Telepresence,

Effective Visual Collaboration

and the Future of Global Business
at the Speed of Light
By Howard S. Lichtman
Human Productivity Lab
August 2006

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© 2006 Howard S. Lichtman

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1
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Table of Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Understanding the Hard, Soft, and Opportunity
Cost of Physical Travel on Senior Executive Time: . . . . . . . . . . . . 5
Why Traditional Videoconferencing Fails to
Deliver the Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Telepresence — What is it and Why Does it Cost
so Much Money? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
So Why Does Telepresence Cost So Much Money? . . . . . . . . . . . .9
The Importance of Creating Social Connections . . . . . . . . . . . . . 10
Types of Telepresence Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Delivering Telepresence and Effective Visual
Collaboration: The Telepresence Tool Kit. . . . . . . . . . . . . . . . . . . . 15
The ROI of Telepresence and Effective
Visual Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Measuring and Understanding Telepresence and
Effective Visual Collaboration Usage . . . . . . . . . . . . . . . . . . . . . . . . 24
Business Effectiveness — Increased Utility, Greater
Productivity, and Improved Outcomes . . . . . . . . . . . . . . . . . . . . . . 24
Hard Dollar Travel Avoidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Summarized Hard and Soft Dollar ROI and
Intangible Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Telepresence Buyers Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Understanding the Total Cost Ownership and
Acquisition Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
End-to-End Managed Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Custom Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Capitalize or Lease? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Teliris Global Table
2
The Future of Telepresence and Effective
Visual Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Effective Inter-Company Business . . . . . . . . . . . . . . . . . . . . . . . . . . 31
The Interconnection of Effective Visual
Collaboration Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Publicly Available Telepresence Systems . . . . . . . . . . . . . . . . . . . . . 33
Small Office/Home Office (SOHO) and
Consumer Telepresence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
The Rise of the Virtual Organization . . . . . . . . . . . . . . . . . . . . . . . 34
Better and Cheaper Telepresence Solutions . . . . . . . . . . . . . . . . . 34
Distance Learning Will become a Key
Telepresence Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Headends- Content Will be King . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Accelerated Adoption for Economic and
Geopolitical Reasons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Outsourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
The Higher Costs and Reduced Convenience
of Physical Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Dramatically Higher Oil Prices — Peak Oil,
Natural Disasters, Terrorism, Expanded War
in the Middle East or All of the Above. . . . . . . . . . . . . . . . . . . 38
The Decline of the Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
About the Human Productivity Lab . . . . . . . . . . . . . . . . . . . . . . . 41
Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Appendix A: Telepresence Company Profiles . . . . . . . . . . . . . . . . 44
Appendix B: Sponsoring Vendor Marketing Material . . . . . . . . . . 52
HP Halo Collaboration Studio
 Preface

Preface
“The future is already here. It’s just not very evenly distributed.”
— William Gibson
Over the next decade, virtually every major Global 5000 company
will adopt a technology allowing them to interact with people, no matter
how far away, as if they were in the same room. The technology is called
telepresence, and a variety of Fortune 1000 organizations already use it,
reporting both satisfaction and a strong return on their investment.
Telepresence meetings make remote participants life-size, with fluid
motion, accurate flesh-tones and flawless audio. The experience feels
remarkably natural and comfortable for almost any size meeting from
two people to large classrooms.
Introduction
This paper focuses on a group of revolutionary visual
collaboration technologies called telepresence. In the spirit of
full disclosure the author sits on the informal and unpaid Board
of Advisors of telepresence provider Digital Video Enterprises
and was the former Vice President of Business Development at
TeleSuite Corporation (now Destiny Conferencing). This paper
was sponsored by the following companies: ATK Services, Destiny
Conferencing, Digital Video Enterprises, HP, MedPresence, Polycom,
Telanetix, and Teliris.

Telepresence solutions are easy to use and surprisingly handy for Telepresence Conferencing Defined
collaborating on spreadsheets, slide decks, documents or even physical
objects with minute details. Specialized telepresence solutions for specific
Telepresence is the science and art of creating
industries already exist for settings as diverse as pharmaceutical research
labs, movie and television studios, university-level distance learning, and
visual conferencing environments that address the human
neurological operating rooms. factors of the participants and duplicate, as closely as
possible, an in-person experience.
Soon enough, executives and the affluent will equip their homes
with telepresence capabilities, while everyone else will be able to rent a Telepresence greatly improves end-user acceptance,
telepresence system in a hotel, mall, restaurant or pub. Within a decade’s
which dramatically increases usage and substantially
time, you won’t think twice about having a virtual business meeting (or
virtual dinner) with participants from Baghdad, Tokyo, Milan, or all
improves demand, ROI and customer satisfaction.
three cities simultaneously.
While a variety of methods can be used to deliver
While this paper focuses on the current global corporate usage, ROI, telepresence solutions, they typically offer some combi-
main players, and future of telepresence, it barely scrapes the surface of nation of the following improvements over the “talking
the impact the technology will have on society.
heads” experience of traditional videoconferencing:
Telepresence will ultimately produce good, bad and unintended
consequences as it revolutionizes the way the world communicates. • Life-size participants
Already it’s made a mark, and that impact will keep growing in ways we
can only speculate about at the dawn of its inception: • Fluid motion
• It will continue to accelerate commerce, globalization, outsourcing and
the creation of wealth • Accurate flesh tones

• It will dramatically impact the airlines, hotels, global network providers, • Studio quality video, lighting and acoustics
financial markets, advertisers and Hollywood

• It will continue to revolutionize, among other things, global corporate • The absence of visible technology
governance, gaming, education, entertainment, medicine, diplomacy,
home schooling, politics, warfare and pornography • True eye contact, or the approximation of eye contact
• It is and will continue to expand the places where knowledge workers can
in large group settings
live and work while simultaneously shrinking the world around them
• Immersive and/or mirrored environments where partici-
It will be a trip . . . pants feel as if they are in the same physical space
Best,
• A consistency-of-quality between disparate locations.
HSL

Howard S. Lichtman
President, Human Productivity Lab

Destiny Conferencing / Polycom RPX 400 Series

3
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Executive Summary
At its core, business is about face-to-face relationships. Whether
those relationships are between a board member and corporate
officer, salesperson and client, or partners in a joint venture, effective
business communication remains a combination of understanding,
mutual advantage and trust best exercised eye-to-eye between the
main participants.
For decades, business has relied on commercial air travel to
bring together the main players. Unfortunately, commercial air service
continues to deteriorate (flight delays, mishandled bags and consumer
complaints were all up in 2005i ), and last year alone a record five
airlines declared bankruptcy, including mega-carriers Northwest and
Delta.ii Reduced competition and record fuel prices promise more
problems in the future.
Compounding the problem, the Federal Aviation Administration
forecasts a 45 percent growth of commercial passenger volume to
one billion passengers annually by 2017.iii In the same time period, the
FAA estimates that the private aviation jet fleet will double in sizeiv,
putting further pressure on an already strained capacity.
An article in the May 21, 2006 New York Times assessed the state
of the industry:
“Planes are expected to be packed fuller than at anytime
since World War II, when the airlines helped transport
troops. Fares are rising. Service frills are disappearing.
Logjams at airport security checkpoints loom as the
federal government strains to keep screener jobs filled.
The usual violent summer storms are expected to send
the air traffic control system into chaos at times, with flight
delays and cancellations cascading across the country.
And many airline employees, after years of pay cuts and
added work, say they are dreading the season ahead.Those
workers — and there are about 70,000 fewer of them than
in 2002 — will be handling more than 100 million more
passengers this year than they did four years ago.
The friendly skies, indeed.”
Meanwhile, business continues to globalize, further increasing the
length, expense and hassle of both private and commercial aviation in
managing international operations. The 19-hour flight from New York
City to Shanghai runs $2,300 for a 21-day advance coach fare; a 7-day
advance business class ticket costs $9,500.v
As commercial and executive aviation slows down, the speed of
business accelerates. The instantaneous nature of e-mail, webconfer-
encing, and instant messaging have reset expectations of turn-around
times for decisions. Waiting days or weeks to huddle the team doesn’t
cut it anymore. The need to improve productivity and time-to-market
advantage becomes even more paramount in the face of nimble
international competitors who compete with third world labor costs
and first world technology.
4
Many thought that traditional videoconferencing would solve
the problems of establishing face-to-face collaboration. However,
the technology has failed repeatedly to satisfy end-user expectations.
Though videoconferencing has moved from ISDN networks to IP,
displays have gotten larger and better, and video codec resolution has
improved significantly. The average usage of videoconferencing remains
moribund at an abysmal 15 hours per month during a time of global-
ization, increasing costs and inconvenience of physical travel, and the
general speed of business accelerating.vi
Many videoconferencing users complain that talking to the
“camera-on-the-TV-set-on-the-dessert-cart” is uncomfortable and
unnatural. The audio is often poor, the lighting wrong, colors off,
resolution bad, format artificial, controls complex, collaborative tools
weak and overall experience meager. Consequently, traditional video-
conferencing is often the option of last resort, and even then almost
always internally, and almost never for important meetings or with
customers or partners.
Telepresence has dramatically improved the usage and acceptance
of visual collaboration by addressing the human factors of partici-
pants to create a more natural, productive and realistic experience.
Unlike videoconferencing, telepresence works at any scale, from the
desktop to small groups to distance learning classrooms to neuro-
logical surgical education. Quite simply, telepresence lets users feel as if
they are “present” in the same physical space with others who might
be thousands of miles away. The experience is natural, comfortable,
easy-to-use, supremely collaborative and as different from traditional
videoconferencing as the space shuttle is to a commercial airliner.
Where traditional videoconferencing systems average 15
hours per month, adopters of telepresence group systems report
revolutionary usage between 60 and 275 hours per month. Internally,
these solutions reduce travel for intra-company business, improve
productivity and reduce wear and tear on road warriors.
More importantly, most telepresence solutions provide a meeting
experience with a “business-class consistency-of-quality” between
different organizations on the same network while simplifying how they
connect to and securely collaborate with partners, vendors, investors
and customers.
This ability to effectively conduct global inter-company business
will be, without a doubt, the “killer app” of the 21st century, and an
application with potential for the same exponential growth that char-
acterized telephony, the Internet and other communication networks.
As more and more organizations join telepresence and effective visual
collaboration networks, costs will drop, utility will rise and the benefits
of being connected will drive exponential adoption.
The future of business will be the ability to cost-effectively
leverage your knowledge workers around the world wherever
their geographical location, connecting them instantly with a lifelike
experience and providing familiar and contextual tools to easily
collaborate with colleagues, partners, vendors and customers. This
experience will be as natural and comfortable as if everyone was
in the same room.
 Understanding the Hard, Soft and Opportunity Cost of Physical Travel on Senior Executive Time

Understanding the Hard, Soft and Opportunity Cost of Physical

Travel on Senior Executive Time
The expense of physical travel can be measured in several Bristol, UK, and Los Angeles, California, are 5,350 actual air
different ways: First, the hard costs: Airline tickets/executive aviation, miles apart as the crow flies.
hotel rooms, dining, rental cars, car services and taxi cabs. the cost
of the executive’s time while in transit, etc.. • Flying at the G IV’s recommended long range speed of 452 knots or
521 mph makes the flight 10 to 11 hours if you fly non-stop . . .
Oppor tunity Cost Then the soft costs: The
wear and tear on personnel, • . . . but you can’t since the G IV’s range is only 4,350 Nautical
A term used in economics the lost productivity of being Miles, so you’ll need to tack on another 2 hours minimum for
to describe the often hidden inaccessible to colleagues and landing and refueling.
cost of choosing one course away from information and
of action over another. The corporate resources. • That makes the total flying time 12-13+ hours minimum trapped
opportunity cost is the cost in the flying tube. Each Way!
of the next best alternative
use of the same time and And let’s not forget the
• Flying commercial would take 16 to 19 hours if the gods of travel
resources. The opportunity most overlooked cost: the smile upon you.
cost of physical travel is the opportunity cost of doing
value of what could be accom- whatever it is you would have • I wasn’t able to find any flights between Los Angeles and Bristol
plished during the time spent been doing while you and your with less than two stops each way, multiplying the chances of a
preparing for, in transit and/ team are out of the office, in delay or missed connection.
or recovering from a trip.
transit and/or jet lagged.

When I was with TeleSuite Corporation we once received a

call from a senior technologist at a Fortune 1000 company whose
CEO was:

“Sick of Flying Around on his Private Jet”

If you really think about it, it doesn’t matter if you’re relaxing

in the sumptuous leather seating of the $25MM Gulfstream IV that
this particular CEO is reported to own, or wedged into a middle
seat in the steerage section of a commercial 747. Much of the
pain of physical travel is the same: Time away from the family and
friends, lost productivity, jet lag, delayed/cancelled flights and the
opportunity cost of being trapped in a flying aluminum cylinder
40,000 feet above the ground.

I had just joined TeleSuite as a new employee when this

company called and had only heard the generalities of the CEO’s
pain from the other members of the executive team. Later, I’d
learn more of the specifics: The CEO spent hundreds of hours
flying between Los Angeles and Bristol, England in a single year to
complete a multi-million dollar project and cement what would
become a very profitable ongoing collaborative relationship with
a strategic par tner.

Now he was looking for telepresence solutions that would

allow the company to leverage its talent around the world without
extensive physical travel. Still, were the costs and pain of physical
travel really bad enough to merit betting millions on deploying tele-
presence? Let’s crunch some numbers on the situation and see:

5
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Now let’s look at the money involved for executive aviation:
• While Gulfstream discontinued the G IV in 2002, the base replace-
ment cost of its upgraded replacement the G450 is $34 MM.
• The G550 is $45 MM.
• Assuming the aircraft are leased for the tax advantages, the
back-of-the-napkin calculations on the monthly payments for a
60-month lease of the $34 MM G 450 with a $1.00 buyout are
over $670K a month.
• That $34 MM is the base cost for unpainted “green” planes with
unfinished cabins. Completing the exterior and cabin can add
$3-5MM depending on the options.
• Even bargain hunting in the “previously owned” section of the lot
is almost as expensive. One 2001 G IV in Las Vegas recently listed
for a fire-sale price of $28MM with “MAKE OFFER — MUST
SELL!!!!” emphasized in the ad.
• Tack on the direct operating costs of the G IV including fuel,
airframe and engine maintenance, charts, catering and landing
fees (estimated at $2,475 an hour on the OmniJet Trading
Website) and the cost of ownership really starts to climb.
• Next, add the Annual Fixed Costs that OmniJet estimates at
$540,000 a year including crew salaries, hangar costs, insurance,
training and modernization.
• That brings the total estimated annual budget for flying the G IV
400 hours a year (or 16 round trip flights between Burbank and
Bristol) not including aircraft purchase price or lease payments
to $1,584,000 or $3,935 an hour.
And we haven’t even touched on the direct cost of the
CEO’s time . . .
According to the Economic Policy Institute, the average total
compensation for a CEO in 2005 was $10,982,000.
Assuming a CEO works 50 hours a week (probably a fair
estimate given the responsibilities of running a Fortune 1000
6
company) and takes three weeks of vacation a year, his direct
employment cost to the company is around $4482.44 an hour, or
more than the $3,935 an hour cost in Direct Operating and Annual
Fixed Costs for 400 hours of flying time.
Let’s assume that physical travel takes the same toll on CEOs
as it does on other mortal men. Jetlag, take-offs/landings and the
need for food and sleep leaves them with 50 percent of their time
in the air for getting any work done. Factor in a loss of 100 hours
per year of productive work in the case of our 200 hour frequent
flier and the hard cost of the lost time attributable to physical travel
in the cost of employment alone in this one example is $448,244
(and we haven’t even touched on the cost for the rest of the
executive team, managers, and employees).
Travel is hard physically, stressful, and especially inconvenient
for families. Many CEOs are already wealthy and if they ever tire of
hauling themselves around the world, they can take all their chips,
go home and leave the board of directors to deal with investor
uncertainty, loss of momentum and an expensive Heidrick and
Struggles search.
So, while road warriors suffer the physical and mental pain of
physical travel, shareholders pay an even higher price in addition to
the hard and soft costs of executive aviation and the employees’
time. The hidden cost of physical travel is that often overlooked
opportunity cost of keeping the executive team, managers and
employees trapped in an aluminum tube for hundreds of hours a
year. Potential lost revenue to the company: staggering.
Put quite simply, the true cost of keeping employees up in
the clouds are the lost profits from the products and services that
don’t get researched, developed, tested, project managed, manufac-
tured, inventoried, transported, distributed, sold, billed, recognized,
and generally moved along through the process as quickly when
the team is airborne, jetlagged or in-transit between locations.
Steve Reinemund, the CEO and Chairman of PepsiCo and an HP
Halo customer, has announced a goal of replacing the time that
employees spend traveling internally with time spent meeting with
customers and prospective customers. The example seems starkly
illustrative of the opportunity cost concept and the benefits of
reducing avoidable internal travel.

