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May/26/2002
The Sunday Times
Video conferencing is back in the picture
Fear of attacks on planes and the need to save money have revived interest in the technology, writes James Hughes.
Mervyn Davies, chief executive of Standard Chartered places his croissant to one side, arranges his notes and greets Ho KwonPing, Singaporean chairman of the Wah Chang group. Their 8am meeting is about to start.
Davies flicks a few switches and KwonPIng's face comes into focus on the giant screen in front of him. The pair are using video conferencing - and they are among thousands of executives around the globe showing a renewed enthusiasm for the technology.
Since September 11, many blue-chip companies have cut down on air travel because of the fear of terrorist attack but also for reasons of cost. However, the options are few and far between when face-to-face contact is required, and video conferencing is once again proving to be a popular choice.
British suppliers of video conferencing equipment such as Teliris, owned by Martyn Lewis, the former BBC newsreader, have found themselves inundated with calls from big companies, asking about the technology. “The interest has been phenomenal and it looks set to continue,” says Jamie Thomson, managing director, “In the past six months, we have seen sales go up 500%”.
Astra Zeneca, Standard Chartered and Goldman Sachs use video conferencing regularly in place of sending staff abroad and say the benefits are obvious. Goldman Sachs has the system in most of its buildings and in every meeting room in its new River Court offices in London. Reuters, too, uses video conferencing widely and most directors have access to it. Astra Zeneca holds more than 500 conference calls a day in Britain and has 364 studios globally.
Besides the economic benefits, video conferencing also saves time. Kerridge Computers, for instance, has found that on average, video conferencing saves its executives 14 hours of traveling time each month. The company has cut its travel costs by 50% since installing the system.
The Environment Agency says it has saved £1m and 26,000 hours od travel since getting video phones.
But video conferencing has to overcome a troubled history. Many firms that took it up during the Gulf War in 1991 dropped it soon after because of technological problems - and the gremlins have not disappeared completely. Meetings can be disrupted by time delays, the sound on some machines is out of synch with the picture and there are concerns over confidentiality.
Such doubts flow through into the market. Motion Media, a British supplier, reports a huge increase in interest since September 11 but syas few companies go beyond making enquiries.
“We have had a large growth in companies asking about our systems since September 11 but that isn't turning into sales,” says Graham Brown, managing director. “Companies are not spending money and so few are following through and purchasing video phones.
“I think you will find that any [suppliers] who say they have had a marked increase in sales are probably not telling the whole truth. However, once things get better, we will certainly see more and more companies buying into the technology”.
“ People do become disenchanted with the machines if they don't work properly and end up causing additional expense,” says Thomson. “The problem is that companies are confused. First and second generation machines still have several glitches but the third-generation machine has pretty much removed all of these”.
The way the first and second generation machines work is to capture the picture at one end, encode it as data and compress it. This signal is then sent through public-access networks, in most cases phone lines, to an address where it is decoded and displayed on a screen.
One of the problems is that it is difficult to squeeze so much data down a public phone line. Delays will occur at the other end, creating an irritating echo-effect as the picture gets out of synch with the sound.
Video conferencing is also vulnerable to being intercepted, as the signal has little protection on public lines.
Teliris, which has recently released a third-generation system, has managed to overcome many of these problems by sending data on private networks. And improvements in coding and decoding the information have made for faster connections and helped to minimize delays in signal transmission. Picture quality has also been improved. Screens now range from 42-inch plasma models to full wall displays.
The next stage of development is certain to attract the interest of new customers. In the Star Wars films the characters communicate through small holograms. Though this may seem to belong to the realms of science fiction, an American company called Teleportec has already deigned a system that creates a holographic image. It is in its infancy and the image is scratchy and flawed, but the technology is becoming more sophisticated and in the near future, conferences may resemble a scene from the Hollywood saga.
Despite the technological challenges and the concerns over confidentiality, the fans of video conferencing speak with the fervour of converts. Standard Chartered's Davies says: “It is absolute rubbish to say that it will just fade away. When you are spread around 50 countries, it is physically impossible to get to all locations and meet with all individuals. Video conferencing is a concept that has caught on and it is more sophisticated than it was.”
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