The VAR Guy

The VAR Guy has been hyping TelePresence — that next-gen videoconferencing technology — for nearly two years. But is anyone (outside of Cisco Systems Inc.’s own offices) actually using TelePresence? You bet. Here are nine key data points to consider.

First, some background. The VAR Guy recently read that Cisco had sold only six TelePresence systems in Australia. At first, our resident blogger worried the global TelePresence market was tanking. But then he reached out to Cisco for some clarification. Here’s the Cisco party line, along with our resident blogger’s perception.

9. Triple-digits: Cisco had more than 100 customers using TelePresence as of December 2007. Not bad, considering conference room systems can cost $300,000 or more per deployment.

8. The New Fortune 500: Cisco has received orders for more than 500 TelePresence units, as of April 2008. So, it’s safe to say that market growth has accelerated since the December 2007 deployment estimate.

7. The Bigger (Global) Picture: Cisco has 229 TelePresence rooms deployed internally, across 108 cities and 32 countries. Good to see Cisco practicing what it preaches.

But The VAR Guy wonders — might there be an opportunity here for Cisco to actually “time share” these internal systems to customers that can’t afford their own on-site deployments at the moment?

6. Rising Utilization Rates: Cisco’s internal TelePresence systems have a utilization rate of 45 percent, compared with standard video conferencing systems that have less than 1 percent utilization rates, the company claims.

5. Smile for the Camera: Cisco has held 110,627 TelePresence meetings to date. The VAR Guy has only attended one of them. Did the other 110,626 meeting invites get lost in the email?

4. Big Commitments: In the past three months, nine enterprise customers have decided to deploy 50 or more TelePresence rooms.

3. Global 2000 Brands: TelePresence adopters include Procter & Gamble, Wal-Mart, SAP, EMC, Wachovia, McKesson and others.

2. Any to Any Discussions: AT&T is introducing intercompany services that will allow companies to call outside their corporate networks, and hold virtual meetings with their customers, partners and suppliers.

Stop and consider that for a moment. Corporate Ethernet and IP networks became exponentially more valuable when businesses started using the Internet to enable any-to-any business communications. With a little luck, the same will happen with TelePresence.

1. Ready for the Masses?: Cisco recently introduced a Personal TelePresence unit (CTS 500) and a larger classroom-style room (CTS 3200). The moves could broaden the market for TelePresence.

Still, Cisco insiders are quick to assert that TelePresence involves a long-term strategy and market build-out, rather than rapidly growing sales volumes.

Also, The VAR Guy must note, the TelePresence industry is filled with a growing number of rivals, such as Hewlett-Packard Halo and LifeSize Communications, which has won a reseller agreement with Dell.

Closing thought: Whenever Dell jumps into a market, you know sales volumes must be growing.