Why Traditional Videoconferencing Fails to Deliver the Goods
“It can’t be done, Tom!
It can’t be done! I admit
that you’ve made a lot of
wonderful things — things
I never dreamed of — but
this is too much. To transmit
pictures over a telephone
wire, so that persons cannot
only see to whom they are
talking, as well as hear them
— well, to be frank with you,
Tom, I should be sor ry to see
you waste your time trying to
invent such a thing.”
— Barton Swift to his son Tom Swift in Tom Swift and his Photo
Telephone, 1914
The first mention of electronic visual communications I’ve ever
seen is in “Tom Swift and his Photo Telephone,” published in 1914
by Victor Appleton. The book’s alternate/subtitle, “The Picture that
Saved a Fortune,” seems especially apropos given the multi-billion
dollar stakes in the coming battle to connect the conference rooms,
desktops and living rooms of the world.
Videoconferencing has been around since 1956, when AT&T
built its first Picturephone test systemvii. It has steadily improved
in capability and functionality, but users haven’t exactly universally
embraced it. Traditional videoconferencing systems have seen
dramatic improvements in screen resolution, audio quality, reliability,
security and ease-of-use, while the cost of group videoconferencing
systems have declined dramatically. According to Wainhouse
Research, an analyst firm that follows the conferencing industry,
usage of traditional videoconferencing group systems averages 15
hours per month per end point. While some organizations do see
higher usage, it pales in comparison to the demonstrated usage of
telepresence and effective visual collaboration solutions.
Instantaneous, not limited by geography, and allowing
communication between multiple parties in multiple locations,
videoconferencing should be a “slam dunk” for business communi-
cations. So why does it fail to deliver year after year in connecting
the world? Why are only a small fraction of meetings done over
videoconferencing, especially important meetings where relation-
ships are formed, where body language is as important as what
is said, and meetings with partners, clients or prospects? Why has
Why Traditional Videoconferencing Fails to Deliver the Goods
videoconferencing’s average usage per endpoint per month barely
moved even as globalization has increased, travel has become more
difficult, the threat of terrorism has grown, and the pace of business
has accelerated?
Traditional videoconferencing’s ugly little secret: Many people
don’t like the experience and prefer not to use it.
For years the traditional videoconferencing industry produced
a variety of spreadsheets, graphs and even interactive tools that
promised substantial hard-dollar ROI based on avoided travel
between a company’s internal locations. Some companies in
the field estimated additional soft-dollar benefits from improved
productivity. There was only one problem with the traditional
videoconferencing provider’s calculations:
“But our videoconferencing end-points are
averaging more than 15 hours per month?”
Organizations that use traditional videoconferencing more
than 15 hours per month typically do so because:
• They’ve applied videoconferencing industry
“best practices”: Dedicated QoS IP networks;
higher bandwidths; proper environmentals in lighting
and acoustics; good user training/IT support and
improved ease-of-use through programmable
graphical user interfaces
• Top down mandates curtailing business travel and/or
requiring employees to use videoconferencing
• Low ratio of videoconferencing end-points
to employees
Since no one really liked traditional videoconferencing very much,
they didn’t view it as an alternative to an effective in-person meeting,
and didn’t use it nearly as often as the providers projected.
When corporations do use videoconferencing, it is internally,
with colleagues only or because there isn’t another option.
7
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
The Observant Videoconference Experience
In trying to replicate the experience of a face-to-face meeting,
traditional videoconferencing fails the human brain’s smell test
(tiny remote participants, jerky motion, poor audio, limited body
language visible, no eye contact, etc.). In my experience working
with such systems and talking with psychologists, I believe that it
also causes fatigue as the brain tries to process and adjust to two
different experiences simultaneously:
• The Medium (i.e. the observant experience itself: the obvious
TV set, the 8-inch tall remote participants, the visible camera, the
delay, the poor audio quality, the unnatural format, etc)
• The Content (i.e. what is being said, the body language of the
participants (if visible), etc.)
The brain, consciously or unconsciously, objects to this conflict
and, quite naturally, resists the experience. As a result, productivity
and ROI suffer.
8
Traditional Videoconferencing Companies
Going in the Wrong Direction
The logo of high-definition videoconferencing provider
Life-Size Communications (whose website refers to its set-top
videoconferencing solution as “telepresence-like”) unintentionally
crystallizes one important way videoconferencing goes wrong. The
LifeSize logo seems to suggest that the key to achieving a more
realistic experience is by increasing the size of the image in the
vertical plane.
However, humans have a forward-facing vertical field of view
of between 120 and 135 degrees, and a combined horizontal
field of view of about 180-200 degrees.viii In achieving a realistic,
immersive “Life Size” visual experience, it is actually more important
to address the horizontal field of view and peripheral vision.
Telepresence providers achieve this with multiple, large format
displays and video walls. LifeSize Communications, which makes a
superb high-definition camera and codec, should be focused in the
opposite direction:

Telepresence — What is it and Why Does it Cost so Much Money?
About a decade ago, while the traditional videoconfer-
encing industr y was busily working on commoditizing the
“plastic-camera-on-the-TV-set-on-the-desser t-car t,” a couple of
smar t resor t developers in the Caribbean, decided to take a
different approach. Herold Williams and David Allen wanted to
give their well-heeled guests an effective way to conduct business
without having to leave their little slice of paradise. They decided
to get the human factors of the meeting right (life-size remote
par ticipants, superb acoustics, culturally correct positioning, the
approximation of eye-contact, to name but a few) and then
integrate the electronics around the human experience. They
founded TeleSuite, the world’s first commercially successful
telepresence company. Backed by a visionar y investor, Karl Eller,
and suppor ted by innovative, infinitely patient, early adopter
customers such as AOL, 3COM, PricewaterhouseCoopers,
and Cigna, the company’s product averaged 60-130+ hours
per month, per site, four to seven times the usage of traditional
videoconferencing.
TeleSuite Co-founders: David Allen and Herold Williams
This end-user acceptance didn’t come cheap. Flying in the face
of the conventional videoconferencing wisdom of the time — stack
em’ high and sell em’ cheap — TeleSuite Systems cost (and still
cost) hundreds of thousands of dollars per room, with thousands
of dollars more in monthly charges per location for private network
connectivity, support and maintenance.
Telepresence solutions from HP and Teliris can run north of
$10,000 dollars per month, per location. Deploying a site to an
international location with limited fiber optic capacity can run as
high as $40,000+ per month.
Traditional videoconferencing desktop solutions range from
sub $100 webcams to $3,000 to $5,000 dollars for a dedicated
desktop videoconferencing solutions. Telepresence provider Digital
Video Enterprises’ true eye contact displays start at $7,500 a piece
and their true eye-contact, high-definition Executive Telepresence
Solution is almost $30,000.
Telepresence – What is it and Why Does it Cost so Much Money?
So why does telepresence cost so much money?
Answer: Because the human brain is so damn smart!
From the first seconds of life your brain has become
accustomed to visual collaboration, with your eyes as “cameras”
delivering video to the “display” that is your brain. The retina
and optic ner ve are actually outgrowths of the brain itselfix, an
organ with hundreds of millions of neurons devoted to vision.
A full 30 percent of the brain’s cor tex is devoted to vision,
versus eight percent for touch and three percent for hearing.x
Whereas each optic ner ve that carries signals from the retina to
the brain consists of around a million fibers, each auditory nerve
is limited to about 30,000. xi Over your lifetime, your brain has
developed cer tain innate preferences for communication, with
“video” being its hands down favorite.
Studies have shown that both comprehension and retention
are improved when you see information in addition to hearing
it. Most impor tantly, some behavioral psychologists believe that
70 percent to 80 percent of communication is non-verbal xii:
facial expressions, gestures, posture and eye contact, which the
brain processes quickly, naturally and often subconsciously for
a richer understanding of what is being communicated than
through speech alone.
To more closely replicate an in-person meeting and “trick”
the brain into accepting the experience, telepresence providers
address a range of human factors that traditional videocon-
ferencing doesn’t. It’s more expensive, but the more natural,
comfor table, immersive experience of telepresence improves
the quality and quantity of visible non-verbal communication.
This superior experience dramatically improves usage, which in
turn drives productivity and ROI.
Visionary Telepresence
Investor Karl Eller
9
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

The Importance of Creating Social Connections

features (eyes, ears, etc.). Early in their development, they
For over five years, social scientist Dennis Sandow has
focus on the whole face and become aware of changes
conducted social action research for HP. His work documents
indicating displeasure, joy, excitement, etc. Just as in
how dynamic social systems create organizational value that
face-to-face encounters, Halo opens the biological
crosses the boundaries of traditional organizational char ts.
pathways required for conversations.”
Influenced by Chilean biologist Dr. Humber to Manurana, who
focused on intelligent action in social systems where everyone
In addition, because social network encounters are face-to-face,
accepts each other as legitimate par ticipants, Sandow has
Sandow believes that the visual collaboration experience provides a
helped HP understand and map the networks that create value
level of “stimulus control” where the intensity of the social experience
in the organization.
elicits a greater degree of focus and active partici-
pation than could be achieved in a conference
call or webconference. In a whitepaper for HP
that Sandow contributed to, he characterized the
benefits of the HP Halo Collaboration Studio:

While Halo has proven to reduce

travel costs, it is also reported to bring
new levels of group productivity. As
informal social networks begin to meet in
Halo rooms, they accelerate innovation,
problem solving and project completion.
Social capital or group productivity
improves for a number of reasons.
Face-to-face interactions that occurred
quarterly or semi-annually now occur
on a daily basis allowing informal social
networks to flourish. Travel time and its
physical effects on individual productivity
are eliminated. Finally, loss of productivity
from being away from the home office
is avoided, while improved quality of life
is realized, both of which contribute to
productivity on the job.

HP Social Network Map Showing Social Network Ties Across the Company
and Around the World

When HP started using the Halo Collaboration Studio,

Sandow had a front row seat to observe how the technology
could improve and accelerate the collaborative process of key
social networks to help the organization. In an interview for this
paper, Sandow explained why face-to-face interaction is key to
effective social collaboration:

“Brain research using Magnetic Resonance Imaging

(MRI) has shown that facial recognition stimulates
the emotional regions of the brain where agreement,
consternation, joy, play, pleasure and seriousness are
found. Up until age 2, children focus on specific facial

10
 Telepresence – What is it and Why Does it Cost so Much Money?

Types of Telepresence Conferencing Solutions

Telepresence conferencing solutions can be generally grouped into the following categories:

Continuous Presence Group Systems — Continuous Presence Group Systems generally seat four to eight primary participants, though
many providers have solutions that can add a second tier of seating to the environment. I believe the group system is the most important
format for business because it most effectively replicates the traditional across-the-table business meeting in the usual and customary format
with capacity for a traditional executive or project team.

Providers include: Destiny Conferencing, HP, Polycom RPX, Teliris, and Telanetix

HP - Halo Collaboration Studio

Destiny Conferencing / Polycom RPX 408 Series 11

Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

Telepresence Distance Learning Classrooms — Holding from 18 to 36+ participants in an effective format for classroom instruction,
distance learning solutions allow organizations (corporate or educational) to conduct instructor lead, classroom training between their own
internal locations and those of other institutions on their effective visual collaboration network.

Providers include: Destiny Conferencing, Polycom RPX, Teliris

Polycom RPX 400 Series / Destiny Conferencing / MedPresence

Teliris GlobalTable VirtuaLive 360

12
 Telepresence – What is it and Why Does it Cost so Much Money?

Small Group Telepresence Systems — Small group systems are sometimes referred to as “one-to-three” or “one-to-four” person
solutions. These solutions are less costly, seat less participants, and can be mobile. The video codec is usually a standards-based traditional
videoconferencing codec and systems can be run on a company’s existing network if the proper bandwidth is available and compliment/
improve traditional videoconferencing deployments.

Providers Include: ATK, Digital Video Enterprises,

ATK I Vision Digital Video Enterprises Telepresence 50

Desktop and Executive Solutions — Desktop and Executive Solutions extend telepresence capabilities to executive offices or home
offices improving communications between the executive team and key managers.

Providers Include: Digital Video Enterprises

Digital Video Enterprises Desktop Telepresence Display Digital Video Enterprises Executive Telepresence System

13
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

Specialty Telepresence Solutions and Environments

These can include unique telepresence applications:

• DVE’s telepresence podium, which can project a life-size and life-like image
of a speaker into one or more locations.

• The MedPresence MOR 400, which integrates a telepresence capability

into an operating room, allowing a
surgeon to interact with remote medical
students during a procedure.

• DreamWorks Vir tual Studio

Collaboration solution, which allows
for motion picture and animation
stor yboarding between sites and film
editing.

• Research and Development

Environments, such as the phar-
maceutical company that has used
Teliris’ technology to create a vir tual
lab environment between remote
locations.

Digital Video Enterprises Telepresence Podium The MedPresence MM200 is a portable telepresence solution that
deploys from its own shipping crate and can be easily set up at
remote hospitals, physician’s offices, and/or conference venues.

MedPresence MOR 400

14

Delivering Telepresence and Effective Visual Collaboration: The Telepresence Toolkit
Telepresence is an art and science of trade-offs: cost versus
performance, quality of environment versus available space, func-
tionality versus ease-of-use making the experience and quality of
communication in different telepresence systems vary. Adding to the
complexity, many solution elements are the intellectual property of
a specific firm and protected by patent. Nevertheless, most telepres-
ence solutions provide some combination of the following features.
Eye Contact
Eye contact is chief among the body’s non-verbal cues. From
infancy, we are biologically drawn to the gaze of our parents, estab-
lishing a preference for personal communication that continues
throughout life. Eye contact between humans is physiologically
powerful, eliciting changes in blood pressure and heart ratexiii and
increasing brain activity.xiv The information transmitted through eye
contact is rich and varied:
— Eye gaze provides many communication fundamentals, including:
feedback, conversational regulation (turn taking), and the expres-
sions that punctuate emotion.xv
— Mutual eye gaze has been described by psychologists as “the key
to the awareness of the thoughts of another”xvi
Persons with strong eye contact are perceived to be more
honestxvii, attractivexviii and successfulxix. Conversely, psychologists
call people with poor eye contact as “gaze-avoidant personalities,”
rated less favorably in the eyes of others.xx
Traditional videoconferencing systems deliver poor eye contact
because the problem of parallax leads participants to intuitively
focus on the eyes of the remote participants and not the camera. I
know of several traditional videoconferencing vendors and resellers
that actually place a camera in front of the display (obscuring the
view of the remote participants) of the videoconferencing systems
they use for demonstrations at their corporate headquarters. This
improves the experience for prospective customers who connect
Telepresence – What is it and Why Does it Cost so Much Money?
to them from trade shows or resellers but they fail to mention the
fact that the prospective customers are hardly getting what could
be considered an accurate representation of the offering.
Digital Video Enterprises provides users with eye contact by
mounting its products with eye-level cameras behind a piece of
silvered glass known as a beam splitter. With the camera hidden
from view (another key telepresence concept covered later),
the remote par ticipant is reflected off the beam splitter from
an upward facing flat screen display. Behind the beam splitter,
an “optical black” background absorbs diffused light, providing
a superior contrast and image to what you’d see if you were
looking directly at the display.
Digital Video Enterprises’ True Eye-Contact Display
Destiny Conferencing’s TeleSuite and Polycom’s RPX mount
multiple cameras behind a rear projection screen at eye-level, each
camera capturing half the scene. The result for participants seated
in the center of the room is an excellent approximation of eye
contact, which is lost the further out you sit to the right or left in
the environment.
Engineered Environments
While more sophisticated videoconferencing integrators
may address such environmental elements as lighting, acoustical
materials, camera placement and the color/reflectivity of
furniture, the overwhelming majority of traditional videocon-
ferencing rooms do not. Simply sticking a videoconferencing
end point in a traditional conferencing room is a recipe for a
mediocre experience:
— Direct overhead lighting casts a shadow from the brow over the
eye socket that the camera magnifies.
— A room decorated with strong, saturated colors can clash
with the clothing of participants and skin tones, rendering them
artificial.
— Sticking a videoconferencing endpoint at the head of a long
conference table assures an unnatural meeting format.
15
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Some telepresence solutions such as Destiny Conferencing’s
TeleSuite, the HP Halo Collaboration Studio, Polycom’s RPX, and
the Teliris GlobalTable solutions, create engineered environments
that precisely position participants. Some of the environmental
aspects engineered environments tackle include:
Lighting — Integrated lighting optimized for video and
positioned to ideally light each position in the environment.
Cultural Proxemics — Precisely positioning the seating to
make the meeting format “culturally correct,” life-size and natural
for both site-to-site connections and multi-site connections.
Mirrored Environments — Creating environments that are
identical with the other remote locations in the network. This way,
all participants seem to share the same physical space.
Acoustics — Using acoustical materials to improve both
sound absorption (eliminating reverberation of sound in the envi-
ronment), and sound insulation (blocking external sounds such as
conversations in the hallway, outside traffic, or the building’s air
conditioning system). In addition, many telepresence providers
have directional audio that makes the sound appear to be coming
from the direction of remote participants on the screen.
Absence of Visible Technology — Concealing as many aspects
of the conferencing technology as possible. Studies have shown that
the even when the brain’s visual cortex has been temporarily shut
down, the brain can still process detailed visual information subcon-
sciously.xxi Because human beings tend to behave differently in front
of a camera (sometimes referred to as the “documentarian’s curse”),
having a camera visible in a conferencing environment reduces the
comfort level of participants and naturalness of the meeting. Destiny
Vendors Deploying Private Network Solutions
Vendor/Solution Bandwidth Utilized
Destiny Conferencing — 2 Screen System 1.54 Mbps
Destiny Conferencing — 4 Screen System 3.0 Mbps
HP Halo Collaboration Studio Confidential
MedPresence — MCR/MOR 400 4.5 Mbps
Telanetix — Digital Presence 1 Mbps to 45 Mbps
Teliris — Standard GlobalTable 2 Mbps to 45 Mbps
Teliris — High Definition GlobalTable Confidential
Telepresence Systems — Vendor Bandwidth Recommendations
Vendor/Solution Bandwidth Recommendation
ATK Services - I Vision 1.5 — 4MB
Digital Video Enterprises - Executive Telepesence
1.5MB
System, Telepresence 50, Telepresence Podium
Polycom RPX — 200 Series 1.5MB Minimum
Polycom RPX — 400 Series 3.0MB Minimum
16
Conferencing’s TeleSuite, Polycom’s RPX and Telanetix use small lenses
concealed in a small opening in the display to minimize the effect.
Teliris offers options that hide the camera behind polarized glass and
in several of its solutions; Digital Video Enterprises is able to completely
hide the cameras at eye level behind the display.
Video Quality
Of the many elements that go into an effective visual collabo-
ration, video quality remains one of the most important.The quality
of video transmitted over Internet Protocol (IP) networks depends
on a number of factors:
• The amount of bandwidth available to the codec
• The quality of the network over which it is being transmitted
• The video resolution of the video codec and camera
Telepresence and effective visual collaboration providers
improve video quality using a variety of methods:
Increasing Bandwidth — Bandwidth is the measure of the
amount of information that can be transmitted across a network.
The more bandwidth you have, the more visual information you
can transmit. The majority of deployed traditional videoconferencing
endpoints still use ISDN networks that typically transmit between
themselves at about 384K (384,000 bits per second). New current
generation IP videoconferencing endpoints are capable of speeds of
768K, 1.54Mbps, 4Mbps, or greater. Destiny Conferencing, HP Halo,
Telanetix and Teliris all use IP networks that provide more dedicated
bandwidth than traditional ISDN and the overwhelming majority of
IP videoconferencing deployments.
Bandwidth Deployed
2 x T1/E1 — 3.0 Mbps
3 x T1/E1 — 4.5 Mbps
DS3 - 45 Mbps
3 x T1/E1 4.5 Mbps
4 x T1 (6 Mbps) or DS3
DS3 - 45 Mbps
Confidential
 Telepresence – What is it and Why Does it Cost so Much Money?

