A few years ago, setting up a basic video-conferencing facility would have cost a company US$50,000. Today, a similar set-up costs more than US$4000-$5,000 and the technology has improved. The result is that more companies are turning to video-conferencing and expecting their suppliers to do the same.
Worldcom reports more than 50% growth in its conferencing business in the past 12 months. On top of that impetus, the events of September 11 have resulted in an accelerated growth in the number of businesses asking questions about video-conferencing, say telecommunications companies.
"Audio and video-conferencing has been huge in the US," says Jeremy Hilburn, general manager APAC for Worldcom. "A lot of SMEs are using conferencing to keep in touch with their customers and internally." The reasons companies give for making the investment in video-conferencing is saving money on travel costs. "That's a negative reason," Hilburn argues.
"Intelligent companies use video and audio-conferencing to make them more productive and more successful by complementing travel. You can bring products to market quicker if you meet more often and liaise closer with your customers. Sitting in the same room may be best, but there are times - even in the same city - when you can't do that. It isn't always practical to meet."
In the SME market, audio remains the most popular form of conferencing - no capital outlay is required and the technology is easy to use. Net conferencing, however, is gaining in popularity because it combines audio-conferencing with a visual aspect.
A company wishing to brief its regional salesforce, for instance, can involve them all in an audio-conference while showing them a PowerPoint-style presentation over an internet connection at the same time.
Eventually, however, as the technology becomes even cheaper and the pressure to adopt it becomes greater, video may supersede both audio and net-conferencing.
"Video used to make people look like puppets with jerky movements and lips that didn't match the words," says Hilburn.
"Now the advances in compression make it near-TV quality. It isn't quite TV quality and people have to have the right expectations. This is complicated equipment, it's much more technical than a telephone. You have to train people not only in the technology, but the etiquette. You don't, for instance, wear a bright shirt or wave your hands around all the time on a video-conference because more colour and movement translates into more data to be transmitted."
Most video conferencing equipment sold today is standards-based, meaning that both parties do not need to have video-conferencing equipment from the same company.
"The driving factors for take-up among SMEs in Asia is that their suppliers and customers have the equipment and they want to use it," Hilburn says.
"Generally, SMEs in the manufacturing sector use it to reduce lead times. Say you have a product that you are making for a US customer and it a prototype needs to be approved by the customer before moving to the next stage. Traditionally, that would have involved couriering something to the States.
"We have one client making toys for Disney who decided instead to invest in video-conferencing, and to install a document camera. They now deal with the client's questions by video in real time and only send over a prototype at the final stage. They estimate they are saving two to three weeks on every product and that within six months the equipment had paid for itself; in fact, it was making additional profit for them."