Telepresence catching on, but hold onto your wallet

Be prepared to fork over at least $100,000 for that in-the-same-room feeling

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A telepresence system at a minimum must include the codecs (chips that convert data), the compression and decompression devices, the cameras, the displays and what Weinstein calls the telepresence user interface or engine. He says one screen can work fine, depending on the experience a company is looking for.

Step into a telepresence studio and you'll find the typical conference table along with a couple of very large flat-screen displays. The wide screens fill your peripheral vision, Weinstein says, and "your brain sees that as being in the same room" as someone else. "All of this is a way of tricking your mind and making your brain think you're actually at an in-person meeting.

"These telepresence solutions are about meeting, bonding, teaming and meeting face-to-face without getting on the plane — with five minutes' notice," Weinstein adds. "I can conveniently meet with people without sacrificing the experience."

Expect to shell out big bucks

The use of both high-definition videoconferencing and telepresence is on the rise, despite the high prices. Telepresence systems can range from over $100,000 to $400,000 for a complete studio setup. There is also a recurring monthly fee on top of that, ranging from a few thousand dollars to upwards of $18,000, depending on the level of service wanted and the amount of network bandwidth that is required.

In comparison, even high-definition videoconferencing systems cost much less, in the range of $6,000.

Given the cost disparity, telepresence systems — including Cisco's CPS 3000, Hewlett-Packard's Halo, Teliris' 6G and Polycom's HDX 7000 and HDX 9004 — tend to be geared toward larger enterprises that have sky-high travel expenses. For their part, high-definition videoconferencing systems are being eyed more frequently by small and midsize businesses and bank branches.

Additionally, network provisioning and management costs must be factored in. "Some customer environments already have the excess bandwidth available on their network which they can utilize to run telepresence," Jain says. In other cases, she adds, customers would need to acquire a separate overlay IP network to ensure the availability of bandwidth as well as the quality of service required for telepresence.

Immersive telepresence was a $350 million market in 2008, Jain says. She expects this segment to grow to over $1.7 billion by 2014. In contrast, the videoconferencing systems and services market in 2008 was about $1.9 billion. Currently more than 60% of all videoconferencing systems that are sold are HD-based, says Jain.

"The expectation for 2009 was that telepresence was going to take a hit because of the recession and low capex budgets, but we continue to see high growth numbers from the telepresence vendors," Jain says. "Companies and organizations are looking at technologies that will help them through these times with reduced travel budgets, and they want effective technologies to communicate with global teams. And green initiatives are playing into this too.

Concurring with Jain, Weinstein calls telepresence a very fast-growing segment, but says unit sales are in the single digits right now, in the vicinity of 1%. The real action, says Weinstein, is in sales of "a typical videoconferencing solution, high-definition or not, tossing it into a room and enjoying the experience. Telepresence is growing quickly, but it started off small and is not the lion's share of the market."

Telepresence, videoconferencing — or both?

At MetLife, the three Cisco telepresence systems cost just under $1 million to install, according to Paul Galvin, VP of enterprise services in the information technology group. Nugent says he uses both videoconferencing and telepresence, depending on what his needs are. Videoconferencing is a better choice for one-on-one situations, such as "if someone is going to do a quick presentation to me," he says, but telepresence is ideal for meetings where participants are located in multiple offices.

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