Improving Bandwidth — High Bandwidth Dedicated,
QoS Private Networks
Because of the real-time nature and delay intolerance of
interactive video, simply throwing more bandwidth at a video
codec does not guarantee a seamless picture so many telepres-
ence providers deploy dedicated Quality-of-Service (QoS) private
networks to ensure quality. Transmitting video over IP networks
takes the compressed video from the codec and breaks down the
data into packets that are then sent to the remote site(s). There
the video is decompressed and displayed on the screen. E-mail or
web surfing can tolerate lost, late, or out-of-sequence IP packets
(known as jitter in videoconferencing parlance), but not real-time
video. When IP packets containing video are lost in transit or arrive
out-of-sequence, the video codec doesn’t have all the pieces of
the puzzle to correctly reassemble the scene, resulting in a jumpy,
freeze-frame effect. This ruins the immersive experience and “jolts”
the brain back to a state of disbelief. A one-way latency (the time
it takes IP packets to traverse a network and process through the
video/audio codecs) of over 250 milliseconds would result in a
perceptible and annoying delay when remote participants speak.
Because the Internet is a “best-effort” network where no
packets receive prioritization over any other packets, telepresence
solutions need dedicated private networks that ensure extremely
low latency, packet-loss, and jitter. Much of the developing world,
such as China and India, doesn’t have abundant network bandwidth
of the quality required to support the real-time interaction of
telepresence, making the cost of delivering a high-bandwidth QoS
network substantial in those locales.
Increasing Resolution
Video resolution can be defined as the number of pixels across
the width and height of a display. The greater the resolution, the
sharper the picture. The sharper the picture, the better the visual
realism, which improves the quantity and quality of the informa-
tion received by the brain as the subtle nuances of interpersonal
communications become more apparent. These subtle nuances
include perspiration, a slight grimace, or other nonverbal cues that
might provide a window into the thoughts, truthfulness, motivation
or comprehension level of remote participants.
A higher degree of visual realism also improves the brain’s ability
to suspend disbelief and accept the telepresence experience, letting it
stop focusing on the “medium” and concentrate on the “message.”
The majority of deployed traditional videoconferencing
systems are limited to providing FCIF resolution -352 x 288
(352 horizontal pixels x 288 vertical pixels) at 15 - 30 frames
per second. By comparison, standard cable television delivers a
resolution of 672 x 384 at 30 frames per second and HDTV
delivers 1280 x 720 or 1920 x 1080 at 30 to 60 frames per
second. Telepresence providers use current generation video
codecs including many that are capable of high-definition images
to provide a superior picture quality.

Vendor/Solution # of people screens People Screen Size & Type Resolution Per Compression
People Screen Standard
ATK Services I Vision 1-5 50” DVE telepresence display 1024 x 768 H.263/H.264 MPEG-4
Destiny Conferencing TeleSuite 2 4’ x 4’ panels 48” x 43” Rear Projection 2SIF (352 x 576) H.263/H.264 MPEG-4
200 Series Fresnel Linticular scaled to 1024 x 768
Destiny Conferencing TeleSuite 4 4’ x 4’ panels 48” x 43” Rear Projection 2SIF (352 x 576) H.263/H.264 MPEG-4
400 Series Fresnel Linticular scaled to 1024 x 768
Digital Video Enterprises 1-3, 8+ in Multipoint or 40-46” LCD, Hidden 720p HDTV H.263/H.264 MPEG-4
- Executive Telepesence System Switched Presence Camera behind Screen
Digital Video Enterprises 1-3, 8+ in Multipoint or 50” Plasma, Hidden Camera 720p HDTV H.263/H.264 MPEG-4
- Telepresence 50 Switched Presence behind Screen
Digital Video Enterprises 1, Appears behind Holographic Projection 720p HDTV H.263/H.264 MPEG-4
- Telepresence Podium Podium technology
HP Halo Collaboration Studio 3 50” plasma MPEG-2
MedPresence MOR 400 4 4 flat screen or Rear 1024 x 768 2CIF or H.263/H.264 MPEG-4
Projection Video Wall Greater
MedPresence MCR 400 4 4’ x 4’ panels 16’ x 32” Rear Projection 1024 x 768 2CIF or H.263/H.264 MPEG-4
Video Wall Greater
Polycom RPX 200 Series 2 4’ x 4’ panels 8’ x 42” Rear Projection 1024 x 768 2CIF or H.263/H.264 MPEG-4
Video Wall Greater
Polycom RPX 400 Series 4 4’ x 4’ panels 16’ x 42” Rear Projection 1024 x 768 2CIF or H.263/H.264 MPEG-4
Video Wall Greater
Telanetix 2 Customer’s Choice 1280 x 360 MPEG-4
Teliris — Standard GlobalTable 2-8 42” up to 100” Flat Panels D1 MPEG-2 or MPEG-4
Teliris — High Definition 2-8 42” up to 100” Flat Panels 720p or 1080i MPEG-2 or MPEG-4
17
GlobalTable
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

Audio Quality

Audio quality is one of the most underestimated aspects of an
effective visual collaboration experience. Telepresence providers
strive for a level of acoustical realism that makes remote partici-
pants sound natural and in the room. This realism in a conference
depends on a number of factors:
simultaneously without losing any of the audio from either
location. This level of audio can’t be achieved in traditional multi-
point videoconferences. Telepresence providers including Destiny
Conferencing,Telanetix, and Teliris solve this problem by maintaining
direct connections to each location.

Latency and Lip Synch — A remote participant’s speech must
be in sync with the movement of his or her lips. Similar to video
quality, high latency will produce a delay in the time between when
something is said and heard on the remote end. This is a function
of the quality of the network.
Audio Quality — As with video quality, the more audio
information captured and transmitted to a remote location results
in a more faithful representation to listeners. Most telepresence
providers offer CD-quality audio with good echo cancellation
in a “full duplex” configuration, allowing both sides to speak
Spatial Orientation — In a traditional group videoconference,
with a single microphone and single speaker on each side, it is often
difficult to immediately determine which tiny remote participant is
speaking, referred to as spatial orientation. A traditional “Hollywood
Squares”-esque multi-point videoconference exacerbates this
problem by making participants even smaller. Most telepresence
group systems, on the other hand, make remote participants life-
size, improving the ability to understand who is talking and some
use directional audio to make the sound appear to be coming from
a particular speaker or direction in the environment.

Vendor/Solution Audio Quality Audio Features Full Duplex In

multi-point
ATK Services 64 Kbps 20 KHz 5:1 A/V
Destiny Conferencing 64 Kbps 22 KHz Y
Digital Video Enterprises Multiple channel audio and voices can emanate
— Executive Telepesence System, from the location of the people on the screens
Telepresence 50,Telepresence Podium
HP Halo Collaboration Studio CD Quality Audio Y
MedPresence MCR/MOR 64 Kbps 20 KHz Y
Telanetix 128 Kbps 44.1 Studio quality, per channel echo cancellation and Y
KHz noise reduction, equalizatin, level compressor
Teliris — Standard GlobalTable 256 — 384 Kbps Teliris - Standard GlobalTable - High end Y
20 KHz echo cancellation per vectored channel
Teliris — High Definition 256 — 384 Kbps Teliris - High Definition GlobalTable - High Y
GlobalTable 20 KHz end echo cancellation per vectored channel
Polycom RPX 200 Series 64 Kbps 22 KHz Automatically mixes microphones and other Y
audio sources while cancelling acoustic
echo’s and background noise.
Polycom RPX 400 Series 64 Kbps 22 KHz Automatically mixes microphones and other Y
audio sources while cancelling acoustic
echo’s and background noise.
Ease-of-Use

Traditional videoconferencing has long been characterized by
technical complexity, requiring the mastery of often indecipher-
able remote controls and the assistance of a conferencing or IT
professional in the room to set up and start the conference. While
videoconferencing providers have simplified their controls, most
telepresence providers have taken it a step further by:
— Providing concierge services that handle every aspect of
reservation and call set up. This is an option offered by HP Halo,
Destiny Conferencing, Polycom RPX, and Teliris.
— Tightly integrating and simplifying the use of collaborative tools
in the environment.
— Simplifying the ability to launch ad-hoc calls by providing a touch
sensitive GUI or intuitive call set up menu.
— A fixed camera and display solution that captures the entire scene
eliminating the need to adjust the camera and the annoyance of
disruptive panning, tilting, and zooming.

18

As an example: Teliris offers a room availability and scheduling
option that provides a touch sensitive display outside each GlobalTable
room that simplifies ad-hoc usage. Having a hallway conversation with
a co-worker and want to bring in Bob in London? Check the avail-
ability of both GlobalTable rooms at the door, reserve both rooms
and call Bob in London on his cell phone and ask him to pop in for
a quick meeting.
The Teliris GlobalTable touchscreen room availability
and scheduling display
Scaled Geometric Perspective/Life-Size Participants
Most traditional group videoconferencing systems display the
image of remote participants to a single 36- to 50-inch monitor. While
many videoconferencing providers offer dual displays, the second
display is meant for data, a self-view of your location, or another
remote location, not to double the screen real estate. As a result,
the single screen reduces the size and warps the proportions of the
people on the other end.Those non-verbal cues that are so important
to communication end up getting lost in the shuffle, limiting the
suspension of disbelief required to take participants from an observant
experience to an immersive one. Most traditional videoconferencing
systems display users from more than two locations in a format known
as “continuous presence,” which makes all participants look like they’re
on the title sequence of the Brady Bunch.
Telepresence providers address the
problem of scaled geometric perspective with
large format video walls and multiple monitors,
keeping everyone life-size, or almost life-size
and in perfect proportion.
Multi-Point Meetings — Conferencing with
Three or More Locations
Traditional multi-point videoconference
can be broken into two main formats:
Continuous Presence — Each remote
site is reduced in size and visible on the screen
in with various screen formats of “Hollywood
Squares”.
Telepresence – What is it and Why Does it Cost so Much Money?
Voice Activated — The remote site that is speaking or spoke
last is visible on the screen, leaving the other locations invisible until
they speak.
Neither approach offers much in the way of replicating the
natural dynamics of a face-to-face meeting. Traditional continuous
presence formats often shrink images so small they prohibit the
non-verbal cues so essential to effective visual collaboration. Voice
activated formats also negate this benefit by keeping most participants
off-screen.
Most telepresence providers devote single or multiple screens
to each remote location, allowing the key individuals at each to
remain life-size or almost life-size.
Illustrative example of a three-site, multi-point meeting using
the Teliris GlobalTable
While group telepresence environments do have their limita-
tions (the number of visible life-size participants is limited to the
available screens in the environment), the overall experience is
substantially more natural, comfortable and productive than the
tiny remote participants of videoconferencing. Some remote
participants may not be visible on-screen, but all of them have a
life-size view of the action. Besides, most large-group meetings tend
to be dominated by a small number of speakers anyway.
Teliris uses a proprietary concept
called “Vir tualVectoring” to provide realistic
lines of sight and audio direction in a multi-
point meeting. To explain Vir tualVectoring,
let’s expand on the three-site GlobalTable
meeting above, using some additional
images supplied by Teliris.
To keep the appropriate orientation
between speakers in a multi-point meeting,
GlobalTable participants at each location tell
the system where the active participants are
sitting. Because Teliris places a dedicated call
between each site with a specific camera,
microphone and display for each position, the
participants are able to maintain their lines of
site and the direction of audio when speaking
with multiple locations.
19
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

The HP Halo Collaboration Studio can connect up to four sites with up to four participants visible at each location.

Destiny Conferencing’s TeleSuite System and Polycom’s RPX can connect up to five locations in their 400 series offerings with from two to twelve
remote participants visible per screen depending on the model.

20
 Telepresence – What is it and Why Does it Cost so Much Money?

Switched Presence — a proprietary solution offered by Digital Video

Enterprises and ATK Services, switched presence gives each participant a
microphone with a small control unit installed under the lip of the table in
their group system. Everyone in the multi-site conference can take “the conch”
by pushing a single button, which switches the focus of all remote sites to that
participant, accompanied by a quick screen fade. This way, each participant
appears life size and appears to have eye contact with all participants.

Data Collaboration Digital Video Enterprises / ATK switched presence control unit

Data may enter a visual collaboration environment from a laptop, USB flash drive, CD, piece-of-paper or other physical object, such as
a circuit board. To handle all this input, telepresence environments use a variety of tools, including:

Collaboration Screens — All providers of group telepresence systems provide screens for sharing power point slides, documents or
the output from document and object cameras. Placement of the screens differs in each environment.

Teliris GlobalTable Data Collaboration Screen

Destiny Conferencing, Polycom RPX and MedPresence provide 17” monitors between each two seats

Telanetix Digital Presence System has data collaboration on the outside screens 21
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

Plug and Play Data Collaboration — Many telepresence

providers simplify sharing data between locations by providing
a plug and play VGA connection that lets participants connect a
laptop for easy sharing between locations.

Document Replication — Teliris offers a document replica-

tion system that automatically scans, distributes and prints hard
copies of physical documents to all locations in a conference.

Teliris Document Replicator

HP Halo Collaboration Studio’s Plug and Play Data Collaboration

Document and Object Cameras — The HP Halo Studio and

ATK’s I Vision offer a ceiling mounted high resolution, high magnifi-
cation camera that lets users share documents or physical objects
on the studio’s 50-inch collaboration screen. The magnification and
resolution are high enough to show detail as fine as printed circuit
boards or garment stitching.

22 HP Halo’s High Resolution, High Magnification Document Camera

 Telepresence – What is it and Why Does it Cost so Much Money?

Stand Up Presentation Capability — The Teliris GlobalTable Vir tuaLive 360 telepresence environment offers an optional
stand-up presentation capability which can capture a speaker at a lectern and display the speaker behind lecterns at the other remote
locations. The environment can also capture par ticipants at a whiteboard or an optional stor yboarding capability for the motion
picture and animation industries.

Teliris GlobalTable VirtuaLive 360 With Stand-up Presentation and Lectern Option

Reliability, End-to-End Service and Service-Level Agreements their solutions as an end-to-end service backed up with a Service
Level Agreement covering: System Availability, Network Availability
Telepresence doesn’t offer a lot of productivity advantages if the and Network Quality including packet loss, latency and jitter.
system doesn’t work. Every time. In every location. Around the world.
Various components of end-to-end service typically include:
Complicated telepresence solutions entail the management and
monitoring of multiple, complex sub-systems. These can include: Site Survey — A review of the architectural, facilities,
networking, delivery, and installation logistics of each site. This is
• Video and Audio codecs especially important for engineered environments that may require
• Acoustical components modifications to the facility to accommodate the environment.
• Echo-cancellation
• Multiple microphones and speakers Telco Provisioning — Handling every aspect of provisioning
• Network links the network to each location.
• Local loops provisioned by a telecom provider
• Long-haul transport Proactive Monitoring and Remote Management — Actively
• Network equipment co-located around the world and continuously monitoring the quality of the network and status
• Network premise equipment of the devices with the ability to remotely diagnose and trouble-
• IP Routers/Switches shoot any problems.
• Display Systems
• Flat panel displays and DLP projectors with bulb life issues Concierge Services — The ability for any participant to access
• Reservation Systems an “operator” that can place a call, assist with a reservation, explain
• Gateways to off-network IP and ISDN traditional videoconfer- the collaborative tools or bridge in a telephone participant or
encing end-points legacy videoconferencing end-point.

The sub-systems listed above are a small sampling of the
various technical elements that can comprise a group telepres-
ence solution. This complexity and interdependence is one of the
reasons the majority of group telepresence system providers offer
Equipment Maintenance and On-Site Repair — Burnt-out
bulb in Burma? Mangled microphone in Malaysia? Cracked camera in
Calgary? Many vendors, including Destiny Conferencing, HP, and Teliris,
offer equipment maintenance and on-site repair around the world.
23
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
The ROI of Telepresence and Effective Visual Collaboration
So while traditional videoconferencing systems long promised
substantial Return-On-Investment (ROI), much of that ROI never
materialized because the systems weren’t used. This section looks
at the substantial improvements in usage of telepresence systems
over traditional videoconferencing and then the savings and benefits
that become possible because they are actually used.
Measuring and Understanding Telepresence
and Effective Visual Collaboration Usage
Like traditional videoconferencing, the usage of telepresence
solutions is dependent on a number of factors:
• The size, geographical distribution and business of the organization
• Firms with geographically dispersed knowledge workers
collaborating on software or pharmaceutical development
are naturally heavier users than, say, a mining company or
textile manufacturer, where the majority of employees are
engaged in manual labor.
• Large multi-national firms with offices scattered over multiple
international time zones tend to use their systems across
off-peak hours driving additional usage.
• Whether or not the system is open to all employees or reserved
for management.
• The total number of telepresence sites an organization has and
the total number of legacy videoconferencing systems to which
the telepresence systems can connect.
With that said, how do the major telepresence group system
vendors stack up with traditional videoconferencing’s 15 hours per
month, per endpoint?
• Destiny Conferencing, who also manufactures the similar Polycom
specified RPX, reports some customers averaging as many as
200 hours per site, per month.
• HP, whose 20 active internal Halo Collaboration Studios make
up the largest deployment of telepresence sites in the world, has
systems averaging up 200 hours per month with some hitting
275 hours per month.
• Some of this usage is assumed to be demonstrations for
prospective customers
• Teliris reports average usage at 60 percent of capacity during a
10-hour business day or 120 hours per month, per location.
24
Business Effectiveness — Increased Utility,
Greater Productivity, and Improved Outcomes
“I think the Halo room in the short time we’ve had it has
already increased my team’s efficiency.You have to understand
how we work.We have a large contingent of people in Chicago,
another large contingent in Dallas and a fair number of people
in New York and those people literally traveled every day
between those three sites - and that’s travel. Our expectation
is that this type of travel will virtually stop.”
-Steve Reinemund, CEO and Chairman of the Board, PepsiCo
Increased Utility
The poor quality of the videoconferencing experience has
traditionally limited its usage to primarily lower importance intra-
company meetings. Very few organizations would ever consider
having a Board of Directors’ session or an important meeting
with a customer using traditional videoconference. And if they
have, the outcome was likely limited. The quality of telepresence
has expanded the utility of visual collaboration to applications and
types of meetings previously beyond consideration for traditional
videoconferencing users. Some examples:
• DreamWorks’ Virtual Studio Colloboration initiative lets the
company conduct virtual storyboard sessions between various
campuses and Aardman Animation, a joint venture partner, in
Bristol, UK. DreamWorks credits the use of telepresence with its
ability to ramp up from producing one animated feature a year
to its current pace of two animated features a year, effectively
doubling its revenue potential each year.
• UBS and Oppenheimer used TeleSuite’s publicly available virtual
meeting center at the Waldorf=Astoria to meet with private
investors at another publicly available TeleSuite at the Ritz-
Carlton in Phoenix. The companies’ mutual fund and portfolio
managers could present to, answer questions from, and develop
a rapport with the remote investors. Some of these events were
catered and one concluded with a virtual wine tasting.
• HP, utilizing its own Halo network, transferred a production line
from its R&D beginnings in Corvallis, Oregon to its permanent
home in Singapore. According to HP, the usual timeframe for
such a move is 12 months, with multiple trips between locations.
The HP team responsible for the move estimated that its use of
Halo enabled it to shave six months off the project and avoid 44
international trips.

