Visionary thinking

As packet-based infrastructures are deployed increasingly in corporate enterprises, the return on investment (RoI) argument for running data, voice and video over one network is becoming more apparent. Apart from reduced capital expenditures and network management costs, converged networks enable organizations to implement a richer set of multimedia applications in an easier fashion than supported before by disparate, dedicated networks for data, voice and video.

However, not all three legs of the convergence application triumvirate appear to be on equal footing today. While voice/data convergence has been quick out of the starting gate, video over IP has been lagging behind. Traditionally, video networking technology has been a hard sell in the enterprise – dedicated boardroom-style systems were expensive, and often enterprises had to choose between paying for costly leased lines to support video services or settling for the poor quality offered by many service providers’ networks.

That’s no longer the case, according to video networking experts.

“Today you can get IP TV video quality that is as good as or better than what you see on television,” said Brantz Myers, national solutions manager at Cisco Canada in Toronto. Cisco’s videoconferencing and IP TV solutions fall under the larger umbrella of the company’s Architecture for Voice, Video and Integrated Data (AVVID) framework.

“The build-out of high-speed networks and also the quality of service of those networks has led to a very acceptable videoconference or video stream signal,” Myers said.

In particular, network latency and jitter have been improved tremendously in the new networks deployed by Canadian and global service providers, Myers said. “So now you can easily build a very good network in Canada, at a very good price, which yields to a very good RoI.”


The current economic climate and travel concerns as a result of the terrorist attacks of Sept. 11 are helping to drive demand for video networking systems, according to Stacy Saxon, director of product marketing for Polycom’s video product division. Milpitas, Calif.-based Polycom is an end-to-end video and voice communications vendor, offering end-point systems, video infrastructure products such as bridges and gateways, and video management and call-processing systems.

When the economic downturn began more than a year ago, companies started taking a hard look at how they could introduce cost savings into their organizations, without compromising productivity or relationships with internal and external partners, Saxon said.

“From an economic standpoint, they were looking at alternatives to the hard costs as well as the soft costs of travel, and how they could increase the interaction between a globally dispersed workforce or vendors and customers,” Saxon said. “We did see a significant increase in interest, and it peaked after the events of Sept. 11. What happened then was that triggered a lot of companies to start looking at video again as an alternative (to travel).

“However, video will not eliminate travel; it will never eliminate face-to-face communications,” Saxon added. “It will enhance face-to-face communications, and enhance productivity for people who can’t be face to face all the time.”

According to Gartner Inc., IP videoconferencing may soon jump ahead of IP telephony in terms of number of desktop seats that support the two technologies. Recent research from Gartner indicates 80 per cent of all Global 2000 enterprises will be supporting live video and video on demand on corporate desktops by 2006. Gartner’s research also shows that within the same timeframe 70 per cent of the Global 2000 will deploy video over IP to the desktop before deploying voice over IP on desktops.

The main reason for this is the risk/reward ratio for implementing video over IP is more favourable than it is for voice over IP, said Lawrence Orans, senior analyst at Gartner in Stamford, Conn. Since video traffic is not as mission-critical as voice traffic, there is less risk associated with running video over an IP backbone than running voice over the same infrastructure.

“To put an IP telephony system into a large organization is a highly risky endeavour, especially if you have a traditional digital PBX that works fine,” Orans said. “When you start talking about doing video to the desktop, that’s low risk because the expectations are very low at this point, and it’s high reward because now you can use new applications that weren’t possible before.”


Customers are looking to deploy IP-based video networking solutions primarily for corporate communications and online training or e-learning, Orans said. A key application supported by IP multicasting is the ability for senior management to communicate corporate information to its employees in a one-to-many Web casting type of scenario, eliminating the need for off-site employee update meetings, he added.

Videoconferencing has never really lived up to its potential because many business meetings and negotiations need to be done in person, Orans said. “Videoconferencing takes the human element, the high-touch dimension, out of meetings. The reason why Web casting and streaming media is so effective for large organizations is because if you go to an off-site meeting, you’re with a thousand of your colleagues and you see the CEO on stage, and that’s also a relatively impersonal type of event.”

