senior analyst, Wainhouse Research LLC

While new and improved products have been introduced in the visual collaboration market over the past few years, their adoption has been very limited.No doubt Halo offers HP’s expertise in imaging, but such systems are expensive and require high bandwidth. Not many companies can afford to buy them.E. Brent Kelly>Text

The lukewarm response, analysts say, has to do with the high cost of these products and their inability to meet user expectations.

For the past five years, vendors of visual collaboration tools have not reported profits from this product line, according to E. Brent Kelly, senior analyst at Duxbury, Mass.-based market research firm Wainhouse Research LLC.

In some cases, Kelly said, in addition to steep costs, these systems are also resource intensive.

Kelly cited the example of technology giant Hewlett-Packard Corp.’s person-to-person solution Halo Collaboration Studio. “No doubt Halo offers HP’s expertise in imaging, but such systems are expensive and require high bandwidth. Not many companies can afford to buy them.” Halo was launched by HP in Dec. 2005.

Of course, it may never have been the intention of certain visual collaboration product vendors such as HP to target the wider market. In fact, feature-rich offerings such as Halo appear to specifically target the upper reaches of the market.

The breadth and complexity of the Halo Studio makes this clear. The 17 by 21 ft. studio comes with three 50 inch plasma televisions facing the conference table. Participants use an on-screen user interface to interact with one another. “You need to dial 10 keys in a telephone. In Halo Studio you use four clicks of the mouse to connect to the other party,” said Ray Suita, marketing manager, HP Corp.

An overhead camera, which comes with a zoom lens, captures objects on the table. People sitting across continents can operate the camera with their mouse attached to the conference table.

These features come at a very high price. The cost of setting up the Halo Studio is a steep US$550,000. Added to this is the monthly service fee of US$18,000.

Despite the premium price tag on Halo, HP says the pay back would be well worth the cost. Suita said companies using Halo will be able to cut back on travel budget. “No doubt, initially this expensive studio will be used for inter-company meetings. It will save executives from travel burn out,” said Kelly.

HP has installed 13 Halo Studios in its offices world-wide. Companies that participated in the trial run included animation filmmaker DreamWorks Animation SKG and consumer product manufacturer PepsiCo.

Dreamworks Animation used Halo Studio for its artists when they were making the film Shrek 2. The artists were sitting in two California offices of Glendale and Redwood city, and shared their sketches with each other sitting in their Halo studios.

“We are at the final negotiation stage for selling the Halo studio in Canada,” said Suita.

While HP’s Halo is clearly targeted at larger enterprises, other recently launched products – cater to the wider market. Among these are Tandberg Management Suite’s (TMS) integration with messaging products from IBM Corp. Based in New York and Norway, Tandberg is a provider of visual communication products and services.

In January, Tandberg Canada added video to IBM messaging products such as Lotus Sametime and Lotus Notes. This was made possible using the TMS software. In 2005, TMS was enabled to interface with Lotus Domino servers. “The next step was to upgrade instant messaging to video using TMS,” said Peter Nutley, director of product marketing at Tandberg Canada.

Tandberg Canada is predicting a boom in video conferencing market in future. “We believe in a few years everyone will have a video number and will be using it. Our emphasis is on using existing investments and adding video features to them” said Nutley.

Those offering cheaper options are not better off.

Kelly is not optimistic about the market boom. He said although buyers show a lot of interest in desktop collaboration, it does not always translate into sales.

Enterprises have a number of grievances against such products. Kelly said companies usually don’t have the bandwidth capacity to set-up 10,000 video units for employees. They are also dissatisfied with the quality of images. “People are used to watching television sized images, and they don’t like seeing the smaller sized images on PCs. Others find this technology intrusive. They don’t feel comfortable attaching videos to their computers.” .

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