Greater Productivity
While it is harder to measure the soft-dollar ROI of greater
productivity over traditional videoconferencing, numerous telep-
resence customers have specifically mentioned this as a benefit.
In late 2004 CapitalOne surveyed over 150 employees, from the
CXO level down, who had access to and experience with both a
telepresence system from TeleSuite (now Destiny Conferencing)
and the company’s top-of-the-line videoconferencing rooms. The
videoconferencing rooms were custom integrated solutions that
combined IP videoconferencing running at high-bandwidths, a 60”
display that doubled as a rear-projection interactive whiteboard, a
VCR, a DVD player, a document camera, and a custom-designed,
touch-sensitive, wireless remote control that simplified call set up
and use of the collaborative tools.
Here are some of the results of the survey and participant comments:
“Awesome, we are fans and think it is so superior to videoconfer-
encing that this is the only format we should use going forward”
“All TeleSuite meetings I have attended have been very positive. I
could never use a videoconference again! TeleSuites are great!”
“I set up meetings for T4+ all the time and using TeleSuite (and
learning about the TeleSuite tools) have made meetings so much more
efficient and productive for me. My team always gets excited when we
have the TeleSuite for meetings.”
Improved Outcomes
The quality of the collaborative experience has also lead to
improved outcomes.
Pearson plc, a $7 billion media company with 34,000 employees
in 61 countries, has been a Teliris GlobalTable customer since 2001.
Justine Kanter, an HR and management development executive
at Pearson, was good enough to provide some specific examples
of how Pearson is using the GlobalTable to “share intellectual
property across the company and allowing executives to connect
across business units” without extensive physical travel. Ms. Kanter
credited GlobalTable with enabling a degree of international
collaboration between publishing subsidiaries that had tradition-
ally been in separate publishing niches, leading to one of Pearson’s
most complex and successful product launches ever.
The ROI of Telepresence and Effective Visual Collaboration
In an ambitious attempt to create a visually compelling
cross-curricular reading program for elementary school students,
the company used GlobalTable to connect across the Atlantic the
talents and image library of the company’s Dorling Kindersley (DK)
subsidiary in London with the educational publishing expertise of
Pearson Longman in New York City.
The project, fittingly enough, came to called Four Corners. The
GlobalTable connection allowed the New York and London teams
to meet for over a year, as often as twice a day, to collaborate on
140 titles —textbooks, teacher support materials and CD-ROMs
spanning science, history, geography, art, design and technology, among
others, and each published in four different versions. According to
Ms. Kanter: “First year revenue was estimated at $2m and exceeded
all expectations with actual sales of $10m. It has been heralded as
one of the greatest Pearson publishing success stories.”
Hard-Dollar Travel Avoidance
While the soft-dollar benefits of
telepresence and effective visual collaboration
(improved productivity, business effective-
ness, flexibility and time-to-market advantage)
outweigh travel savings alone, many organiza-
tions evaluating this sort of investment first
focus on the more easily quantifiable hard-
dollar costs of reducing intra-company travel.
In the Fortune 2000 it appears, a lot can be
cut. HP’s travel expenses, including executive
aviation, have been reported to be one
percent of its $86 Billion in revenue, which
equates to about ~$860MM annually.xxii In Q4
of 2005 with only a fraction of their existing
network of Halo Studio up and operational
HP estimated they were able to shave two percent off their existing
travel budget or ~$17.2MM. Cisco’s CEO John Chambers has said
he believes a network of twenty telepresence centers would allow
the company to shave 20 percent off its travel budget.
Let’s look at some actual ROI models to better understand
where the savings come from.
Important Note on the Following Hard-Dollar ROI
Models: With less than an estimated forty companies
actively utilizing telepresence and effective visual collabo-
ration solutions worldwide (and many for less than one
year), ROI data is extremely hard to come by. Many
companies aren’t willing to share their travel data, and
many companies using telepresence solutions never did
any ROI analysis, assuming the Return on Investment to
be a “no-brainer.” While some of the ROI data below is
several years old and — in two cases — from companies
that have not yet deployed telepresence solutions, the
models we’ve established are meant to illustrate the costs
involved in intra-company travel and convey how orga-
nizations can model their potential travel savings which
is a consulting engagement the Lab offers. Some of the
following companies cited here will remain anonymous.
25
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

ROI Study #1
Fortune 100 Financial Services Company - >$20 Billion in 2003 Revenue

Analysis done in 2004 with 2003 data — Company ended up not deploying a telepresence solution at the time

2003 Total travel spend excluding executive aviation: $95.6MM

2003 Total Spend by Expense Category ROI Analysis Assumptions

Expense Type Total For Exp Type 1) Seven Telepresence Systems at six company locations
Airfare $49,243,219.51 51% 2) Telepresence systems were leased over 48 months
Car Rental $4,072,464.34 4% 3) Unlimited usage at each endpoint
Lodging $29,664,622.59 31% 4) $18,232 was the average cost per telepresence system per month

Meals-Self Traveling $4,685,348.40 5% 5) Total T & E $1,727 USD per trip

6) 1,286 round trips per month
Taxi/Limo $7,983,438.54 8%
7) Green highlight is breakeven
$95,649,093.37

The analysis looked at inter-company travel between six key locations, including London, Sydney, New York and three additional
domestic locations. In 2003, the company made a total of 15,434 trips between these pairs of cities, with the top four pairs (all domestic)
accounting for 4,800, 3,057, 3,044 and 1,956 respectively. The fifth largest city pair was NYC-London, with 1,165 trips.

The company spent a total of $10.6MM on air travel for the top six destinations and $15.8MM on hotels. Trips to these locations
averaged 1,286 trips per month. An analysis of four variables — airfare, hotel, meals (self) and car rental/taxi/limo expenses — yielded a
fully-weighted average of $1,727 per employee, per trip.

The analysis did not examine: Cost of corporate aviation, productivity, tax advantages of leasing, or cost of executive time while in transit.

1286 TOTAL AVG. Monthly Total Annualized

Shifted # of TRAVEL COSTS TRAVEL COSTS % T&E T&E
% of travel Travelers Traditional Virtual Traditional Virtual Savings Savings Savings
1.0% 13 22,209 127,622 1,727 9,923.95 -475% (105,413) (1,264,953)
2.5% 32 55,523 127,622 1,727 3,969.58 -130% (72,099) (865,187)
3.8% 49 84,395 127,622 1,727 2611.57 -51% (43,227) (518,724)
5.0% 64 111,046 127,622 1,727 1984.79 -15% (16,576) (198,911)
5.8% 75 128,813 127,622 1,727 1711.03 1% 1,191 14,298
10.0% 129 222,092 127,622 1,727 992.40 43% 94,470 1,133,642
12.5% 161 277,615 127,622 1,727 793.92 54% 149,993 1,799,919
15.0% 193 333,138 127,622 1,727 661.60 62% 205,516 2,466,196
17.5% 225 388,661 127,622 1,727 567.08 67% 261,039 3,132,472
20.0% 257 444,184 127,622 1,727 496.20 71% 316,562 3,798,749
22.5% 289 499,707 127,622 1,727 441.06 74% 372,085 4,465,025
25.0% 322 555,231 127,622 1,727 396.96 77% 427,609 5,131,302
30.0% 386 666,277 127,622 1,727 330.80 81% 538,655 6,463,855

26

ROI Study #2
Pearson plc
Global 1000 Media Company
> $7.5 Billion in 2005 Revenue
ROI Analysis Conducted in 2002 with 2002 Data
Teliris GlobalTable Customer — Locations in New York City
and London at time of analysis
• Have since added additional rooms in London and New York
• Analysis looked at savings internal to corporate parent only and
not to subsidiaries.
• Analysis only looked at hard-dollar travel savings of specific
regularly scheduled transatlantic meetings
• Analysis did not consider: corporate aviation or productivity
• Executive time in transit was estimated at:
• Mid-level executives: $2,000 per day
• Senior Executives: $4,000 per day
Corporate Strategy Group Meetings
• Five members in the UK, Six in the US
• GlobalTable replaced three Meetings Every 2 Months
• $90,000 in savings every two months
• Business class flights, hotel, car service, dining, and executive
time in transit
Management Committee Meeting
• Four members in the UK, 3 in US
• Group moved from monthly in-person meetings to using
GlobalTable every other month and an in-person meeting on
alternate months.
• Approximate cost savings: $21,750 per meeting
• Business class flights, hotels, car service, dining, and executive
time in transit
Corporate Communications Meetings
• New York City based Director meeting with London team and
London investors
• Approximately 4 trips per month @ $7,250 per trip
Company’s estimated annualized savings for the single business
unit @ $2.1MM
The ROI of Telepresence and Effective Visual Collaboration
Company’s Self-Reported Additional Benefits: Justine Kanter, a
Management Development and HR Executive at Pearson, reports:
“I have been thinking a little about Global Table, after we spoke,
particularly as I went straight into a meeting with the US. There are
two important points to make I think:
1. Frequency of use continues to increase, on a wide scale. The
diary for bookings is full now, almost 2-3 weeks in advance. It is
becoming second nature for people to use it for the majority of
communication with the US, and that includes our main Pearson
Education offices in New Jersey, where people make the journey
to Manhattan without hesitation. The cost savings to all parts of
the business continue, particularly as people are placing increasing
importance on family life and reduced travel - all values very strongly
espoused by Marjorie Scardino [Pearson’s CEO]. David Bell [Director
and Chairman of Subsidiary] for example is doing less and less travel
at the moment and is therefore increasingly reliant on it.
2. It is not just about saving money on international travel. It is
also about getting smarter at: communication strategy collaboration
Marjorie recently announced a $50,000 prize for the best collabora-
tion at Pearson. Marjorie’s aim is to get Pearson people working
together across businesses to create new products, open new
markets and build working relationships with their colleagues. Our
businesses have more in common than they first thought. Obstacles
to collaboration soon fall away when you have tools such as Global
Table in place. We are now discussing strategic initiatives with people
in the business that previously were just email colleagues because
it is so simple. We are witnessing a massive culture change where
people are talking more openly to each other about their markets
and products, and not feeling in any way threatened by sharing
knowledge. Talking face to face with someone is very different from
sending memos and submitting reports. For example, the meeting I
went off to on Wednesday was with a group of us here at plc, The
Financial Times, and one of the HR Directors in Pearson Education
US. We have a very good relationship with all of them but previously
we would only communicate by email for standard business. We had
a brilliant 2 hour discussion about a key talent review, sharing joint
initiatives and looking at ways we could roll something out across the
whole of Pearson - that conversation would never have happened
previously and importantly, the initiative would never have been
developed. Finally there are an increasing number of positions being
taken by senior managers that require transatlantic collaboration
— Chairman of Penguin worldwide, Finance Director of Penguin
worldwide, Chief Collaboration Officer, and one person taking on
the role of President of Pearson Inc in the US and Communications
Director in the UK.This is not to say that these roles would not exist
without Global Table, but it is certainly a very good tool to help make
these positions work effectively.”
27
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

ROI Study #3
Fortune 500 Oil Company
• Airfare, hotel, car rental/car service
2004 ROI Analysis on 2003 Travel Data
• Analysis did not evaluate: corporate aviation expenses,
• Data from Jan. 1, 2003 — Sept. 30, 2003 only productivity, meals, enter tainment, or executive time in transit

• Analysis looked at top three city pairs only: Houston, London, • Total number of trips between top three city pairs in nine months:
and third Domestic U.S. Location 2,987 Est. 2003 Total: 3,982

• Nine-month spending on travel for top three city pairs: • Average Costs Per Trip: Airfare: $2,097 Car/Hotel: $681 Total Per
$3,192,338; Est. 2003 Total: $4.25MM Trip: $2778

The analysis did not examine: Cost of corporate aviation, productivity, tax advantages of leasing, or cost of executive time while in transit.

Monthly Components Annualized 6 Month

Combined
% Travel # # # TeleSuite Travel + Travel Shift Travel Shift Travel Shift
Trips Shifted Travel TeleSuite Meeting Travel TeleSuite Usage TeleSuite to TeleSuite to TeleSuite to TeleSuite
to TeleSuite Trips Meetings Hours Costs Site Costs Costs Costs Savings/Loss Savings/Loss Savings/Loss

0.0% 96 0 0 $266,667 $21,900 $0 $288,567 ($21,900) ($262,800) ($131,400)

5.0% 91 4 11 $253,333 $21,900 $1,782 $277,015 ($10,349) ($124,184) ($62,092)

10.0% 86 7 22 $240,000 $21,900 $3,564 $265,464 $1,203 $14,432 $7,216

15.0% 82 11 32 $226,667 $21,900 $5,346 $253,913 $12,754 $153,048 $76,524

20.0% 77 14 43 $213,333 $21,900 $7,128 $242,361 $24,305 $291,664 $145,832

25.0% 72 18 54 $200,000 $21,900 $8,910 $230,810 $35,857 $430,280 $215,140

30.0% 67 22 65 $186,667 $21,900 $10,692 $219,259 $47,408 $568,896 $284,448

35.0% 62 25 76 $173,333 $21,900 $12,474 $207,707 $58,959 $707,512 $353,756

40.0% 58 29 86 $160,000 $21,900 $14,256 $196,156 $70,511 $846,128 $423,064

45.0% 53 32 97 $146,667 $21,900 $16,038 $184,605 $82,062 $984,744 $492,372

50.0% 48 36 108 $133,333 $21,900 $17,820 $173,053 $93,613 $1,123,360 $561,680

55.0% 43 40 119 $120,000 $21,900 $19,602 $161,502 $105,165 $1,261,976 $630,988

60.0% 38 43 130 $106,667 $21,900 $21,384 $149,951 $116,716 $1,400,592 $700,296

Assumptions Company Travel Data

3 TeleSuite sites: London, Houston & 3rd City Average T&E per trip:
TeleSuite Systems Initially Capitalized — Not Leased Airfare: $2,097
Total # Travel Trips = Monthly company travel only between all 3 cities: 96 Car/Hotel per trip: $681
Total # Meeting Hours = Average meeting length: 3 Meals/Incidentals per trip: $0
Travel Costs = Average T&E per trip: $2,778 Total T&E Per Trip: $2,778
TeleSuite Site Costs = Monthly site for all 3 sites (fixed): $21,900
TeleSuite Usage Costs = Hourly rate per site: $75
(assumes 80% of meetings are 2-way, 20% are 3-way)

28

Summarized Hard and Soft Dollar ROI and Intangible Benefits
• Reduced Intra-company business travel — Quantifiable hard
dollar ROI
• Reduced Use of Executive Aircraft — Quantifiable hard
dollar ROI
• Productivity — Shortening decision times. Accelerating the
speed of business. Reducing time in transit and out of the office.
• Flexibility — The ability to hold meetings that would be
impossible in any other format due to the time limitations of
physical travel and/or the impossibility of being in two places
simultaneously.
• Cost Efficiency — The ability to bring more of the team to a
meeting that normally would have traveled.
• Knowledge Transfer & Management — Some telepresence envi-
ronments can be used to capture, stream, and archive content
(including both video and data) created in the environment.
• Time-to-Market Advantage — The ability to reduce the cycle
time to launch new product offerings and integrate them into
production.
• True Lease Tax Advantages — Many telepresence systems can
be leased with an equipment write-off tied to the lease term,
which can be shorter than IRS depreciation schedules, resulting
in larger tax deductions each year.
The Polycom RPX /Destiny Conferencing 210M seats ten participants and doubles as a traditional
conferencing/training room
The ROI of Telepresence and Effective Visual Collaboration
• Merger & Acquisition — Improving the M&A process by:
• Allowing the key executives from each team to be “right
down the hall” from their counterparts.
• Reduce the costs associated with M & A in hard-dollar travel,
lost productivity, and technical integration.
• Improve the knowledge and cultural transfer between the
organizations.
• Quality-of-Life — Business travel can be hard on personnel,
families, and the lower back.
• Relationship Management — The ability to meet face-to-face
and nurture important business relationships with board
members, clients, direct reports, vendors, shareholders, and the
media among others.
• Employee Health & Safety — The ability to do business in
regions that hold the threat of terrorism, war, or public health
emergencies.
• Disaster Preparation & Business Continuity — The ability to
effectively manage after a disaster or during restrictions of air
travel due to war or terrorism.
• Improved ROI from existing VTC investment — Many
telepresence solutions have been proven to improve the usage
and ROI of existing videoconferencing deployments by improving
the experience of connecting to legacy videoconferencing
systems and increasing their usage.
29
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Telepresence Buyers Guide
Understanding the Total Cost of Ownership
and Acquisition Scenarios
When an organization contemplates a telepresence solution,
it must first decide between purchasing an end-to-end managed
service (such as Destiny Conferencing’s TeleSuite, Polycom’s RPX,
the HP Halo Collaboration Studio, or the Teliris GlobalTable) or
building a custom integrated solution. The latter uses products
or bundled solutions from vendors such as ATK, Digital Video
Enterprises and Telanetix that require installation, networking, and
support from an internal conferencing / IT department or third-
party vendors. Solutions by Destiny Conferencing and Polycom
can be deployed as either end-to-end managed services or the
telepresence environments purchased outright and run on an
organization’s existing network. Since no single provider currently
offers a complete range of telepresence solutions, it is conceivable
that an organization might deploy a mix of vendors. Example:
• Six seat HP Halo Collaboration Studios for group collaboration
between offices and to connect with vendors, customers and/or
joint venture partners on the HP Halo Collaboration Network
• 21 or 36 Seat TeleSuite Distance Learning Environments for
training and large groups
• Digital Video Enterprises’ desktop Executive Telepresence System
in the offices of senior executive
For the sake of simplicity, we will break these options down
between End-to-End Managed Services and Custom Integration.
End-to-End Managed Services
Typically the end-to-end managed service providers break
their costs down into two components:
Upfront Costs: The telepresence systems themselves including
the environment and electronics, a site survey for each location
prior to installation, and the on-site installation of the system.
Recurring Costs: The IP network, 24 x7 concierge, help desk
and reservation services, and on-site equipment maintenance.
The HP Halo Collaboration Studio connected in a conference
30
I will add to the list a third component which I call:
Additional/Hidden Costs: These can include: acquisition
consulting, internal project management and training costs
and facilities (some facilities require significant modifications &
make-ready to accept a specific telepresence environment, such as
moving a vent, removing walls or repositioning a door.)
Custom Integration
Vendors such as HP Halo and Teliris do not let the buyer run
their products on an organization’s existing network or manage
them internally, but this is not a problem for companies like ATK,
Destiny Conferencing, Digital Video Enterprises, Polycom, and
Telanetix. Understanding the total cost of ownership for a custom
integrated solution is much more complicated to determine — the
costs can vary widely depending on a number of variables:
• Network Connectivity — Do you have the right type of network
and enough bandwidth for the application or will you need to
deploy an overlay network?
• Video Network Infrastructure — Do you require multi-point
capabilities and does that require additional video network
infrastructure to purchase and support?
• Custom Software Development — Do you want a simplified
interface to integrate collaborative tools, storing and archiving of
sessions, and/or streaming to the internet? Scheduling integration
with Outlook, Lotus Notes, and/or a company web portal?
Capitalize or Lease?
After determining the vendor and initial number of sites, an
organization will need to decide whether to capitalize the upfront
costs or lease the equipment. Leasing can provide tax advantages,
such as an accelerated depreciating schedule. HP offers a leasing
option on its $425,000 per room HP Halo Collaboration Studio
through HP Financial Services that wraps up the upfront costs,
including environment, electronics, site survey and on-site instal-
lation into a 48-month lease with a fair market value end-of-term
purchase option. When coupled with the recurring charges
for HVEN (HP’s network, concierge, and on-site maintenance
services), the cost of acquiring a Halo Collaboration Suite comes
in at a flat-rate cost of $27,500 per month, per room in a four-
studio scenario.
 The Future of Telepresence and Effective Visual Collaboration

The Future of Telepresence and Effective Visual Collaboration

Now that the end-user acceptance problems of visual collabo- with two-screens and two-cameras mounted in the center of the
ration have been solved and the early adopters are sharing their displays connect to a system with four screens and a camera
experiences with the benefits and ROI, telepresence appears to over each screen? How do you maintain lines of sight, directional
have a bright future indeed. HP and Polycom’s entry into the market audio, etc.?)
and Cisco’s impending entry announced in Newsweek in March
of 2006 is sure to attract the attention of other potential Global
2000 competitors (Sony and Tandberg are obvious candidates as
fast-followers) assuring more research and development resources
directed at the field. Let’s look at some of the trends that will be
driving the industry in the coming decade:

Effective Inter-Company Business

The ability for organizations to instantaneously and effec-
tively connect with vendors, investors, joint-venture partners and
customers globally, will revolutionize business in ways that can only
be speculated on at the dawn of this technology’s inception.

