Deloitte picks Nortel for managed videoconferencing

Computerworld - Global consultancy Deloitte Touche Tohmatsu has chosen Nortel Networks Ltd. as its managed service provider of telepresence and videoconferencing capabilities in a three-year deal valued in the millions of dollars.

The deal, announced today, was signed last month, and many independent Deloitte member firms in 140 countries are likely to sign on to take advantage of the unified videoconferencing capability, said Rick Sullivan, national director for business services at Deloitte Canada.

For Nortel, the deal is recognition that the Brampton, Ontario-based network equipment provider has grown in its ability to support videoconferencing, said Mike Jude, an analyst at Nemertes Research Inc. in Chicago. However, Nortel uses a different model than rival Cisco Systems Inc. and provides equipment from well-known videoconferencing vendors Polycom Inc. and Tandberg instead of making and selling its own, he said.

Sullivan said Deloitte already had Tandberg and Polycom cameras, monitors and related gear with plenty of life left in them, and the firm wanted to continue to use that equipment with Nortel. But the primary reason why Nortel was picked was because it is one of just a few vendors that offer a managed videoconferencing services on a global basis, Sullivan said in a telephone interview.

Sullivan wouldn't reveal the other bidders, and he wouldn't comment on the terms of the deal, other than to say that Nortel was right in describing the contract as in the "multimillion-dollar range" for managed services and equipment.

Deloitte Canada, with 8,000 workers and 55 offices, has signed on to the global agreement with Nortel. Deloitte Canada previously had a "hit or miss" usage of videoconferencing, with some offices using it very little and finding it unreliable, Sullivan said. "We believe a managed service was the route to take," he said. That way, the firm will be able to use of Nortel's global infrastructure of multimedia network operations centers.

Under the agreement, Deloitte Canada may build three more high-end telepresence rooms, in addition to one in Toronto already used by board members. Such systems usually require built-in lighting and sound and multiple big-screen, high-definition monitors. "In a high-end telepresence room, people in the other office appear very close and the experience is as close as you can get without being there," Sullivan said. "After you are in a meeting for five minutes, you forget you are in a telepresence meeting."

Nortel will also be called upon to support more typical room-size systems with one large monitor, as well as desktop videoconferencing.

Deloitte believes videoconferencing can save on travel costs, but the primary savings come from reduced "wear and tear" on workers who travel and from improved productivity. "There's not a huge hard dollar savings if you talk about just cutting out travel costs for air fare and hotel," Sullivan noted, since videoconferencing on a global basis can be expensive. "However, if you count productivity savings and the cost of wear and tear on people, [videoconferencing savings] is a no-brainer."

Nortel said in a statement that a company that spends $23 million a year on travel can use telepresence and videoconferencing to recover 385,000 hours of lost productivity, reduce its carbon footprint by up to 4,200 tons and save up to $7 million in U.S. dollars.

Nemertes Research found that a managed telepresence service in multiple locations could be paid for by reducing international travel by as much as 3%.

Moreover, when Nemertes interviewed 117 senior IT officials in mostly U.S. companies, 55% of the respondents said they were using room-size videoconferencing already and had an interest in increasing their use of the technology. Expensive, room-size telepresence systems are not selling briskly, but there has been an "uptick" of interest in purchasing videoconferencing gear and services, Jude said, although he could not say by how much.

After the 2001 economic downturn, many observers expected videoconferencing usage would soar, but analysts have repeatedly noted that the growth from 2002 to 2005 was not as great as expected. In 2008, things could be different, since videoconferencing technology has improved, is easier for end users to manage and puts less of a burden on networks, Jude said. "We're noting an increase in interest in the room-to-room systems and people are noticing videoconferencing is better than it was, with a better look, feel and use," he said.