Economic Difficulties Boost Videoconferencing Sales

August 11th, 2008    Subscribe To Our Feed

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0805_tandberg.jpgVideoconferencing equipment makers, such as Norway’s Tandberg and its U.S. rival Polycom and LifeSize are riding high as companies try to cut costs
Reducing carbon footprint, a new priority for multinationals, is no easy task for Dutch express-delivery outfit TNT, which operates 47 aircraft and more than 26,000 trucks to move an average of 4.4 million parcels, documents, and pieces of freight each week. That takes a lot of jet fuel and gasoline.

There is not much that can be done to cut back on that traffic, so TNT is instead urging employees to reduce carbon dioxide emissions under a program called Planet Me. A big part of Planet Me is a drive to reduce business travel and use videoconferences instead. TNT estimates the CO2 savings from videoconferencing alone to be 2.6 kilotons a year for the next four years, or a total of 10.5 kilotons.

There are other benefits, too. “We’re telling our employees that using videoconferencing is beneficial not just for the environment, but also for life balance,” says Carin ten Hage, TNT’s social responsibility director. “Top management who fly a lot recognize that spending your life in airports can be really horrible.” Not to mention expensive.

Tandberg Has 40% Market Share
The embracing of videoconferencing by TNT is part of a larger trend. The worldwide videoconferencing systems and services market, which reached $1.63 billion in 2007, is expected to grow to $4.2 billion by 2012, according to technology consultancy Frost & Sullivan, as more companies try to become greener and cut costs.

Few companies are benefiting as much as Norwegian videoconferencing equipment maker Tandberg, which counts TNT as one of its customers. The company, which has dual headquarters in Oslo and New York, leads the industry in revenue with 40% of the global videoconferencing market, says Frost & Sullivan. The U.S.’s Polycom (PLCM) is market leader in number of units shipped. Together, Tandberg and Polycom control about 70% of the market for videoconferencing devices and infrastructure, selling against and sometimes cooperating with Hewlett-Packard and Cisco, both of which make high-end videoconferencing systems.

“There has been a big takeoff in growth,” says Fredrik Halvorsen, chief executive of Tandberg, which had revenues of $630.5 million in 2007, up 50.2% over 2006. “Videoconferencing has become an integral part of corporations’ communication strategy over the last 18 to 24 months.”

Investors Fear Subprime Fallout
Tandberg has racked up 33.5% annualized revenue growth for the past 10 years, and the outlook for 2008 is looking even better. Second-quarter revenues were $194.9 million, compared with $143.8 million in the same quarter last year, representing 35.5% year-over-year growth. Operating profit was $41.2 million, compared with $33.3 million in the same quarter last year.

The stock price, though, has dipped some 37% over the last year. Tandberg does half its business in the U.S. and the fear is that the subprime crisis will lead to cutbacks in spending on videoconferencing equipment, says Halgeir Hollup, a financial analyst at Oslo brokerage ABG Sundal Collier. While economic woes are expected to prompt more companies to buy videoconferencing gear and cut back on travel, one theory is that companies will first lay off employees and then wait before buying new equipment, creating a spending lull, says Hollup.

Tandberg doesn’t see it that way, given its strong growth numbers so far this year. Many companies are still investing in its technology to reduce their overall cost level. Its growing roster of customers includes British banking behemoth HSBC (HBC) and Norway’s Statoil (STO), which uses videoconferencing on its offshore drilling platforms so engineers on shore can diagnose a problem when something breaks down.

Riding the “Perfect Storm”
Polycom is thriving, too. It counts Doubleclick, Adobe Systems (ADBE), and financial-services company Bear Stearns among its customers. “We’re doing a great business right now,” says Robert Hagerty, chief executive and chairman of Pleasanton (Calif.)-based Polycom. A combination of factors is causing what Hagerty refers to as “the perfect storm.”

Travel cost and time savings have always been a key driver for videoconferencing. “However, in times like these when fuel costs are sky high, travel has become more expensive, financial markets are in turmoil, and several organizations have mandated strict travel restrictions, collaborative technologies like videoconferencing get significant attention,” says Roopam Jain, a principal analyst at Frost & Sullivan who specializes in conferencing and collaboration.

Videoconferencing technology, which has been around for almost 20 years, has also significantly improved. Until recently “video quality was not good, voice synchronization was a problem, and it was tough to set up the conferences unless someone knowledgeable was there,” says Rich Costello, research director for enterprise communications at technology consultancy Gartner (IT). “It was not a very pleasant experience overall, so everyone got frustrated.”

Videoconferences Get Second Look
Now, though, “people are willing to give this technology a second look,” says Tandberg chief Halvorsen. For starters, the resolution has become far sharper and less choppy and the audio sync problem has gone away, both in boardroom systems and on desktop systems. That is because high-definition video is now becoming available on the desktop, improving quality and user experience, say analysts.