This level of interconnection will start slowly but accelerate

rapidly. Currently, fewer than 40 known companies have deployed
telepresence and effective visual collaboration group systems. These
companies have barely scratched the surface of the technology, but
already their benefits have been substantial, the ROI proven and
further adoption among their peers certain.

Telepresence vendor Teliris has already developed a security

feature for inter-company business called SecurePath NNI which
sets up a secure connection between disparate organizations on
the Teliris network. The connection must be approved by both
parties in a call and then the connection is torn down when the
call is completed.

As you look over the following list of publicly known telep-

resence customers, you will notice a bunch of individual islands
and island chains. These initial early adopters are using telepres-
ence internally, but the overwhelming majority cannot yet connect
to their key vendors, joint venture partners and customers. The
exception is HP Halo which has quickly built a network connecting
them to some of their key business partners, vendors, and
customers including most notably: DreamWorks and AMD which
the company has strategic relationships for on-going research and
product development. The ability for the employees of these orga- HP Halo’s GUI Simplifies Inter-company Calls
nizations to walk down the hall and effectively collaborate with
their partners globally is illustrative of the promise and potential
that telepresence offers. Now multiply this capability by 10, 100,
1000, or 10,000 companies world-wide to understand the implica- Eventually I see a standard (or de-facto standard) developing for
tions for the future of global business. inter-company business in the format of these systems. A baseline
format will be adopted that establishes a consistency-of-quality
Right now, however, because of networking and compatibility between the majority of telepresence systems with respect to:
issues the majority of the systems below cannot yet connect cultural proxemics, camera and display placement, communications
with the other telepresence systems not on their own networks. protocols, etc. for the overwhelming majority of inter-company
While it is technically possible to inter-connect the networks and interactions especially in the telepresence group systems and
pass IP traffic there are compatibility issues with multiple video distance learning classrooms. The stakes involved in being the first
compression standards, room scheduling and availability, and envi- company to set “the standard” are huge, so expect to see a knife
ronmental format (I.E. how does a telepresence group system fight at the speed of light between the vendors in this area.

31
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

Telepresence and Effective Visual Collaboration Networks Today

Publicly Announced Customers
Company Existing Locations Planned/On-Order Public/Private

Destiny Conferencing/TeleSuite — 100+ Sites — 50 Installed and 50+ On-Order —

3COM 4 sites Private
Accounting Firm 3 sites Private
AOL 9 sites 3-5 Private
CapitalOne 6 sites Private
Cigna 2 sites Private
Commercial Bank (Global) 4 sites Private
Commercial Products Manufacture 3 sites Private
Deloitte 8 sites Private
Destiny Conferencing 2 sites Public
Domestic Banking Company 2 sites Private
Duke University 3 sites Private
Global Bank 5 sites Private
Global Consulting Firm 10 sites Private
Global Consulting/IT Services 12 sites Private
Investment Bank 3 sites Private
Media/Television company 6 sites Private
PangeAir 2 site 50+* Public
Pharma 3 sites Private
PriceWaterhouseCoopers 7 sites Private
Private Equity Firm 2 sites Private
Public University 2 sites Private
University of Arizona 1 site Private
* Contingent on Funding

HP Halo Collaboration Studio — 60 Sites Deployed or On-Order

AIG Financial Products Corporation
AMD 2 sites 2 sites Private
BHP Billiton Private
DreamWorks 10 sites Private
HP 20 sites 3 sites Private
GE Commercial Finance Private
PepsiCo 5 sites Private
Novartis Private
A Consumer Products Company Private

MedPresence — 15 Operating Rooms & 10 Conference Rooms Deployed or On-Order

Arizona State University 1 site Private
Arizona Heart Institute 3-5 sites Private
Barrow Neurological Institute 3 site Private
Translational Genomics Research Institute 1 site Private

Polycom RPX — 10 Sites On-Order

Polycom 10 Sites Private
Waldorf=Astoria 1 site Public

Telanetix — 8 Sites Deployed and 5 On-Order

Film and Television Production Company 2 Sites Private
Investment Bank 2 Sites Private

Teliris — 110 Sites Deployed or On-Order

3i Private
BP 5 sites Private
GE Healthcare Private
GlaxoSmithKline 14 sites Private
Lazard Private
Pearson 4 sites Private
Royal Bank of Scotland Private
Teliris 2 site 10 sites Private
Vodaphone 5 sites Private
Xchanging Private
DDI Private
IT Managed Service Provider Private
Major Investment Bank Private
Large Pharma Private
Large manufacturer of mobile phone handsets and technologies Private
Major studio and content provider Private
Studio Private
Major investment bank Private
Major fortune 500 technology company Private
32 Management consultant firm Private

The Interconnection of Effective Visual
Collaboration Networks
Making logical and physical connections while maintaining
an acceptable quality of service across multiple high-bandwidth
IP networks is a difficult undertaking . . . at least for now. Technical
challenges aside, some solution vendors will resist the interconnection
of telepresence and effective visual collaboration networks. Vendors
will seek to leverage the value of connecting to the businesses, publicly
available locations and content headends on their own network by
closing it to all but paying customers. This will not last long. Their
own customers will demand connection between networks, making
interconnection the future of effective visual collaboration.
Publicly Available Telepresence Systems
While publicly available videoconferencing has failed to set the
world on fire, that’s not to say there isn’t a market opportunity
to connect business people around the globe in a comfortable,
productive and cost-effective manner. In fact, it is hard to imagine
another business opportunity where the existing alternative, global
physical business travel, produces as much real “pain” in hard-dollar
costs, lost productivity and the victimized lower back. Publicly available
videoconferencing has remained moribund largely because:
• The quality of the observant videoconferencing experience was/
is poor
• The costs were/are too high
• The majority of publicly available sites still use the limited bandwidth
and poor reliability of ISDN networks for connections
• Effective, easy-to-use collaborative tools remain essentially
non-existent.
• Public availability has never been the core business or received
much focus from the existing players with the most locations
(Kinkos and HQ Global Workplaces)
The medium also suffers from what I like to refer to as a
“lack of a business-class consistency-of-quality,” where virtually
every global publicly available videoconferencing room is different
than every other room in lighting, acoustics, camera angle, cultural
proxemics, etc.
Most interestingly, publicly available videoconferencing lives on
with an ad-hoc network of thousands of global locations that see
some use with the smart operators in the major metropolitan areas
conducting hundreds of conferences a year.These calls average $250
to $2,000+ per event for what is essentially the rental of a very
small physical space and $10,000 to $100,000 in easy-to-operate
equipment. It’s not hard to see how dramatically improving the
end-user experience, lowering the cost and getting the business
model right could supercharge usage.
David Allen, one of the co-founders of Destiny Conferencing/
TeleSuite, has started an affiliated company, PangeAir, with the goal of
launching a global network of public TeleSuite Systems in business-class
hotels and shared-tenant office buildings. The company has developed
The Future of Telepresence and Effective Visual Collaboration
a franchise business model and is currently seeking investors and fran-
chisees with a goal to launch with an initial 50 locations world-wide.
The Human Productivity Lab has also developed a business
model for publicly available telepresence, Powwow Virtual
Conferencing Centers, and is currently seeking partners and
investment. There are sure to be others.
I expect to see one or more of the telepresence group system
providers (Cisco, HP, Polycom, Teliris, etc.) getting into this business
for a number of reasons:
1. Public availability dramatically improves the utility of their
existing telepresence offering. For potential customers evaluating
a telepresence solution between Brand X that connects to some
number of Global Fortune 2000 companies OR Brand Y that
connects to some number of Global Fortune 2000 companies AND
a global network of publicly available locations that differentiator
could be substantial. Many corporate telepresence systems operate
at capacity, especially during peak hours. This dynamic will worsen as
the use of the technology for intra-company business grows. Having
an overflow capacity for corporate users will be attractive.
2. Public availability dramatically reduces cost-of-sales.
Demonstrating an effective visual collaboration environment is a
very expensive proposition even for the big boys. First you take
at least two environments out of production (that your other
employees and/or customers would like to use to run their
business), then you take away the sales person and sales manager’s
time. And to top it off, depending on the importance of the
prospect, you may take away some senior executives and product
managers as well. Public availability allows the companies to flip the
model around. Now you have prospective customers paying to
“try-it-before-they-buy-it.”
3. Global network of demonstration facilities that pay for
themselves with the ability to grow exponentially.
4. Profitable business in its own right — With the right
business model, it can be quite profitable to rent a 350-600 sq. ft.
space for several hundred dollars an hour with equipment leased
over a number of years.
Small Office/Home Office (SOHO) and
Consumer Telepresence
Two converging trends in the coming decade promise to
popularize telepresence for small/home business owners and
consumers:
• Fiber Optic Bandwidth to the Home — As I type these words,
I look out my window at two 1’ x 4’ patches of fresh sod left
by the Verizon sub-contractor who came through my neighbor-
hood in Northern Virginia last week and laid fiber optic cable for
Verizon Communications FiOS network. Each FiOS-connected
home has the theoretical capacity of 644 Mbps (or ~14 times
the capacity of the 45Mbps DS3 circuits used by some tele-
presence solutions), but Verizon limits the maximum available
33
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
bandwidth to 30Mbps download and 5Mbps upload, running
$179.95-$199.95 per month depending on delivery area. By
way of comparison, a full 45Mbps DS3 of best effort Internet
connectivity was ~$75,000 per month a decade ago. Expect the
dynamic of higher speeds and lower costs to continue.
• The commoditization of consumer IP videoconferencing
appliances and capabilities — Cisco Systems recently acquired
the country’s second largest set-top box maker, Scientific Atlanta,
for a record $6.9 billion. Evidently, Cisco viewed this acquisition
as strategic and critical, because the company went into debt
for the first time ever to do so, issuing $6.5 billion in bonds
to finance the purchase.xxiii With Cisco’s expertise in routing IP
packets, videoconferencing infrastructure, and its soon to be
released telepresence product line, it probably isn’t too much
of a stretch to assume that the Cisco/Scientific Atlanta set-top
box of the future could very well have an IP videoconferencing
capability built into it. While Cisco and Scientific Atlanta illustrate
the potential of the set top box, they will be competing with
the PC as the consumer videoconferencing platform of the
future. Cheap web cams and interactive consumer videocon-
ferencing capabilities already abound, often for free, in services
like MSN Messenger, Skype, WebEx and AOL Instant Messenger.
Traditional set-top videoconferencing provider Emblaze VCON
recently released a high-definition (720p) software-based video-
conferencing codec that brings to most modern PCs a superb
video quality and all the functionality to connect to traditional
videoconferencing endpoints for less than $150 plus $100-200
for a good camera. Expect the dynamic of higher quality and
lower costs to continue.
I expect the merging of low-cost, high-speed bandwidth at home
and low-cost, high-quality videoconferencing capabilities in PCs and
set-top boxes to popularize something akin to the traditional video-
conferencing experience first and then telepresence capabilities over
time. In many ways, the trend has already taken hold in PCs, though
quality has been moderate to poor. I expect quality to continue
to improve at the PC while I expect integration of higher-quality
consumer videoconferencing capabilities to become standard in mid-
to-high-end home theatre set ups in the coming years. Eventually
this will lead to consumer solutions that address the human
factors of participants and eventually a telepresence experience.
Some companies have already deployed videoconferencing capa-
bilities to senior executive’s homes to improve productivity and
for disaster recovery/business continuity. Wired Magazine reported
that Steven Spielberg wanted to extend the DreamWorks Virtual
Studio Collaboration’s telepresence capabilities to his home in the
Hamptons. With telepresence improving end-user acceptance and
the cost of the technology and bandwidth dropping, more and more
executives will have these capabilities in their home.
The Rise of the Virtual Organization
Where knowledge workers were once tethered to corporate
headquarters and regional offices by the need to be connected to
the company’s network and information resources, ubiquitous and
inexpensive broadband connectivity, secure virtual private networks,
34
VoIP, and effective collaborative tools like webconferencing are
making it possible to cut the ties that bind. According to a 2005
study from Nemertes Research, geographically dispersed workers
are on the rise, creating a more virtual work force. Nemertes
estimates that the number of virtual workers has increased by 800
percent within the last five years, with between 60 to 70 percent of
all employees working in locations different from their supervisors.
Telepresence’s ability to improve the communications between
executives, supervisors, remote workers and virtual employees but
still provide a natural humanistic interaction will only accelerate and
compliment this trend. The eventual public availability of telepres-
ence and effective visual collaboration solutions will also accelerate
this dynamic.
For many types of organizations where knowledge, information
and services are the only products, the advantages of the virtual
organization will be substantial.
• Investing in effective visual collaboration systems to connect
remote employees will be less expensive than owning/leasing/
maintaining brick and mortar facilities.
• Talent is no longer a function of geography (and/or cost-effective-
ness in the case of work than can be performed in lower-cost
geographies)
• Improved quality-of-life for former road warriors and commuters
• The ability to utilize talent that would be unavailable in a traditional
9-to-5 office environment given family, health, or travel restraints.
Better and Cheaper Telepresence Solutions
Expect better and cheaper systems over time as the costs
of the major components of telepresence solutions substantially
drop while the performance of those components dramatically
increases. Examples:
• Bandwidth — Bandwidth costs are dropping dramatically while
the capacity available to enterprise moves from T1 (1.54MBps)
and DS3 (45MBps) speeds to Gigabit Ethernet (1000MBps). As
more high-capacity fiber-optic submarine cables land around the
world, IP bandwidth becomes more abundant and less expensive
around the globe.
• Display Technology — DLP projection technology and flat screen
is enjoying a similar dynamic, with quality and screen size going
up as cost goes down.
• Codec Technology — Last year, 2005, saw the introduction of the
first video codec to offer high-definition quality at T1 (1.0 Mbps)
speed from LifeSize Communications, an increase in resolution of
10X over traditional set top videoconferencing systems. More HD
codec solutions are on the way from other vendors.
• Environments — Part of the high cost of engineered environ-
ments like HP Halo and TeleSuite is small production runs. Expect
the cost of engineered environments to come down with volume
and specialization.
 The Future of Telepresence and Effective Visual Collaboration

Distance Learning Will Become a Key Telepresence Application

In 1999, the Eller College of Management at the University of Arizona launched the world’s first MBA program taught via telepresence.
The course connected a professor and students in a telepresence classroom designed by TeleSuite (now Destiny Conferencing) in Tucson
with other MBA students in Santa Clara using a TeleSuite System the college would rent from 3COM, a TeleSuite customer, two nights per
week. The course was the only part-time option available in the Silicon Valley to get a Top 50 MBA.

The Eller College of Management’s distance learning telepresence classroom connected to a remote classroom in both lecture mode and face-to-face

The professor had the option of “stacking” the life-size virtual students on a video wall situated behind the local students in Tucson while
lecturing or utilizing a separate video wall in the front of the classroom to connect the virtual students and local students face-to-face for
discussions or collaborative case work. The program graduated three MBA classes using the technology and essentially broke even on the
cost of the equipment through the tuition it earned from students who wouldn’t otherwise have signed up.

In January 2006, MedPresence, an off-shoot of Destiny Conferencing (which utilizes the same core technology as the TeleSuite System
and Polycom’s RPX), unveiled a surgical education solution the company had developed with Barrow Neurological Institute in Phoenix,
Arizona and funded through the generosity of Karl Eller, an innovative telepresence investor and philanthropist.

The MedPresence Conference Room is a telepresence solution for surgical education, physician consultations, case reviews, and the
development of surgical tools and techniques. The system gives medical students, peer physicians and developers of surgical tools and
techniques the ability to be “present” in the neurological operating room at Barrows and interact in real-time with the institute’s world-class
surgeons and specialists during an operation.