Cisco Canada’s Myers said the one-way broadcast capabilities of IP TV technology make it suitable for broadcasting real-time video or video-on-demand traffic to internal employees and external customers or shareholders. Recent Security Exchange Commission (SEC) regulation changes in the United States now make it mandatory for publicly traded companies to disclose quarterly financial news to shareholders at the same time as the financial analyst community, Myers explained. Many Cisco customers are now looking at using IP TV for quarterly financial updates or other significant corporate news events, he said, adding that Canadian companies trading on U.S. exchanges also need to comply with the new SEC regulations.

This particular use of video streaming appears to be a niche application at this point, according to Gartner’s Orans. Quarterly financial analyst briefings are usually conducted via teleconferencing, and that is still an adequate method of distributing financial information in a timely manner, he said. However, he added that he thinks video will be used more in this area in the future, because shareholders will want to see the body language of the executives heading the companies in which they have stock holdings.

David Sokolic, vice-president of marketing for the networking business unit of RADVISION Inc. in Mahwah, N.J., said there are a number of vertical applications that can take advantage of IP videoconferencing technology. Niche applications include online training, distance learning and telemedicine. RADVISION develops and markets hardware and software technologies for IP telephony and multimedia conferencing.

According to Sokolic, however, general-purpose conferencing is the primary use for IP-based video networking technology today. RADVISION’s director of corporate communications, Sandra Fathi, added many universities are using videoconferencing, not necessarily for distance learning, but for workgroup collaboration and research – areas that go beyond the classroom.


The price of videoconferencing has come down drastically over the last few years because of the cost advantage of running multimedia traffic over a converged network, said Cisco Canada’s Myers. Video just becomes another application on an IP infrastructure, he explained.

“You end up sharing the cost of the data network across multiple departments and applications,” Myers said. “That means people who would have looked at spending perhaps millions of dollars to build a dedicated network to support video a couple of years ago, today are looking at spending tens of thousands to hundreds of thousands of dollars.”

For example, a medium-sized enterprise could deploy a Cisco videoconferencing gatekeeper and multipoint control unit for less than $90,000, Myers said.

A basic RADVISION gateway starts from between US$15,000 to US$20,000, with multipoint conferencing units beginning at around US$20,000, RADVISION’s Fathi said. Sokolic added a large organization wanting to deploy hundreds of video-enabled end points at multiple locations might spend from US$500,000 up to US$1 million.

Apart from these infrastructure equipment costs, the end-point units themselves can add significantly to the overall capital expenditure necessary to run IP-based video applications. Conference room-based end points range from about US$4,000 to US$30,000, Sokolic said.

“To get to a price point where this is massively deployable, we need to get the cost in the area of US$200 to US$300 per seat for the basic equipment,” Sokolic said. “The obvious solution is to have PC-based end points, and we’re trying to work with Microsoft to make that happen.”

RADVISION has been conducting a trial with Microsoft to test the interoperability between the video capabilities built into Microsoft’s new Windows XP operating system and RADVISION’s multipoint control units. “It will probably take the better part of the year before all the pieces are in place,” Sokolic said.


The greatest market potential for videoconferencing systems lies within the smaller Fortune 5000 company, according to Christine Perey, an independent videoconferencing analyst and president of Perey Research and Consulting in Placerville, Calif. She said about 99 per cent of all Fortune 100 companies and 80 per cent of the Fortune 1000 have already implemented videoconferencing. However, taking into account all of the global corporate meeting rooms that could potentially be equipped with videoconferencing equipment, the penetration rate for videoconferencing systems is between one per cent and two per cent, Perey said.

She added large companies have adopted videoconferencing faster because they have had a mandate to support global collaboration among employees and partners for a longer period of time than smaller companies.

“The real impetus and motivation for people who are buying now, and in the last six months, is because they feel the pressure of a global marketplace,” Perey said. “And either they have an economic incentive because the cost of travel is high or some security incentives that are causing them to change the way they do business.”

Perey said she doesn’t feel the traditional high cost of videoconferencing equipment has had much negative impact on the deployment of video systems, at least within large organizations. “I think it has much more to do with people’s resistance to change, and resistance to behavioural adjustments. They want to do business as usual,” Perey said.

“The real compelling motivation for people to change their behaviour is going to be to accelerate decision making in small groups, and more and more that will be done at the desktop level,” she added.

Linda Stuart is a Toronto-based freelance writer who specializes in networking, telecommunications and e-business issues. She can be reached via e-mail at