Conference Pair

Video conferencing technology is not so much a forbidden fruit as an unripe one. Marc Ambasna Jones talks to two dealers that are getting a taste for it

New technologies rarely hit the market without having a loss-making, product disaster history. Video conferencing is no exception. Early attempts at video communications tools, such as the video phone, have quickly been assigned to the inventions graveyard.

Video conferencing is a buzzword technology that is still a little rough around the edges and in some cases misses the market completely. While it is undoubtedly a massive opportunity, it is also a technology that has only just found its feet ? the telecoms industry finally agreed on design standards in 1991. There is still a lack of networking software to drive video conferencing across Lans, and few companies have set up a sales structure which incorporates the IT channel.

Audiovisual dealers and telecoms firms dominated the early market, but now there is a race on. The good money is backing the IT industry to carry the technology to market into the next century.

It is easy to understand the early reluctance of IT dealers to get involved with video conferencing. It begged caution in its early form, but the implementation of standards has given the technology a timely boost.

The growth in video conferencing has been enough to convince presentations distributor Maverick to set up its own dedicated video conferencing division. General manager Mark Wilkins says that some market research firms have already quoted a worldwide market figure of $7 billion, although he admits this is a little high.

Richard Moulds, marketing manager of video conference supplier GPT Video Systems, says that desktop systems have experienced significant growth, but this growth is lower than anticipated two years ago.

The picture still seems to be one of caution, but the sales foundations are well under construction. Wilkins acknowledges the fact that audiovisual dealers will play a significant role in the market, and it is the breakdown of particular systems for particular markets that may determine how involved IT dealers can get.

Both Wilkins and Moulds are aware that IT dealers have to learn about the communications and video side of the technology, while audiovisual dealers have to learn about the IT side. Moulds believes the IT dealers, with desktop systems in particular, stand a better chance of winning the race to be chief of the video conferencing channel.

?GPT does not naturally have the routes to market in the IT channel,? he says. ?The convergence of communications and PCs is being embraced more quickly in the IT world, and video conferencing and multimedia is where the two industries meet. This is why we are looking at setting-up an IT distribution channel.?

Wilkins echoes Moulds? beliefs. Maverick plans to help IT dealers understand and access the technology through its own skills and experience. ?We intend to treble our turnover in a year with video conferencing,? says Wilkins, ?because there are some serious players involved now. The problem is they don?t know how to get the products to the market.?

The main thrust for IT dealers is in desktop video conferencing. Wilkins believes the rollabout and high-end video conferencing market will probably be dominated by audiovisual dealers ?because you need the audiovisual skills?.

This does not necessarily mean that the big margin products will never filter down into the IT channel. The technology is still on a steep learning curve and any sales therefore tend to demand a good margin. Moulds says typical margins are in the region of 35 per cent, although this is not necessarily what GPT would offer.

?There is no doubt of the potential of this market,? says Moulds, ?but there are still problems to overcome. Most companies have separate IT and telecoms departments with different ideas and different budgets, but they need to merge. There is also the criticism that perhaps the reason video conferencing has not met its expected growth is because of price. It?s a myth that price is the easiest get-out if something is not selling.?

?Perhaps people are just waiting for the right system to emerge. There are some dealers out there that have already realised this and are trying to find a suitable solution.?

Moulds believes that what everyone is waiting for is a Lan- based video conferencing system. He bases this theory on the fact that in a corporate environment, everything is geared to work across a network.

?Such products don?t exist at the moment, which is the main reason it?s not a great success,? he says. ?It?s therefore difficult to predict the longer term future of the market.?

GPT is trying to address that problem and Moulds says he knows several other firms have made small-scale trials. GPT has already joined forces with Avistar Systems to develop what it calls enterprise collaboration architecture, ?a complete line of Lan, Wan, conference room and teleprofessional video products?.

With joint product development, marketing and distribution, this pact could help the whole market advance.

Without network capabilities, Moulds is not convinced video conferencing will take off. That doesn?t mean there isn?t a market slowly emerging anyway, it?s just that it won?t fizz along in perhaps the way that it should. Maverick is obviously banking on the market picking up sooner rather than later.

Wilkins is convinced it will, although he adds that desktop video conferencing will not become mass market until someone develops a video conferencing PC, about two or three years down the road.

The backbone of Maverick?s initial involvement in the market is a distribution agreement with Loughborough Sound Images (LSI). Wilkins says the agreement will enable it to supply a complete H320/T120 multimedia desktop video conferencing package, as well as a core codec for system integrators. Software upgrades, including Mpeg 1/2 and internet access, will also be available.

Wilkins says that at the moment, the biggest opportunities are in upgrades. ?There is an immense market for people to get into video conferencing through the upgrade market,? he says. ?For example, the LSI product is a PC card which is upgradable through software.?

Maverick also supplies a range of peripheral products such as cameras, video monitors, screen devices and LCD projectors from names such as Mitsubishi, Hitachi and NEC.

Wilkins sees the video conferencing market as a natural progression for Maverick. He says existing presentation customers are already asking about available products and which technology fits where.

At the moment, most of the existing IT channel is not quite geared up to answer questions on video conferencing, let alone supply it. Wilkins sees this as a challenge and believes willing dealers will be able to learn the required audiovisual technology relatively quickly, mainly because Windows will still be the main interface.

Moulds is concerned about dealers rushing into supplying systems if they cannot support them. ?There are enormous responsibilities. Support and training issues are important because a company?s communications are mission-critical. So support has to be very good and fast,? he says.

Wilkins sees this as an important role for Maverick. He says he will offer standard support services to dealers including training, warranty repair, technical support, installation service/support and demonstration facilities for all video conferencing products.

It?s a necessary hand-holding offer intended to instil solid video conferencing roots in the IT channel, something which may attract the interest of GPT. But Moulds reiterates his feeling that it?s still early days. He says that although a company may want 1,000 systems, in reality it may only be able to get 50 systems.

This is the problem. People cannot get what they necessarily want and this may be enough to turn off a number of potential buyers for fear of the market being too immature.

Wilkins accepts this point, but adds that Maverick?s division will try to create market demand through training and educating dealers. Dealers can offer existing technologies which are upgradable when further product becomes available. It?s getting your feet in early and avoiding the rush, and for dealers, this is when the lure of margin is at its greatest.

Wilkins is aware of the margins and sees it as a magnet to attract interest in the product. He is also aware that some big names are getting involved, and this in itself attracts interest.

GPT and Picturetel are already two important names in the market, but it is British Telecom that has brought video conferencing to the attention of the masses through national TV advertising, although perhaps its ads were a little premature for its product and the market. BT will try to get ISDN into the market more if it has an agenda to use it through services such as video conferencing. This can only help the market develop.

There is undoubtedly great scope for further development. It is, by no means, a finished, polished and well-adjusted market. It is not just an easy, high-margin sell either. Considerable support and retraining is required and much of the market still has to be created, but having a specialist distributor to help you is an advantage.

If any dealer is prepared to learn about audiovisual skills and is eager for a new technology to sell and support, then video conferencing should be on the shopping list. Although the market still has some way to go, in this case, there may be no problem with booking early.