MedPresence MCR 400 with Students MedPresence MOR 400 in an Operation

35
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Unlike the traditional telemedicine view of the localized area
of the operation, the MedPresence solution provides a panoramic
view of the entire operating theatre allowing remote participants
the ability to witness the complete scene: What equipment is
being used, the positioning of the surgical staff and the pace of the
procedure. The view of the localized area of the operation, the
view through the operating microscope, and medical informatics
and imagery can be delivered to outside panels on the 4’x16’
video wall or high-resolution displays mounted between each two
locations in the MedPresence Conference Room.
From the operating room, the surgeon can see and interact
with the students and remote par ticipants in real-time in
Artist’s Rendition of Destiny Conferencing’s design for a 36 seat distance learning TeleSuite System
Headends: Content will be King
Companies that have complex vendor/customer relationships
involving frequent direct interaction (such as instructor-lead training,
product certification or on-going consulting relationships) will help
drive inter-company visual collaboration. These content “headends”
will accelerate connections by allowing their customers (and
themselves) to reduce the expense of the relationship by connecting
directly for virtual training or consulting. Expect individual headends
to star t small, offering limited training, cer tification and/or audit/
consulting to support the telepresence early adopters. As more and
more headends offer more and more “content,” the network will
grow rapidly, and the utility of being connected to the network will
expand exponentially. The more Content Headends, the greater the
value of being connected to the network.
Examples of Existing and Potential Content Headends:
Potential Content Headends with Existing Telepresence
Capabilities in Green
IT Training / Certification
American Management Association
Cisco Systems — Product Certification
Sun Microsystems — Instructor lead training
36
whatever global city they happen to be located. MedPresence
has also developed a por table version of the conference room
that can be transpor ted to seminars, medical schools and
other hospitals allowing the surgeons at Barrow and future
MedPresence customers to share their specialized knowledge
around the world.
The ability to cost-effectively deliver this level of specialized
instruction and real-time interaction will revolutionize the delivery
of education globally. Corporations, with their need for both
internal training and training for customers, should prove to be
equally as enthusiastic about telepresence distance learning as
universities and medical schools.
Executive & Professional Continuing Education
The Wharton Business School — MBA for Executives
MIT — Professional Institute — Executive Continuing Education
Duke University — Fuqua School of Business MBA
University of Arizona — Eller College of Management MBA
Medical Education and Training
Barrow Neurological Institute — Surgical Education
Translational Genomics Research Institute — Genomics
Public Accountancy, Internal Audit, and Consulting
PriceWaterhouseCoopers
Ernst & Young
Deloitte & Touche
Capgemini
Accenture
BearingPoint
Wall Street — NASD Training & Complex Vendor Training and
Certification
Kaplan Financial-NASD Registered Representative and Principal
Training
Bloomberg — Market Data Systems Training and Certification
Reuters — Market Data Systems Training and Certification

Accelerated Adoption for Economic and
Geopolitical Reasons
Outsourcing
When most people think of outsourcing, the first thing that
comes to mind is the outsourcing of labor to lower cost geog-
raphies. While this trend will be accelerated by telepresence and
expand to more and more white-collar occupations, it is only half
of the outsourcing dynamic.
Management Guru Peter Drucker once recommended
outsourcing everything for which there is no career track
that could lead into senior management. This has been advice
of limited value because of the cost savings that the physical
proximity of employees has provided. The ability to effectively
collaborate with other firms, foreign and domestic, offering
specialized knowledge and ser vices will re-engineer and
vir tualize the corporation even fur ther.
“The inefficiency of knowledge workers is partly the
legacy of the 19th-century belief that a modern company
tries to do everything for itself. Now, thank God, we’ve
discovered outsourcing, but I would also say we don’t yet
really know how to do outsourcing well. Most look at
outsourcing from the point of view of cutting costs, which
I think is a delusion. What outsourcing does is greatly
improve the quality of the people who still work for you.
I believe you should outsource everything for which
there is no career track that could lead into senior
management. When you outsource to a total-quality-
control specialist, he is busy 48 weeks a year working for
you and a number of other clients on something he sees
as challenging. Whereas a total-quality-control person
employed by the company is busy six weeks a year and
the rest of the time is writing memoranda and looking for
projects. That’s why when you outsource you may actually
increase costs, but you also get better effectiveness.”
— Peter Drucker
In a March 2006 survey conducted by Patni, a technology
outsourcing company and reported on by UPI, 89 percent of U.S.,
British, and Asian corporate technology decision makers at their
annual conference expected to increase their outsourcing budget
in the next 12 months. Interestingly, the survey found that price was
not given as the most important factor in selecting an outsourcing
partner. The two most important factors were “cultural fit” and
“quality of service,” which were each chosen by 24 percent of
respondents. The ability to address these cultural and quality issues
through an effective collaborative experience is sure to improve
and accelerate the outsourcing paradigm.
The Future of Telepresence and Effective Visual Collaboration
The Higher Costs and Reduced Convenience of Physical Travel
For decades, commercial and executive aviation have provided
cost-effective transportation for business travel largely thanks to
relatively inexpensive jet fuel from relatively inexpensive crude oil.
From 1994—2004, the price for a barrel of NYMEX light sweet
crude averaged between $10 and $30 a barrel. Since 2004, the price
per barrel has more than doubled to $71.76 as of this writing (June
12th, 2006) and the price of jet fuel has risen from $0.82 a gallon
to $3.45 a gallon today.xxiv And it won’t stop there. A number of
potential geopolitical risks, natural disasters and resource economics
issues could very well send the price of oil even higher, making a
significant impact on the affordability and convenience of air travel.
The commercial aviation industry relies on cheap seats and full
planes. Reducing either side of this equation creates a vicious cycle for
the carriers. Rising fuel prices equals higher ticket prices, which reduces
demand for seats. Less passengers leads to even higher ticket prices
as carriers cover flying costs at reduced capacities. Higher ticket prices
leads to . . . reduced demand for seats. Dramatically more expensive
oil could deal another significant blow to the international aviation
industry, which saw five bankruptcies in 2005 and is still reeling from six
straight years of net losses, with 2006 set to be number seven.xxv The
International Air Transport Association recently raised its 2006 net loss
forecast to $3 billion from $2.2 billion, and a major increase in the
price of jet fuel would substantially increase these losses even further
and most likely see marginally profitable routes and flights eliminated
making air travel even less convenient.xxvi Additional airline bankrupt-
cies will inevitably lead to reduced competition, which equals higher
costs and less convenience.
The growth of telepresence and effective visual collaboration
will worsen this dynamic by further reducing demand for commercial
aviation among business travelers who are the airlines least price-
dependent customers. When Cigna deployed two TeleSuite Systems
between its offices in Philadelphia and Bloomfield, Conn., it eliminated
thousands of flights a year. Its ticket volume grew so low the company’s
US Air representative even called to inquire about the financial health
of the company.xxvii HP reported a two percent reduction in its
$800MM+ travel costs in Q4 2005, with less than half of its planned
deployment of 24 Halo Collaboration Studios active (no wonder the
company is considering doubling that number in the future).
37
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Dramatically Higher Oil Prices — Peak Oil, Expanded War in
the Middle East, Increased Terrorism, Natural Disaster or All
of the Above.
With high oil prices already wreaking havoc on commercial
aviation, it wouldn’t take many more increases in the price of oil to
deal a mortal blow to many carriers. A number of potential geopo-
litical events, natural disasters and the ongoing problem of global oil
field depletion could alone or together send oil over $100 per barrel.
Peak Oil
“Peak oil” refers to the long-term depletion of oil production
globally. Geophysicist Marion King Hubert first coined the term in
the 1950s as “Hubert’s Peak,” postulating that oil production in oil
fields, oil-producing countries and the world as a whole would all
follow a similar bell-shaped curve with rising production followed by
a production plateau, and then eventual depletion. In 1956, Hubert
predicted that conventional oilfield production in the United
States would peak in 1970, a position which earned him significant
scorn at the time but proved prophetic. Conventional U.S. oilfield
production (excluding off-shore, Alaska, deep-water, etc.) did peak
in 1971, and since then the U.S. has produced less oil and imported
more. In fact, the majority of oil-producing countries have seen
their oil production peak, including the majority of OPEC countries.
As fields dwindle, the global demand for oil is soaring. Growth has
averaged one to two percent a year as the third world continues
to industrialize. Peak oil theory has its skeptics, including this author,
but should the theory prove true, the adoption of telepresence
and effective visual collaboration would necessarily accelerate.
Natural Disasters
The Gulf of Mexico accounts for 27 percent of U.S. oil and
natural gas production, and the region contains 46 percent of U.S.
refining capacity.xxviii In 2005, Hurricanes Rita and Katrina destroyed
109 oil platforms and nine drilling rigs in the Gulf of Mexico, bringing
oil production in the region to a halt. Rigs, platforms and refineries
were secured and evacuated prior to and during each hurricane,
many of them staying off-line for months during repairs from the
damage they took. A hurricane season just as bad or worse could
also dramatically increase oil prices.xxix
38
Terrorism/Asymmetrical Warfare against Oil Production
The potential of terrorism and asymmetrical warfare against
oil production facilities also threatens oil prices. CIA analyst
Robert Baer has predicted in his book Sleeping with the Devil: How
Washington Sold our Soul for Saudi Crude that:
At the least, a moderate-to-severe attack on [Saudi
Arabian Oil Production Facility] Abqaiq would slow average
production there from 6.8 million barrels a day to roughly
a million barrels for the first two months post attack, a
loss equivalent to approximately one-third of America’s
current daily consumption of crude oil. Even as long as
seven months after an attack, Abqaiq output would still
be about 40 percent of pre-attack output, as much as four
million barrels below normal — roughly equal to what all
of the OPEC partners collectively took out of production
during the devastating 1973 embargo.
Indeed, Saudi Arabian security forces foiled an attack on
the Abqaiq facility in February this year when two separate cars
carrying explosives attempted to ram through a gate at the facility.
And this was only one of a number of attacks the kingdom saw
against oil industry related targets this year.
Oil facilities in Iraq have endured 298 recorded attacks since
June 2003. As of December 2005, Iraqi production averaged
around 1.9 million barrels per day, as compared with its January
2003 2.58 million barrels per day production rate.xxx
Expanded War in the Middle East
The specter of an expanded war in the Middle East looms
ominously on the horizon. Iran continues to defy the United States’
demands to halt its uranium enrichment activities and threatens
dollar hegemony by opening an oil bourse on the island of Kish to
trade oil in Euros. At this writing in early June 2006, two U.S. aircraft
carrier task forces are joining a third already in the region for what
many observers believe to be an imminent confrontation.
The gulf region contains 60 percent of the world’s known oil
reserves and 18 million barrels a day (representing about 40 percent
of internationally traded oil) must pass through the Strait of Hormuz,
which borders Iran and is 34 miles at its narrowest junction.xxxi The
Iranian military comes equipped with the Russian Sunburn anti-ship
missile, which flies over two times the speed of sound over a 100-
mile range and hugs the surface of the water to minimize its radar
signature.xxxii In early June 2006, Iranian Ayatollah Ali Khamenei publicly
threatened to disrupt oil supplies in the region with the following
statement: “If you [the United States] make a wrong move regarding
Iran, definitely the energy flow in this region will be seriously endangered.”
xxxiii
Should the conflict escalate, Iran has the ability to use the “oil
weapon,” not only restricting its own oil supplies but completely
shutting down oil shipments through the Persian Gulf. Energy
experts have predicted that such an action could double or triple
the price per barrel. Expanded war in the Middle East would likely
arouse increased terrorism directed towards U.S. airlines and citizens
abroad. This would result in tighter security at airports, imposing
additional costs in lost productivity and the potential reluctance of
key personnel to engage in business travel to certain regions.The net
result to both domestic and international business: Higher physical
travel costs in both ticket prices and lost productivity.
 The Future of Telepresence and Effective Visual Collaboration

The Decline of the Dollar • The U.S. deficit hit a record $805 Billion, or 6.4 percent of national
income, in 2005, a trend which shows no signs of slowingxl.
As of mid-May 2006, the dollar has declined 22 percent against Coupled with a ballooning national debt of $8.347 Trillion at this
a trade-weighted basket of seven currencies tracked by the Federal writing, a generally accepted deflation of the “housing bubble,”
Reserve since 2001, the biggest drop since the index was estab- and substantial increases in both the Producer Price Index and
lished in 1987.xxxiv The dollar has lost 7.1 percent of its value, versus the Consumer Price Index, there seems to be little positive
the Euro, and 6.2 percent of its value versus the yen since Dec. 31st, economic news that could possibly reverse this trend.
2005. The dollar seems poised for a further decline, fueled by a 72
percent increase in the money supply over six years to a record A declining dollar will help drive adoption of telepresence and
10.27 Trillion under the Greenspan Fedxxxv and a decision by the effective visual collaboration solutions in a number of ways:
central bank in March to simply quit publishing the total amount
of $USD in circulation (known as the M3) fueling inflationary fears • Telepresence and effective visual collaboration solutions in which
among $USD holders worldwide. The Organization for Economic the U.S. has competitive advantage will become less expensive in
Co-operation and Development (OECD), an economic forum of EMEA and Asia-Pac.
30 of the world’s leading market democracies, recently predicted
• The cost of travel will become more expensive as foreign oil
that the additional depreciation of the dollar could be ‘of the order
producers demand more dollars for their oil.
of one-third to one-half.’xxxvi A number of other factors seem to
suggest a coming decade of dollar weakness: • U.S. exports in general will become cheaper, stimulating foreign
trade, which can be conducted more effectively by telepresence
• Several foreign central banks have publicly reduced their dollar and effective visual collaboration.
reserves including: Sweden, India, Syria,Thailand, Indonesia,Taiwan
and China, while others including Japan and South Korea have • The cost of acquiring U.S. companies will be reduced, and telepres-
announced their interest in doing so.xxxvii ence and effective visual collaboration will become an attractive
option for foreign owners to manage their new U.S. assets.
• The Iranians are in the process of opening an oil bourse to be
denominated in “petroeuros” vs. “petrodollars,” which will further
weaken demand for the dollar among nations that have tradi- The End
tionally had to hold large $USD reserves to pay for oil imports.
Venezuela, China, India and Russia have all expressed support for
the boursexxxviii, and Russia President Vladimir Putin has proposed
starting a non-USD denominated bourse in Russia that would
trade oil in Rubles as well as publicly stated his desire to make
the Ruble an internationally convertible reserve currency.xxxix
Norway has also proposed a Euro-denominated oil bourse.

39
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
About the Author
Howard S. Lichtman (HSL) is a productivity-focused technologist
and consultant with specialties in telepresence and visual collabo-
ration, organizational and personal productivity and sales model
optimization. HSL served as Vice President of Business Development
at TeleSuite Corporation, the first commercially successful telepres-
ence provider and an innovator in visual collaboration.
Prior to TeleSuite, HSL co-founded and served as President
and Chief Product Officer of Powwow Networks, a visual collabo-
ration start-up looking to improve the human factors, effectiveness,
reliability and cost of both visual and data collaboration. Powwow
Networks developed an alpha product that combined IP video,
web conferencing and rear projection SMART Board interactive
whiteboards into templated collaboration environments delivered
as a flat-rate managed service with true QoS over disparate
IP networks.
40
Before he developed his interest in telepresence and visual
collaboration, HSL started and ran the financial vertical sales orga-
nization at Savvis Communications, which specialized in managed
networking and managed service solutions for trading floor
technology and market data applications for Wall Street. Holding
positions that included Regional Sales Manager, Director of Sales,
and National Sales Manager at Savvis, HSL opened outside sales
offices in New York, Boston, Herndon, San Francisco, Chicago,
Atlanta and Miami and managed multiple sales forces running
diverse sales models simultaneously.
During HSL’s tenure at Savvis, he founded the original
Human Productivity Lab, a skunk works that tested and
evaluated technologies and business process improvements
with the potential to improve productivity, accelerate the sales
cycle, or improve business communications within the organiza-
tion. Some of the technologies the Lab rolled into production
at Savvis included: Webconferencing, IP Videoconferencing,
SMART Board Interactive Whiteboards, Blackberry Messaging,
Franklin Covey Time Management, Collaboration Rooms,
Cordless Headsets, and The Demonstrator, a trade show
display designed by HSL to showcase SAVVIS’ solutions for
financial industry connectivity.
Prior to Savvis, HSL was a senior account manager at DIGEX
when the company was one of the first and fastest growing
private Internet Service Providers in the world. HSL has also
held a variety of sales, sales management, marketing, consulting,
and business development “gigs” at firms ranging from star t-
ups such as Spontaneous Networks, where the endeavor was
to develop a wire-speed data center vir tualization switch to
For tune 500 powerhouse SunGard, the global leader in infor-
mation availability.
Howard can be reached at HSL@HumanProductivityLab.com.
 About the Human Productivity Lab

About the Human Productivity Lab

The Human Productivity Lab is a consultancy specializing in
telepresence and visual collaboration, personal and organizational
productivity, and sales model optimization. The Lab was founded by
Howard S. Lichtman, a productivity-focused technologist who, while
running the financial vertical sales organization at a global internet-
working company, came to a number of important realizations:

• In high-growth and/or rapidly changing knowledge-centric organi-

zations, you can achieve faster growth (in sales, market share and
shareholder value) by investing in and improving the productivity
and business communication capabilities of your existing human
capital.

• Increasing the return on human capital is possible by leveraging

technology to improve your sales and knowledge workers
ability to find, access, understand, evaluate, act on, communicate,
disseminate and archive information.

• The most important and most often neglected element in The Lab’s website at www.HumanProductivityLab.com is currently
successfully implementing technology is the “Human Factor.” the #1 site on the Internet for news, research, and analysis on corporate
Failing to take it into account leads to wasted time, opportunity and organizational telepresence and currently averages over 350,000 hits
and treasure. per month from over 65 different countries with a growth rate of over 15
to 30 percent a month in 2006.
While unequivocally pro-technology, the Lab tempers its
enthusiasm by a firm understanding of technology’s limits, especially
with respect to the all-too-often neglected “Human Factors”
of implementation.

The Lab provides telepresence consulting services to vendors

and end users including: Telepresence Solution Design, Acquisition
Consulting, RFI/RFP Development, and Market Research among
other engagements.

In 2007 the Lab will be co-sponsoring TelePresence World

2007, a landmark series of CXO level conferences dedicated to
telepresence, presence, and unified communications. The Lab’s Newsletter
The Art of Productivity
www.TelePresenceWorld.com follows the telepresence
industry and provides news
The Lab is also seeking partners and investment for Powwow you can use to improve your
Virtual, its business model for publicly available telepresence. personal effectiveness

www.PowwowVirtual.com

The Lab’s Board of Advisors includes:

While Productivity is our Middle name,
Jeff Dalton — Regional CTO, Stewart Title we always put the Human First.
Brent Houlahan — Former CTO of NetSec and Vice President of
Managed Security Services at MCI
Contact Information
Thomas Jackson — CEO of Mission Benefits and former CEO of
Human Productivity Lab
TeleSuite
43861 Laurel Ridge Drive
Tim Nielsen — Vice President of Sales, Financial Vertical — Ashburn, VA 20147
SunGard
O (512) 828-7317
Chris Van Waters — CIO, QuadraMed F (480) 393-5435
LeMoyne Zacherl — CFO, Learning Tree International Info@HumanProductivityLab.com
www.HumanProductivityLab.com 41
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
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Bureau of Transportation Statistics Press Release — February 2nd
2006: http://www.bts.gov/press_releases/2006/dot018_06/html/
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The Practical Nomad: FAQ About Airline Bankruptcies http://www.
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FAA Aerospace Forecasts Fiscal Years 2006-2017, Page 30. http://
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2017/media/FAA%20Aerospace%20Forecast.pdf
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Travelocity Website http://www.travelocity.com — Costs were for
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Managing Conferencing Services for Success,Wainhouse Research,
July 2005, Page 9: http://www.wrplatinum.com/ bestanden/4121-
WP-ManagingConf4Success-v3.pdf
xii
A History of Videoconferencing Website: http://myhome.hanafos.
com/~soonjp/vchx.html
xiii
Presentation: Human Factors and Perception — Dr. Oliver Staadt,
Department of Computer Science; University of California,
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VR_Human_Factors.pdf
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The Vision Thing: Mainly in the Brain, DISCOVER Vol. 14 No. 06 |
June 1993 | Biology & Medicine : http://www.discover.com/issues/
jun-93/features/thevisionthingma227/
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Ibid
xii
Birdwhistell, RL Kinesics and context; essays on body motion commu-
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xiii
Wellens, A. Rodney. 1978. “A Device that Provides an Eye-to-Eye
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xiv
Gale, Anthony; Kingsley, Eliot; Brookes, Sorrel; and Smith, David.
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Female Under Different Conditions of Eye Contact.” Behavioral
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xv
Kendon, A. 1967. “Some Functions of Gaze Direction in Social
Interaction.” Acta Psychologica. 26: 22-63.
xvi
Argyle, Michael, and Cook, Mark. Gaze and Mutual Gaze. 1976.
New York: Cambridge University Press.
42
xvii
Aguinis, Herman; Simonsen, Melissa M.; and Pierce, Charles
A. 1998. “Effects of Nonverbal Behavior on Perceptions of
Power Bases.” Journal of Social Psychology 138, no.4 (August):
455 469.
xviii
Kleinke, Chris L.; Staneski, Richard A.; and Berger, Dale E. 1975.
“Evaluation of an Interviewer as a Function of Interviewer
Gaze, Reinforcement of Subject Gaze, and Interviewer
Attractiveness.” Journal of Personality and Social Psychology
1 (Januar y 31): 115 122.
xix
Hornik, Jacob. 1987. “The Effect of Touch and Gaze Upon
Compliance and Interest of Interviewees.” Journal of Social
Psychology 127, no.6 (December): 681 683.
xx
Droney, Joylin M., and Brooks, Charles I. 1993. “Attributions of
Self Esteem as a Function of Duration of Eye Contact.” Journal
of Social Psychology 133, no.5 (October): 715 755.
xxi
The Brain Sees What We Don’t, Live Science, November 1st,
2005: http://www.livescience.com/humanbiology/051101_
blindsight.html
xxii
Hewlett-Packard’s new Halo video-conferencing system brings
people face-to-face from a world apart, but price tag poses
hurdle, San Diego Union-Tribune, April 7th, 2006
xxiii
Latest Acquisition Gives Cisco Entree to Consumer Market By
BOBBY WHITE
February 28, 2006; Page B1
http://newsroom.cisco.com/dlls/tln/exec_team/giancarlo/pdf/
latest_acquisition_gives_cisco.pdf.
xxiv
ABC News Story: Higher Fuel Prices Mean Higher Airfares,
May 7th, 2006 Found at: http://www.abcnews.go.com/WNT/
story?id=1934560&page=1
xxv
Oil price surge may delay airline recovery, Business Week On-
line June 5th, 2007.
xxvi
Ibid
xxvii
Author’s conversation with Linda Dykas, Cigna’s corporate
travel manager in 2003.
xxviii
Ready for the Hurricanes? By Rober t Aronen June 9,
2006 Motley Fool http://www.fool.com/News/mft/2006/
mft06060922.htm
xxix
Hurricanes Destroyed 109 Oil Platforms: US Government, Oct.
4th 2005, Agence France-Presse
http://www.terradaily.com/news/energy-tech-05zzzzzzp.html
xxx
Institute for the Analysis of Global Security, http://www.iags.
org/iraqpipelinewatch.htm