Meanwhile, the move to Internet Protocol has dramatically driven down the cost, since the calls are sent over broadband networks that charge all-you-can-eat fixed tariffs rather than by the minute. And videoconferencing is no longer confined to special rooms with huge screens that cost anywhere from $3,000 to $300,000 to install, though demand for these high-end systems is booming as well.

The market leaders for big-screen systems for executive suites and boardrooms include Tandberg, Polycom, Sony (SNE), Italy’s Aethra, and a Texas company called Lifesize Communications. HP and Cisco make high-end “telepresence” systems that help people in far-flung locations feel as if they are in the same room. These systems represent only one-half of 1% of all the units sold, but about 12% of the revenues. Although their market share is insignificant, HP and Cisco have access to top-level executives and have raised awareness of the impact on visual communications on the bottom line of corporations. “They have raised the water for all the folks in this pond,” says Andrew Davis, an analyst at Wainhouse Research, a market research firm based in Duxbury, Mass.

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Video Conferencing Use On The Rise

May 26th, 2008    Subscribe To Our Feed

Business communication has come along way since the advent of the PBX phone system and hand-written messages. The lightening speed of conducting business today requires immediate answers to problems, issues, concerns and more efficient communications overall. One missed call could mean the difference between locking in a new account or losing the deal to your competitor. Cost reduction has driven globalization, telework, outsourcing and decentralized company structures that demand better communications infrastructure. Luckily, technology advancements have risen to the occasion. Boardroom video conferencing, once the domain of Fortune 100 executives, is now available to PC desktop users worldwide. And in the near future, video conferencing will take its rightful place, next to phone, FAX and email as essential business tools.

So-called ‘environmental’ costs have also fallen; 10 years ago conference suites had to be specially designed, now any room will do. The rise of public access video conferencing where facilities are rented as and when needed - by companies such as Regus has also helped to open up the technology to smaller companies.

The major indicator of the success of a technology is the point when the client base ceases to treat the technology as a novelty and begins to expect and demand its availability as a matter of course. Examples within the past decade include graphical user interfaces, Email, Internet connectivity, CD-ROM access, and classroom display technology. The establishment of reliable video conferencing standards, the decreasing costs of desktop and portable video systems, the availability of ISDN service, and increasingly robust data networks are creating an atmosphere where video conferencing is making the transition from a curiosity to an expectation. Existing media-capable projection classrooms offer an excellent venue for incorporating this burgeoning technology into appropriate instructional settings and for experimenting with teaching and learning models that include video conferencing as an integral part of instruction, rather than a specialized mode of information delivery.

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Tandberg Video Conferencing Raises The Bar

May 1st, 2008    Subscribe To Our Feed

TANDBERG is consistently first to market with state-of-the art technology. TANDBERG works closely with customers to deliver system features and enhancements that improve the video conferencing experience. Some of TANDBERG’s most unique features are included in the Natural Presence Package, the most comprehensive, user-friendly suite of presentation features in the video conferencing industry.

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TANBERG believes that the success of any video conferencing solution depends upon high quality, reliable, and easy to use products that deliver excellent value. With these elements in mind, TANBERG has developed an extensive portfolio of standards-based products built on leading edge video conferencing technology.

Would you like to see a High Definition Video Conference live?  Call 1-813-984-2800 for more information today.

Big U Media is Florida’s premier provider of High Definition Video Conferencing products.

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What makes Video Conferencing Work?

April 29th, 2008    Subscribe To Our Feed

Interactive videoconferencing is commonly used to connect two locations using sophisticated computer technology. The core of IV is the codec (coder/decoder). This is the electronic device that transmits and receives the video signals that the class members will see on their television monitors. It may be easier to think of the codec as an extremely sophisticated modem. A modem takes digital data and transmits it over regular phone lines. The codec takes analog signals, compresses and digitizes them, and transmits the signals over digital phone lines.

Big U Media offers High Definition Video Conferencing and full Audio/Visual packages.  Complete installation and seamless connectivity.

Call 1-813-984-2800

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High Definition Video Conferencing In Tampa Florida

April 25th, 2008    Subscribe To Our Feed

Videoconferencing allows two or more people at different locations to see and hear each other at the same time, allowing for more effective communication. Videoconferencing systems compress video and audio signals so they can be transmitted over existing telecommunications networks.

Videoconferencing is a powerful telecommunication tool which transmits two-way interactive live video and audio simultaneously between two sites or multiple sites. A CODEC (compressor/decompressor) compresses the television audio and video signals, allowing them to be transmitted via high-capacity, ISDN telephone lines or the Internet. Compression technology makes videoconferencing easy and affordable. And, communication between sites is two-way and interactive.

Contact Big U Media today for a free High Definition Video Conferencing Demo.  1-813-984-2800

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Benefits of Video Conferencing - eTravel at its finest

April 7th, 2008    Subscribe To Our Feed

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