When it comes to telepresence deployments, Hewlett-Packard’s Halo team has noticed a rather interesting trend: A year and a half ago, customers were often purchasing 3 to 4 telepresence rooms on their initial purchase. Now, HP is seeing the average initial purchase grow to 8 to 10 rooms, with some customers initially purchasing as many as 30 rooms. Here’s the scoop, from The VAR Guy.
First, a little background. The VAR Guy believes Hewlett-Packard and Cisco Systems have been competing fiercely to win telepresence business from Marriott International. When Marriott a few days ago announced a major commitment to an AT&T/Cisco telepresence service, The VAR Guy offered HP equal time to find out how HP Halo was performing in the market.
Here’s the email exchange with Ross Camp, senior marketing communications manager for HP Halo…
The VAR Guy: Is Marriott working with HP Halo anymore? If so, how?
HP’s Camp: While we had a business model that was well received by Marriott International, the business model was not necessarily workable for individual franchise owners. We continue to have a positive relationship with Marriott and would definitely not be opposed to implementing a public access strategy with that hotel chain or other global chains in the hospitality industry.
That said, I do want to make it clear that public access remains a priority for the HP Halo business. HP Halo business managers have been doing a lot of work in this space, looking at locations, travel patterns, pricing, the “value” of time savings associated with public access, the type of configurations most suitable for public access and potential partners, both inside and outside the hospitality industry. We’ve also been talking to our customers who are residing in nearly 40 countries to see what type of public access strategy will work for them. This service, as you know, is still in its infancy stage and many telepresence vendors are seeing what will work. However, again, we feel we have a very good understanding of what it will take to be successful in this arena and look forward to sharing more news on this in the near future.
The VAR Guy: Either way, are there any recent HP Halo deployments you can point me to so that I can give equal time HP?
HP’s Camp: In terms of HP Halo deployments generally, we continue to see excellent growth. While HP guidelines prohibit us from releasing actual numbers, we will have rooms deployed in more than 40 countries by the end of the calendar year. Additionally, we’re seeing exceptional repurchase rates now. More than 80% of our customers who have had their rooms for six months or longer have purchased new rooms. Additionally, we’re seeing the number of rooms customers initially purchase grow as well. A year and a half ago, customers were often purchasing 3-4 rooms on their initial purchase. Now, we’re seeing the average initial purchase between 8-10 with some customers purchasing as many as 30.
Reading Between the Lines
Cut to the chase, and it sounds like Marriott isn’t moving forward with public access Telepresence systems from HP because Marriott franchise owners didn’t see/didn’t understand the potential business benefit.
But HP still made some interesting points. Telepresence seems to be moving (gradually…) from the early adopter stage, as businesses begin to build out multiple telepresence rooms to help network their executives (and customers) across the globe.
The big question remains unchanged: Are channel partners willing to get trained and certified to sell, service and support telepresence systems? Or is telepresence mainly a direct-sales play?
The VAR Guy will explore those questions in the days ahead.
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Proving that Telepresence is coming to the consumer market, Cisco is introducing video chat for TVs.
Hi Var Guy,
Having worked in hotels and knowing that the hotels have a primary mission of placing “assess in beds” I am less than encouraged that they (hotels) will be the “secret sauce” for TP in public venues.
I am sure that individual franchise owners, concerned about their bottom line, don’t want to get away from their primary missions, given the current recession, with lower occupancy and foreclosures plaguing the hotel and travel industries.
The secret for TP, I believe, as I scrounge around for funding, is a business model in which TP has a minority role,in terms of revenue and is used primarily as a differentiator and perhaps even a loss leader.
I can see TP in hotels working in a last-mile capacity with better support and environment than the current rental video room market. It’s an enhancer for physical conference rooms to create potential multi-site conference environments. And it’s incremental revenue for current hotel occupants.
However, one of the problems with putting TP in hotels is that the hotel isn’t necessarily part of the normal ecosystem for non-remote, non-traveling employees. There needs to be an additional effort to treat TP sites as a full outsourced “hub” for a spoke of businesses requiring high-touch, high-intimacy remote communications for this to work, I’d think. Not sure that hotels are best equipped for this role, off-hand.
Carter, Hyoun: Good to see Telepresence on your radars. The VAR Guy does think hotels — particularly hotels with conference centers — will become Telepresence hubs. But you do point out some key limitations, especially related to franchise owners that don’t have the cash/expertise to get started, nor might they understand the potential upside… …
Var Guy,
Having TP in conference (Pangeair tried an unsuccessful attempt in the Dayton,Oh Convention Center last year)centers you would think, might be perfect. As expressed to me by the Sales Manager of Convention Center, “people would walk by and not really stop, because they had no idea what it was” ( ie, you have to have a dedicated staff person to educate, inform and market the technology).
I am just afraid that it will be hit/miss in a hotel/convention center environment. It may be a nice piece of technology thats placed in some corner of the site, much like bringing a high-end treadmill machine home to your house that after a couple of months becomes your closet with all of your clothes hanging over it.
Here’s some questions. Where is the hotel/Convention center going to obtain the dedicated staff, in these days of major staff reductions. Who is going to market the technology on a local level ? Some of these hotels/convention center are running less than a 40% occupancy. So where are the customers going to come from? Even if a hotel/convention center does a decent job with marketing and staffing, I’m not sure the ROI is even close.
My 2 cents…
Carter: Your 2 cents are very valuable. You raise some great questions.
Ultimately, necessity and early adopters will drive telepresence in conference centers/hotels, The VAR Guy believes.
People “follow” when they see/hear about a useful activity. Cisco, for instance, conducts many editorial interviews using TelePresence. Editors, in turn, see the value of the technology in action — even though the briefing has nothing to do with TelePresence.
One can expect investment bankers, corporate CEOs, and executive board members to use TelePresence in Hotels for high-end, high-value meetings. Then, there will be a trickle-down to the regular folks… Like The VAR Guy.
It’s going to take time. There will be mistakes … and many failed business models. But TelePresence in hotels and homes seems inevitable to The VAR Guy.
Short term, tho, the questions Carter raised need to be answered.
July 16th follow up:
By William Spain, MarketWatch
CHICAGO (MarketWatch) — Marriott International reported a 76% drop in second-quarter profit, with the hotel-chain giant hurt by the ongoing slump in business and leisure travel — and the company’s stock quickly followed its numbers down the tubes in early trading Thursday.
Bethesda, Md.-based Marriott /quotes/comstock/13*!mar/quotes/nls/mar (MAR 20.48, -1.32, -6.06%) said that it earned $37 million, or 10 cents a share, down from $157 million, or 42 cents, in the year-ago second quarter.
Carter: No doubt there’s a travel slump. So if Marriott can’t convince you to stay the night perhaps they can tell you to stop by for a few hours to use telepresence…
Good point! Now,the Marriott would just can become a place that rents telepresence by the hour. When then happens you would probably not refer to it as a hotel, which has been my point all along…
Carter: The VAR Guy looks forward to meeting u over telepresence someday
Its a date!