xxxi
Facing Iran’s Challenge: Safeguarding Oil Exports from the
Persian Gulf, Policy Watch — The Washington Institute for Near
East Policy, June 7th 2006: http://www.washingtoninstitute.org/
templateC05.php?CID=2477
xxxii
The Sunburn - Iran’s Awesome Nuclear Anti-Ship Missile, By
Mark Gaffney 11-2-4 - http://www.indiemediamagazine.com/
article.php?story=20050118055547492
xxxiii
Teheran hints it may use oil weapon in nuclear row,
The Standard- Monday June 5th, 2006 - http://www.
thestandard.com.hk/news_detail.asp?pp_cat=17&ar t_
id=20121&sid=8267065&con_type=1
xxxiv
Bush’s Bond Market Favors Borrowers; Clinton’s Rewarded
Traders May 22, 2006, Bloomberg: http://www.bloomberg.com/
apps/news?pid=10000087&sid=agpZpPfkNMZM&refer=top_
world_news
xxxv
Central Bankers’ Worst Nightmare - the Gold and Bond
Vigilantes, by Gary Dorsch, May 9th 2006: http://www.safehaven.
com/article-5131.htm
xxxvi
OECD Warns that the rebalancing of the US deficit may drive
dollar down sharply, Forbes.com, May 23rd, 2006: http://www.
forbes.com/finance/feeds/afx/2006/05/23/afx2765701.html
Artist Rendering of the upcoming 4th generation Teliris display system
Bibliography
xxxvii
Dollar catching Asian flu By Alan Boyd, March 11th, 2006 http://
atimes01.atimes.com/atimes/Asian_Economy/GC11Dk01.html
xxxviii
The Greenback’s long downward spiral by Mike Whitney, May 4th
2006: http://www.opednews.com/articles/opedne_mike_whi_
060504_the_greenback_92s_long.htm
xxxix
Collapse of the petrodollar looming by Dave Kimble, May 18th,
2006 http://www.energybulletin.net/16110.html
xl
US deficit data fuel anxieties on dollar, By Christopher Swann, The
Financial Times Published: March 14 2006 http://news.ft.com/
cms/s/db63450e-b383-11da-89c7-0000779e2340.html
Hubbert peak graph from public domain document “Strategic
Significance of America’s Oil Shale Resource Volume I Assessment
of Strategic Issues” at http://www.fe.doe.gov/programs/ reserves/
publications/Pubs-NPR/npr_strategic_significancev1.pdf
Oil Prices 1994 — 2006 Price Graph — Wikipedia Entry: Petroleum
http://en.wikipedia.org/wiki/Crude_oil
43
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Telepresence Company Profiles
Company/Division: AudioTek /ATK Services
Website: www.atkservices.com
Company Founded: 1983
2005 Revenue: N/A
Public / Private: Private
Key Executives:
Mike Stahl, President
Duncan Foster, Vice President, Sales and Development
Best know for providing the sound for such complex produc-
tions as every SuperBowl since 1998, the Academy Awards,
The Emmy Awards, The Grammys and the Olympics, AudioTek
Corporation has more on its plate than mega events. The
company’s ATK Services division handles complex AV integration
projects such as wiring every Apple Computer store in the US
for voice, video, and data. The company has recently produced
the first turnkey small group (1-4) Telepresence solution to use
Digital Video Enterprises’ true-eye contact display technology and
Intelligent Switched Telepresence control system, both of which
ATK helped develop.
The Intelligent Switched Telepresence control system gives
each participant a small microphone/control unit installed under
the lip of the table, allowing a user in a multi-site conference to take
“the conch” —and push a single button that switches the focus of
all remote sites to that participant after a quick screen fade. The
system temporarily presents a wide shot of the table while the
close shot of the designated speaker is acquired.
The company’s I VISION direct telepresence experience
marries the following technology and capabilities:
• Digital Video Enterprises 50” true eye-contact display, which
hides two Sony BRC 300 three chip cameras behind the display
at eye-level
• The Sony G 70 codec, capable of a 4MBps video stream (other
codecs can be used)
• AMX Control System with media archiving capability, total room
control for lighting, shades and conference set up
• Ceiling mounted high resolution document camera with laser
alignment.
• 61” data collaboration Plasma display
The I VISION starts at $165,000 and will fit into most
conference rooms without any make-ready other than appropriate
bandwidth.
44
HSL’s Analysis
The ATK I VISION is the first small group (1-4) telepresence
solution that utilizes the Digital Video Enterprises true eye-contact
display technology and intelligent switched presence. The intelligent
switched presence experience is like watching a live broadcast
TV show with dynamic scene switching between participants. The
company’s turnkey solution utilizes the Sony G70 codec to produce
exceptional video quality for a non-HD system, and can accept other
codecs or retro fit an existing deployment of traditional videocon-
ferencing systems to improve the human factors, ease-of-use and
collaboration.Though I was unable to experience an actual call when
I visited the facility, I liked the ceiling-mounted document camera
with a high magnification for collaborating on documents or physical
objects such as circuit boards between remote locations. ATK had
also done good work tying the multiple devices together into an
easy-to-use AMX touch-sensitive control unit.
Company: Destiny Conferencing/TeleSuite
Company Website: www.destinyconferencing.com
Company Founded: 2005
Employees Dedicated To Visual Collaboration: 30
2005 Revenue: N/A
Public/Private: Private
Key Executives:
David Allen, Chief Executive Officer
Scott Allen, President
Ted Carter, Chief Operating Officer
Rob Whatley, Director of Customer Service
In 1993, hotel developers David Allen and Herold Williams
founded TeleSuite, the first commercially-successful telepres-
ence provider, after failing to find a traditional videoconferencing
solution good enough to keep their well-heeled guests from
leaving their Caribbean resort early for business meetings in less
exotic locations. Initially founded as an R&D shop the company
built early TeleSuite Systems from Styrofoam and duct tape to
understand the geometries of getting the environment right, the
company shipped its first commercial TeleSuite Systems in 1997.
The company has benefited from strong support from visionary
telepresence investor Karl Eller, the founder of Eller Outdoor
Media and former Chairman and CEO of Circle K.
In 2003, a board of directors’ dispute took management away
from the co-founders and the company foundered, laying off a
number of staff in 2004. The company’s assets were sold back to co-
founder David Allen (Herold Williams is no longer with the company)
and the company was re-organized in 2005 as Destiny Conferencing.
As Destiny Conferencing, the company struck a strategic partnership
and manufacturing agreement with Polycom in May 2006 whereby
Polycom specifies and private label OEM’s six TeleSuite based
Systems under the Polycom RealPresence Experience (RPX) brand.

Polycom RPX customers will also have the option of
purchasing a Polycom branded and specified RPX VNOC and
Circuit Ser vices IP network and concierge/help desk services
from Destiny. This network enables and connection and collabo-
ration with the company’s existing network of For tune 1000
customers, which include PricewaterhouseCoopers, AOL and
Cigna among others.
Through an affiliated company, MedPresence, Destiny also
manufactures a telepresence solution for surgical education.
Another affiliated company, PangeAir LLC, is working on launching
a global network of publicly-available TeleSuite Systems in business
class hotels and multi-tenant office buildings.
TeleSuite Systems are free-standing, modular, engineered
telepresence environments that are deployed as a “room-within-
a-room” and can be moved if required. The environments range
in size from four participants facing a 4’x8’ video wall starting at
$249,000 to 36-seat distance learning environments where partici-
pants sit in tiered seating and face a 5’x20’ video wall. $559,000
Destiny Conferencing’s network and concierge/help desk
services start at $5,950 per month for the two screen 200 series
and $8,950 per month for the four screen 400 series.
To avoid repetition, please find the technical specifications of the
TeleSuite System on page 49 in the write-up on the Polycom RPX.
HSL’s Analysis
The TeleSuite System (including the Polycom RPX models)
with their rear-projection semi-seamless video walls provide
the most immersive experience of the major group telepres-
ence systems providers. However, they lack the video quality
achieved by its main competitors, HP and Teliris, who throw
45MB of bandwidth at each location. Still, the ability to deliver
effective telepresence environments at more cost-effective T1/
E1 speeds is an attractive proposition for those organizations
that can’t afford the operating costs of systems requiring 45MB
of bandwidth.
The company’s large distance education environments
are a strong differentiator from the rest of the pack, and the
system has proven itself through its use at the Eller College
of Management at the University of Arizona, graduating
three remote MBA classes. As telepresence continues to gain
acceptance, I expect that other universities and corporations
will take the plunge; eventually creating a network of “content”
that will allow organizations to access specialized instruction
from around the world. With the Eller College of Management,
Duke’s Fuqua Business School and the Barrow Neurological
Institute already on the network, Destiny seems ideally situated
to benefit as telepresence goes mainstream.
Destiny’s strategic partnership with Polycom is the most
exciting news from the company in quite some time, a grand slam
home run for the boys from Dayton. While it remains to be seen
how many prospective customers will choose to buy the equivalent
Telepresence Company Profiles
solution from Destiny that can be purchased from Polycom, the
company can’t help but benefit as Polycom drives the growth of
compatible telepresence environments. I see the Polycom partner-
ship providing a number of pluses:
• Further legitimizes telepresence (HP and Cisco got the ball rolling
nicely in 2006, but Polycom’s entry into the industry is sure to
accelerate “mainstreaming”).
• Provides much needed technical expertise in IP video/audio
and video network/infrastructure management, scheduling and
reservation systems, and data collaboration tools (areas that
have been a weakness at the company).
• Marketing and distribution muscle (another historic TeleSuite
weakness) that should be able to nicely leverage Polycom’s
tier-one marketing organization, sales force, and international
network of resellers and channel partners.
• Transparency and Viability — After years of watching the big ones
get away because so many potential customers were hesitant to
bet on financially shaky, privately-held TeleSuite, Polycom provide
a level of comfort with public and audited financials and a stability
that TeleSuite had lacked.
Company: Digital Video Enterprises
Website: www.dvetelepresence.com
Company Founded: 1999
Employees Dedicated To Visual Collaboration: Two
2005 Revenue: N/A
Public / Private: Private
Key Executives:
Jeff Machtig, Co-founder
Dr. Steve McNelley, Co-founder
Digital Video Enterprises (DVE) is small, privately held
corporation specializing in telepresence solutions that provide
true eye-contact between participants and holographic displays
for telepresence, marketing and virtual reality applications. The
company was founded in 1995 as Videotronic Systems, a partner-
ship between Jeff Machtig, an optics and special effects inventor,
and Dr. Steve McNelley, a psychologist whose doctoral work
and career has been focused on the importance of eye-contact
in human communications. DVE holds 11 patents (with several
pending) in various aspects of true eye contact videoconferencing
and telepresence.
The company’s product line falls into two categories:
True Eye-Contact Telepresence and Display Solutions — The
company makes a variety of display and bundled solutions that use
45
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
eye-level cameras behind a piece of silvered glass known as a beam
splitter. With the camera hidden from view, the image of the remote
participant is reflected off the beam splitter from an upward-facing
flat screen display, allowing natural eye-contact between partici-
pants.
DVE’s true eye-contact display solutions are available in a
variety of formats:
• Immersive Group Systems —DVE has a number of designs for
immersive group systems with true eye contact and multiple
camera arrays that work with six to eight participants.
• Small Group Roll-About Systems — One to four participants
with a locking cabinet that rolls through a standard 30” door.
The DVE Telepresence 50 can upgrade an existing deployment or
improve a planned deployment of traditional videoconferencing
end-points.
• Personal/Executive Systems — The DVE Eye-Contact Silhouette
provides a dedicated eye-contact display solution for the desktop,
allowing a user’s computer monitor to remain dedicated to data
collaboration.The Executive Telepresence Solution (ETS) provides
a life-size, eye-contact experience in a small footprint, mobile
lockable cabinet for an executive’s office or small conference
room.
Telepresence Podiums and Holographic Displays
DVE makes a number of specialty solutions, including:
• Telepresence Podium —Projects a life-size image of a remote
presenter as if he or she is standing at a podium. The podium
itself has a camera that allows the remote presenter to see the
room he is presenting to; in turn, the remote audience can see
the presenter’s demeanor and gestures clearly.
• Virtual Observer — A portable production studio for distance learning
and training that tracks and captures stand-up presentations.
• Transparent Telepresence Display —Presents floating 3-D objects
in addition to remote participants for marketing purposes.
HSL’s Analysis
Digital Video Enterprises remains the undiscovered jewel of
the telepresence industry. Its displays are the only true eye contact
solutions on the market, making them especially powerful in one-
on-one conferences. The rest of its product line provides several
other advantages as well, including:
• The DVE Telepresence 50 can immediately improve existing deploy-
ments of traditional videoconferencing systems by providing true
eye contact, hiding the camera and enhancing image quality by
improving image contrast.
• In my opinion, the DVE Executive Telepresence System (ETS)
offers the highest quality experience currently available in a
46
personal/executive system. With a 40” true eye-contact display
and LifeSize Communications’ camera and codec bundled into
a turnkey package, the ETS lets life-size remote participants talk
with true eye contact in high-definition.
• The company’s Telepresence Podium works uniquely well for
remote presenters. I believe that the Telepresence Podium’s
ability to project a life-like virtual speaker into a venue (or
multiple venues simultaneously) anywhere in the world will be
an attractive option that will catch on over time as telepresence
continues to gain acceptance and visibility.
The downside to Digital Video Enterprises’ solutions: their
cost relative to the current expectations of the market especially
in the executive systems. The company’s size keeps its production
runs small, which means that it’s most affordable desktop display
solution, the $7,500 Silhouette, can’t be ordered in increments less
than 15, so customers wanting one to fourteen units have to get on
a waiting list. However, the company’s current strategy is to focus
on the new Executive Telepresence System, which creates real size
images of conferees in your office. Having been released less than
three weeks ago at this writing, the ETS is currently being deployed
around the globe with no minimum order needed.
The company also has a demonstration problem. Like telepres-
ence group systems, eye-contact telepresence is an experience; getting
experienced is hard to do unless you visit a DVE customer, and most
movie studios, investment banks, etc. don’t exactly let folks walk in
off the street. Most prospects have to travel to the company’s R&D
facility in Irvine, California. This will continue to hinder adoption until
the company develops a strategy or partnership to make convenient
demonstration units available around the world.
Company/Division: Hewlett-Packard/Halo Collaboration
Division Website: http://www.hp.com/halo
Division Founded: 2003
Employees Dedicated To Visual Collaboration: N/A
2005 Revenue: $86.70B
Public / Private: Public (NYSE: HPQ)
Key Executives:
Vyomesh Joshi, Executive Vice President, Imaging and Printing
Group (IPG)
Steve Nigro, Senior Vice President and General Manager,
Graphics and Imaging Business (GIB)
Ken Crangle, General Manager, Graphics and Imaging Business (GIB)
Ray Siuta, Marketing Manager, Halo Collaboration Solutions

