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Travel Scare Has Companies Turning to Video Technology

With fear of air travel running at an all-time high since Sept. 11's terrorist attacks, companies looking to cut back on travel may further boost the use of broadband-powered videoconferencing and streaming video for corporate training and events.

Providers are still uncertain about the tragic circumstances that now boost their business case, but most believe the upward trend will continue even if travel fears subside.

That's how videoconferencing provider Wire One Technologies Inc. sees things, said CEO Richard Reiss. The Hillside, N.J.-based company offers video communications services such as Glowpoint, an Internet protocol-based network designed to transmit video data.

The company's stock price rose more than 22 percent when the New York Stock Exchange reopened after the attack.

"We would have liked it to have been recognized for the value it had prior to Tuesday, not for the increased value after Tuesday," Reiss said. "What we've seen prior to Tuesday's events was an acceleration in corporate usage and government usage of video communications and videoconferencing based on higher quality.

"Pre this horrendous event that happened on Tuesday, [there was] just the fact that travel was time-consuming and expensive and [that] video is now a strong viable alternative."

Thanks to an infusion of IP technology, videoconferencing has improved in reliability and quality compared to older circuit-switched offerings, Reiss said. But IP videoconferencing has its limits: Though the two-way video connection is well suited for smaller meetings, it is impractical for larger events, such as analysts' conferences or sales gatherings.

As a result, it's no surprise that providers of mass-audience video Webcasting services also are seeing an uptake in inquiries these days.

"Over the last few days we've had several very large firms notify us that they have cancelled large events that they had planned," said Yahoo! Broadcast vice president of business and enterprise services Jim Lewandowski. "And we're just now at the stage where people are beginning to discuss what the alternatives solution to canceling that is.

"Most of them are recognizing that the purpose of the event was not just a meaningless business expedition."

But he is quick to say interest in corporate Webcasting had been rising prior to the Sept. 11 events.

"Fortunately in our industry, since most people have been using Webcasting at very high levels in their companies just for earnings, conference calls and things of that nature," he said. "High levels within organizations are well aware of what the capabilities are to communicate using the Internet."

The Internet distance-learning sector is also likely to see an upswing. Network gear maker Cisco Systems Inc. — which has used its electronic-learning technology to train its employees and resellers — recently started offering the product to customers.

The Intranet portal developed by Cisco includes some 10,000 training resources, ranging from IP multicast presentations to white papers. Within a year, Cisco saw a 100 percent return on its development investment, according to Mike Metz, director of marketing for Cisco's Internet Learning Solutions group.

Metz said the use of Internet training and education uptake had already increased prior to Sept. 11. Up until last year, 3 percent of Cisco's total customer training was conducted online. But in the past year that has jumped up to 15 percent. Even before terrorist attack, Cisco was projecting figure that to rise to 25 to 30 percent this year.

"I think that what we'll see the events of the last week will accelerate the trends that were already in place," Metz said. "It's kind of a no-brainer to understand how to save money with your internal operations and give yourself competitive differentiation with Internet solutions.

"But now that the travel costs will increase, and the restrictions will likely increase and the delays will likely increase, it is just more reason to move faster in that same direction."

Indeed, a big selling point for these technologies is they cut the cost, disruption and loss of time from employee travel. Since those factors will remain even if air travel fears abate, it builds a good business case.

"When you look at the cost of having a 3,000-person conference in Las Vegas and the flights associated with that, oftentimes an event like that will run into the millions of dollars," Yahoo!'s Lewandowski said. "The cost of effectively communicating that same message using Internet broadcasting is probably in the couple hundred thousand dollar range.

"So it's probably an order of magnitude less to use Internet broadcasting for one-to-many type communications."

WireOne's Reiss agrees. Because videoconferencing harnesses digital subscriber line, T-1 and gigabit Ethernet technology — and may even employ cable in the future — the application now has more to offer.

"I believe it is going to spike but there will be continued demand because the quality is now there — the price points are now there," he said. "It is as reliable as you turning on the TV and watching [Cable News Network], only now you are talking back to them."

REAL CONFERENCE ONLINE

The trend is already apparent. Streaming media provider RealNetworks Inc. will offer online access to its Real Conference this week in Seattle. For $199.95, online participants can access conference sessions live or on-demand for up to three months.

But though long-term prospects for these technologies remain strong, it's unclear whether their growth is a sharp spike or a steady incline.

"I think it will probably be one of those things that pushes it up a notch, but it is too early to predict that it takes it to a new level," said Akamai Technologies president Paul Sagan. The content delivery provider offers videoconferencing and Webcasting support services across its 11,600-server network.

"We're all going to dramatically adjust our patterns for a short while, and you are going to have to look back in six months and say, 'How much did it fundamentally affect us?'

"Some of that will depend on what kind of war we are getting into," he added. "Is this thing really horrible … and will people really stop traveling — in which case we will really are going to have to do things differently — or is it something that becomes simply an inconvenience from a scheduling standpoint and people get comfortable with that again?" Sagan said.