest to them and a site closest to those who they would like to call. They contact the site directly to arrange a time and date to hold the video conference. We knew that a decentralized approach would be fastest and easiest for those in need of two sites.

RT: Would you like to add any additional thoughts or comments?
LJ: Our thoughts and prayers are with those who have suffered and with those on the front lines. For more information on Video Relief, please visit our Web site or call 877-532-1841.

FOLLOWING THE TREND
The attacks of September 11 will certainly affect business travel for some time yet. Many companies are taking a bit of a break as far as sending their employees on trips, but it should be noted that business travel was on the decline even before the terrorists carried out their evil deeds. On September 6, PictureTel announced the results of a survey conducted at their user group conference, which was held in late August.

The survey noted a marked jump in the number of video conferences over the preceding 12 months -- with 92 percent of respondents reporting an increase. More than half of respondents noted that their organizations are placing restrictions on business travel and mandating video conferencing as an alternative. While the majority of users reported a reliance on ISDN, nearly half of the group report having some systems connected to IP networks for video conferencing.

And, in terms of return on investment, 75 percent of respondents report that their video conferencing systems have paid for themselves and have started saving their organization hard dollars in 12 months or less.

Video conferencing stocks surged when trading in New York finally resumed on September 17. Shares in companies like WebEx, Polycom, and ACT Teleconferencing skyrocketed, gaining anywhere from 30 to 48 percent in just a day's trading. But as the PictureTel user group survey showed, the video conferencing market was already trending upwards due to economic conditions, travel restrictions, and advances in video conferencing technology.

Another recent report, one announced on September 24, sees a short-term market turnaround to be followed by steady growth, driven by price and performance improvements, IP networks, and increased interest in alternatives to business travel.

The report, from Brookline, MA-based Wainhouse Research is entitled Conferencing Markets and Strategies Volume 2: Conferencing Clients: Video & Web Clients for Group and Personal Conferencing. Wainhouse Research sees the overall market declining in the first half of 2001, but predicts a robust last quarter, driven in no small part by the terrorist actions of September 11, and by renewed interest in avoiding business travel.

According to Wainhouse managing partner Andrew W. Davis, "Even with a strong Q4, however, we believe that growth from 2000 to 2001 will be negative for the industry as a whole. But 2002 should be strong. We think many factors have finally combined -- price, performance, availability of IP bandwidth, PC data integration, remote systems management -- so that people exposed to the current crop of conferencing solutions will stick with the technology over the long term."

By the end of the forecast period, Wainhouse Research believes as much as 80 percent of the conferencing industry will have moved to IP networks for their video conferencing and visual collaboration applications.

And so, in our quest to return to normalcy, we must once again pick up where we left off. It was so inspiring to see how people came together in the days and weeks following that dreadful Tuesday, September 11. Rather than falling apart and collapsing in our own self-pity, our nation -- the people and businesses that make America truly great -- rose to the challenge.

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