With $86.6 billion in 2005 sales and $2.39 billion in net income,
Hewlett-Packard is better known for its ubiquitous printers, multi-
function machines, personal computers and network servers
than visual collaboration. For now. The company teamed up with
DreamWorks in late 2003 to perfect and take to market a visual
collaboration system the studio designed to help it produce
animated films between its multiple campuses and partners.
The HP Halo Collaboration Studio launched in December 2005
and has quickly built a strong network of Fortune 500 customers,
including: AIG Financial Products, AMD, BHP Billiton, DreamWorks,
General Electric Commercial Finance, PepsiCo and Novartis.
At 17’x21’, the HP Halo Collaboration Studio seats six
primary par ticipants, with a secondary row of bench seats that
can comfortably accommodate up to an additional six. The
participants face three 50-inch plasma displays, each of which
display up to two remote par ticipants in site-to-site call or up
to four par ticipants per screen in a multi-point call and a fourth
screen for data collaboration.
HP Halo Collaboration Studios include:
• DVD quality, MPEG-2 codecs with professional grade 16”x9”
cameras
• High-resolution document camera, HD collaboration display with
high-bandwidth VGA connections to the collaborative PC and
participant laptops
• Life-sized multi-point (up to four locations) with no perceived
delay between inter-continental locations.
• Power and network connections at each position
• Site survey and on-site installation
This engineered environment precisely positions cameras,
displays, and the table down to millimeter tolerances and achieves
a superb “consistency-of-quality” between studios with studio-
quality acoustics and lighting.
The cost of Halo varies depending on the number of studios
purchased. In smaller quantities, the rooms are approximately
$425,000 each, and pricing falls the more rooms you buy. In the
United States and most global business centers, the network and
service fee is $18,000 monthly per room, which can varies in other
countries depending on local telecommunications costs. HP offers
several lease options through its HP Financial Services subsidiary.
The monthly fees cover:
• HVEN ( Halo Video Exchange Network ) HP’s private, secure
high—bandwidth, full duplex, QoS IP network
Telepresence Company Profiles
• 24x7 concierge-class connection support and help desk
support
• Proactive monitoring, remote diagnostics and management,
on-site equipment maintenance
HSL’s Analysis
I give HP a tremendous amount of credit for being the first
Fortune 500 company to realize the importance, potential and
profit opportunity of effective visual collaboration and getting
themselves into the big game. While this first-generation system is
definitely pricey, HP appears to be doing more R&D than anyone
else in the industry. The company has recently tripled the size of its
telepresence lab in Corvallis, Oregon, and boasts a tier-one team of
Halo-devoted technologists. I was especially impressed with Mark
Gorzynski, Halo’s Chief Scientist. Future collaborative formats from
HP promise to address other spaces and sizes to compliment the
growing network of Halo Studios.
The Halo Studio itself is a superb first effort. The look and
feel of the room is warm and inviting. Though engineered, the
environment conveys a natural experience with an excellent
consistency-of-quality between all locations on the Halo Network.
Also, the simple interface and ease-of-use of the collaborative tools
outshines those of rival environment providers.
But the company’s strongest asset is its growing network of
Fortune 500 companies using Halo — 60 locations installed or
under construction (23 at HP and 10 at DreamWorks). Between
HP itself and PepsiCo (with 16 brands that each do over one billion
dollars in business ) alone, it is a good bet that executives from
vendors and partners will see real value in being “right down the
hall” and collaborating in real time.
However, as virtually every other analyst has said of Halo, the
price presents a barrier. For large, geographically-dispersed Fortune
500 companies I believe that the ROI is definitely there. But as you
go farther down the Fortune 2000 ladder, the cost gets harder and
harder to justify, especially for the limited capabilities of version
one. To HP’s credit, however, it’s rolling out a free upgrade to their
initial customer that fixes the lack of multi-point capabilities. As
a standard business practice, HP retrofits its customer base with
new services and capabilities such as multi-point, as they become
available. These enhancements come at no extra charge beyond
the monthly service fee. Hopefully the company will introduce
backwards compatibility with traditional videoconferencing and
high-definition as well. Versions two and three will present the real
tests for HP, but if the company shows the same innovation it’s
already displayed in so many aspects of its other businesses, its
early adopter customers likely won’t mind having kicked in a little
extra to help the effort.
47
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Company: MedPresence
Company Website: www.MedPresence.com
Company Founded: 2005
Employees Dedicated To Visual Collaboration: N/A
2005 Revenue: N/A
Public / Private: Private
Key Executives:
David Allen, Chief Executive Officer
Brian Kinne, President
MedPresence is a spin-off of Destiny Conferencing/TeleSuite,
which worked with a team of neurosurgeons at Barrow Neurological
Institute in Phoenix, Arizona to design a telepresence solution for
surgical education. The team at Barrow included world-renowned
neurosurgeon Dr. Robert Spetzler, the director of the institute,
and Drs. Stephen Papadopoulos and Shahram “Shez” Partovi, with
substantial funding by telepresence/MedPresence investor Karl Eller
as a gift to Barrow, whose work he has long supported.
Unlike traditional telemedicine solutions that focus primarily on
displaying the local area of the operation, MedPresence connects
one of its telepresence conference rooms to its solution for the
operating room giving participants a panoramic view of the entire
procedure and the surgeon a view of and interaction with the
conference room. Medical students, peer physicians and medical
solution partners can view the equipment being used, the pace of
the procedure and even the demeanor of the participants. Each user
views the operating room via a 4’x16’ video wall with the local view
of the operation and medical imagery/informatics displays on high-
resolution monitors between every two positions in the conference
room and/or the outer two panels of the video wall.
MedPresence has also developed a mobile unit with a 4’x8’
video wall that deploys from an integrated shipping crate. The
mobile unit can be shipped to a medical school, teaching hospital
or surgical conference and then hooked up to an appropriate
IP network, where it can then be connected to a MedPresence
Operating Room(s) or Conference Room(s) for surgical education,
consultations or routine medical check ups globally.
The MedPresence solution consists of three components:
• MedPresence Conference Room (MCR 400) — With seating
options ranging from four ($250,000) to 28 ($599,000)
• MedPresence Operating Room (MOR 400) — With options for
a stainless steel portable unit to a rear projection video wall, the
cost of the MOR 400 ranges from ($250,000) to ($449,000)
• MedPresence Mobile Unit (MM 200) — The MM200 comes
complete with a mini-conference table with embedded monitors
and a 4’x8’ video wall that collapses into its own shipping
crate ($200,000).
48
MedPresence’s IP network and concierge/help desk services
start at $5,750 per month for the two-screen 200 series and
$8,500 per month for the four-screen 400 series.
The technical specifications of the MedPresence Conference
Room, Operating Room and Mobile unit can be found in detail in
the company write-ups for Destiny Conferencing and the Polycom
RPX on pages 44 and 49, respectively (they share the same video
codec and audio platform), so I will focus on details specific to the
MedPresence version. The MedPresence solution delivers medical
informatics into the environment, including operating microscopes,
X-Ray/CAT scan imagery, patient history, physician notes, anesthe-
siology data and basically any other diagnostic data being used in
the operating room, all under the umbrella of an integrated medical
informatics platform.
HSL’s Analysis
I had the opportunity to attend the public unveiling of the
MedPresence solution at Barrow in January and observed both a
spinal cord surgery and brain surgery conducted by Dr. Spetzler
from the MedPresence Conference Room. I’m still amazed at the
experience to this day. The good folks at Barrow were kind enough
to let me and the Lab’s videographer to scrub up and enter the
operating room during the spinal cord procedure to understand and
document the interaction the operating room has with the remote
sites during an operation. (Our video is available at the Lab’s website:
http://www.humanproductivitylab.com/video/barrow_video.php).
I was also able to spend time with Drs. Papadopoulos and
Partovi, who explained the revolution this capability brings to both
surgical education and the ability for Barrow, with its very rare
and specialized institutional knowledge, to assist globally in delicate
operations where life, mobility and/or brain function could be
riding on the outcome.
With a MedPresence solution already installed at the
Translational Genomics Research Institute (TGen) and the company
reporting 14 operating rooms and eight conference rooms on order
from a variety of institutions, including the Arizona Heart Institute
and Arizona State University, it appears this capability will spread
rapidly among the approximately 2,500 teaching hospitals globally.
The medical community is poised to be the first to create a strong
network of “content” available, with instruction from Barrow in
Neurological Surgical Education and Genomics expertise from TGen
already on-tap. It appears that other institutions with expertise in
cardiology, orthopedics, oncology, pediatric surgery, etc. will soon
join in creating a growing network where world-class expertise in a
variety of disciplines can quickly be accessed and shared. Universities
with medical schools will have the ability to utilize their MedPresence
conference rooms in other fields and departments so they can share
knowledge and instruction across a wide spectrum of disciplines
adding value to the network as a whole.
Without a doubt, this technology has the ability to save lives,
improve medical diagnosis and outcomes, and revolutionize the delivery
of medical education and healthcare services globally. As I predicted two
years ago as a TeleSuite employee when we initially began developing
this capability, this one looks like a grand slam home run.

Company: Polycom
Division Website: www.polycom.com
Company Founded: 1990
Employees Dedicated To Visual Collaboration: N/A
2005 Revenue: $580.66MM
Public / Private: Public (NASDAQ: PLCM)
Key Executives:
Robert C. Hagerty — Chairman, President, and Chief Executive
Officer Steven C. Huey — Chief Marketing Officer
Craig Lynar — Vice President, Solutions Marketing
Polycom, the market leader in traditional videoconferencing,
brings a complete portfolio of solutions to the emerging telep-
resence industry with 42 percent of the group videoconferencing
market and strong institutional knowledge and intellectual property
in IP/ISDN video, voice, data collaboration, and videoconferencing
network management/scheduling.
The company announced the Polycom RealPresence Experience
(RPX) on May 22nd, 2006, the result of a strategic partnership
with Destiny Conferencing, whose TeleSuite product line was the
original commercially-available group telepresence solution. The
RPX was specified from the market-proven strengths of Destiny
Conferencing’s telepresence environment and Polycom video codecs,
audio technology, and data collaboration tools. Polycom customers
will have the option to utilize a Polycom Branded Conferencing
network and concierge/help desk services provided by Destiny
Conferencing, which connects them to the second-largest effective
visual collaboration network after Teliris.
The Polycom RPX is available in six initial configurations, its
options ranging from four participants facing a 4’x8’ video wall for
$249,000 to a 28-participant environment facing a 4’x16’ video
wall for $559,000.
Polycom’s RPX VNOC and Circuit Services (network and concierge/
help desk services) start at $8,000 per month for the two screen 200
series and $12,000 per month for the four-screen 400 series.
Polycom RPX solutions include:
• Polycom VSX 8000 video codecs
• Polycom EF 2241 Vortex Automatic Mic / Matrix Mixer with
Phone Hybrid and Power Amp
• Polycom People + Content IP Data Collaboration Tools
• Life-sized multi-point
• Three Sites — RPX 200 Series
• Five Sites — RPX 400 Series
Telepresence Company Profiles
• Voice-activated, or traditional videoconferencing “Hollywood
Squares” multi-point format available for both 200 and 400 series
• Power and network connections at each position
• Site survey and on-site installation
The Polycom RPX can be run as a stand-alone system using
a company’s internal network, or it can also be purchased with
optional RPX VNOC and Circuit Services (concierge class service
and an overlay Quality-of-Service IP network). This network currently
provides connectivity to Destiny Conferencing’s customers, which
include PricewaterhouseCoopers, 3COM and AOL among others.
HSL’s Analysis
While it only took Polycom three years to catch on to the fact
that telepresence solutions have spectacularly better end-user satis-
faction and usage than traditional set top videoconferencing, they
finally made it to the party in a big way. Striking a deal with Destiny
Conferencing locks up the only manufacturer of telepresence envi-
ronments in the world outside their main competitors (HP Halo
and Teliris). If Tandberg, Sony, and/or Aethra want to get into the
business of group telepresence environments, they’ll need to start
from scratch and face intellectual property hurdles to do so.
The Polycom RPX solution also has a lot going for it:
• The modular “room-within-a-room” environment doesn’t require
any permits, minimum facilities make-ready, and can be moved
relatively easily should a company relocate a facility or deploy a
temporary suite to support a project or joint venture.
• With Polycom’s standards-based VSX 8000 videoconferencing
codec platform, RPX suites are compatible with legacy video-
conferencing equipment — a capability that HP Halo still lacks.
• Polycom RPX customers can connect to Destiny Conferencing’s
existing network of Fortune 1000 clients, which is, by my calcula-
tion, the second largest effective visual collaboration network on
the planet after Teliris.
• The ability to seat 28 participants in an effective classroom setting
also separates them from the pack. Effective distance education
(for both universities and corporate training/on-going education/
certifications) will be a key application in the coming years, and
the Polycom/Destiny Conferencing product line boasts the only
large-capacity classroom solutions on the market.
The biggest drawbacks to the RPX? Its lack of a high-definition
codec solution (the company reports it’s in the works) and the
problem of eye-contact among participants in the larger 400 series
environments. While the participants closest to the center of the
room have an excellent approximation of eye contact with the
participants closest to the center of the room at the remote site, the
effect is lost as you move out to the left and right of the center seats
because of the position of the camera.This is not a significant issue in
larger classroom settings or for small meetings of one to four, but for
meetings of six to eight on each side, it can become annoying.
49
Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
Company/Division: Telanetix
Company Website: www.Telanetix.com
Company Founded: 2001
Employees: N/A
2006 Revenue from VC: N/A
Public / Private: Public (OTC TNXI.OB)
Key Executives:
Thomas A. Szabo, Chairman and Co-founder
Bob Alford, Chief Architect and Co-founder
Rob Arnold, Chief Technology officer and Co-founder
Rick Ono, Chief Operating Officer
Founded in 2001, San Diego-based Telanetix started shipping
systems in 2005. The company has eight sites installed with an
additional five on order. Unlike the other providers of telepresence
solutions (with the exception of Polycom which manufactures
its own codec), Telanetix is unique in that it has developed its
own proprietary MPEG-4 codec and networking platform that
supports multiple video streams, allowing it to provide a relatively
inexpensive solution compared with most other providers
that must integrate multiple codecs and a premise router from
other providers.
Another difference is that Telanetix distributes its systems
through high-end audio-visual systems integration firms that then
integrate the base Telanetix technology package into a range of
options individually designed to the customer’s specifications.
Telanetix customers have a choice of different display sizes and
options, and their system integration par tners can construct
engineered environments that address lighting, acoustics and
par ticipant placement. The company’s announced AV par tners
include Avidex, Audio Video Innovations (AVI) and Audio Visual
Systems (AVS)
The Telanetix Digital Presence Conferencing Solutions range
from two screen systems that start at $39,550 and four screen
systems at $45,383. Solutions that require more than four screens
are quoted based on the number of screens. The base Telanetix
system consists of the following components:
• Linux-based, multi-stream MPEG-4 codecs and IP networking
platform.
• Fixed-position camera hidden at eye-level for an approximation
of eye-contact with remote participants.
• Life-size multipoint with up to nine locations using IP multi-cast
(limited to the number of screens deployed by the customer I.E.
four screens = nine locations)
50
Telanetix Network Services provide QoS, IP multicast-enabled
network connections starting at $3,500 per month for 5MBS of
QOS bandwidth. The company also provides a 24 x 7 help desk as
part of its service for an additional $500 per month.
HSL’s Analysis
I found Telanetix to have good video and audio quality
with the lowest price point out of all the systems with multiple
video streams, life-size par ticipants and hidden eye-level
cameras. The Telanetix solution was also the least expensive
group system that we reviewed which is impor tant for those
organizations where six-figure solutions are not an option. I
also found the system controls easy-to-use, with the ability to
launch calls and share data simple and intuitive.
I was also impressed that Telanetix choose to par tner
with Savvis Communications for its QoS network solution
that suppor ts IP multi-cast. In a previous life, I headed a
sales organization at Savvis that specialized in building QoS
network solutions for the financial industr y for trading floor
technology and market data applications. The quality of the
Savvis network for delay-intolerant IP video helped inspire
my original research into effective visual collaboration and
eventually telepresence. Savvis’ ability to layer in additional
network ser vices — including Internet and VPN on the same
connection — without affecting the quality of the video
reduces the operating costs for companies that choose to get
their network ser vices from Savvis as well.
Telanetix lacks in some areas, however. Not having a
complete turnkey solution that addresses lighting, acoustics
and par ticipant placement hinders it from providing a consis-
tency-of-quality among all Telanetix rooms. The company says
its network of AV par tners could develop such as solution
for any customer who wants it, but I believe they should get
an engineered environment on the menu and the sooner
the better. Additionally, high-definition seems to be a ways
off for the company, and its compatibility with traditional
videoconferencing is limited to integrating in an additional
videoconferencing endpoint that seems somewhat kludge.

Company: Teliris
Website: www.Teliris.com
Company Founded: February 2001
Employees Dedicated to Visual Collaboration: 40
2005 Revenue: N/A
Public/Private: Private
Key Executives:
Martyn Lewis, Chairman
Marc Trachtenberg, Chief Executive Officer
Steve Gage, Chief Operating Officer
Jamie Thomson, Managing Director
Teliris was founded in February 2001 as an off-shoot of Mycroft,
a New York City-based networking and IT security company, and
Global Intercasting, Ltd., a UK-based corporate communications
and design/integration firm. The company has been shipping its
GlobalTable group telepresence solution since October 2001. Teliris
GlobalTable customers include: BP, Euronext, GlaxoSmithKline, 3i,
Pearson plc, Lazard, Vodaphone, Xchanging and The Royal Bank of
Scotland, among others.
GlobalTable appears to lead the pack in installed customer
locations, with over 110+ sites either in place or on order, making
Teliris the commercial leader in the space. Available in a number
of multi-screen configurations, ranging from four to sixteen seats,
the Teliris GlobalTable can also be integrated into larger environ-
ments. As a compliment to its larger product, the company offers
single-screen personal and executive solutions that executives can
operate from their offices. GlobalTable also provides backward
compatibility with traditional videoconferencing endpoints.
GlobalTable installations include:
• High-quality, MPEG-2 or MPEG-4 video (true high-definition optional)
• Full-size, multi-point (up to six locations) with Teliris’ proprietary
VirtualVectoring technology (discussed in more detail in the paper)
• Data collaboration screen and presentation sharing.
• Simplified, touch-sensitive control for volume and collaborative tools.
• Site survey and on-site installation.
• Options include: audio conferencing add-in, multi-site document
replication, DVD integration, 2D Cam, 3D Cam, stand up presen-
tation, digital flip charting/storyboarding, lectern, encryption, and
full redundancy among others.
Unlike the HP Halo Collaboration Studio and Destiny
Conferencing’s TeleSuite Systems, which essentially install a “room
within a room” with a uniform look and feel, the GlobalTable
solution has more flexibility in its room size. The final design can
match corporate aesthetics.
Telepresence Company Profiles
The cost of a GlobalTable installation ranges from $164,000
for a standard three-screen system to $280,000 for a high-
definition version. GlobalTable Access, the company’s executive
solution starts at $63,000 per room and larger GlobalTable and
GlobalTable VirtuaLive/VirtuaLive 360° environments can run
north of $300,000 depending on the number of screens and
options. Recurring operating costs run from $3,500-$12,000+ per
month, per location, depending on the type of system and network
costs in the country of installation. The recurring costs include:
• InfiNET — Teliris’ secure, high-bandwidth, low-latency Quality-of-
Service IP network
• Proactive remote monitoring of the audio/visual and network
devices in the environment
• Concierge reservation support, help desk and regular health
checks/equipment maintenance
HSL’s Analysis
With over 110 sites installed or on order, a large network of
Global Fortune 2000 customers and a fourth generation product
coming out this fall, Teliris seems well positioned to ride the telep-
resence wave generated by HP, Polycom, and Cisco’s entrance into
a market that has so far remained the best kept secret in telecom-
munications. With a strong background in internetworking and IP
security, the company has built a scalable, carrier-grade network
platform for managing and monitoring high-bandwidth interactive
video that is also backwards compatible with legacy videoconfer-
encing end-points. No small feat. It touts a system and network
uptime reliability of 99 percent and an SLA to back it up, giving
prospective customers confidence that the GlobalTable solution is
going to work as advertised.
The company’s customer base remains one of its strongest
assets, especially as more and more users realize the value and
potential for inter-company business. As the partners, vendors and
customers of Teliris’ clients begin to seriously evaluate telepres-
ence solutions, they’ll surely find sitting around the GlobalTable
with their friends an attractive option.
With a true high-definition system at a price point at almost half
the cost of a non-high definition HP Halo Collaboration Studio, the
company is strongly positioned price-wise against its newest and much
better known competitor. The company is also developing a solution
for the movie and animation industries with a stand-up presentation
capability and large video wall for storyboarding that looks promising.
It is also working on several solutions that integrate tools for collab-
orative research and development between remote facilities in
pharmaceutical research and other specialized applications.
The company’s VirtuaLive 360° offering which is just coming
into deployment adds a stand-up presentation capability that the
other vendors in the space have so far failed to address. I have seen
an R&D version of Teliris’ fourth generation display system, due out
this fall, which provide a more seamless and immersive display and
the company has been working on a camera technology for over
a year and ½ which promises to more seamlessly stitch together
multiple video streams.
51
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