Not Your Daddy's Videoconferencing

By Linda Brewton
June 18, 2008 | Comments (3)

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Is Internet video the new killer app? Cisco Systems (Nasdaq: CSCO) thinks so. And with its recently launched platform for integrated business video, Cisco is cultivating a first-mover advantage in what could be a $50 billion market opportunity.

The new platform includes digital signage, IP video surveillance, and desktop-video capabilities. With the ability to use video meetings, provide on-demand training, and let globally scattered teams collaborate, Cisco's platform will help businesses save money and increase productivity.

But is the world ready for video networking?

Given last week's announcements that United Airlines (Nasdaq: UAUA) and US Airways (NYSE: LCC) will follow American Airlines parent AMR's (NYSE: AMR) lead in charging passengers for checked baggage, maybe so. All of this nickel-and-diming in the wake of reduced capacity, coupled with declining service levels, has made airline travel costly and downright annoying for most business travelers.

That's where the videoconferencing solution comes in. Videoconferencing used to make me think of those old Godzilla movies, where the dialogue didn't quite sync with the actors' lips. But the medium has come a long way. Increased bandwidth, LCD and high-definition screens, and easy-to-use production tools from Microsoft (Nasdaq: MSFT) and Adobe (Nasdaq: ADBE) have now made videoconferencing a viable alternative to the face-to-face meeting.

Although Cisco has had video-networking capabilities in its arsenal for years, the concept has only recently begun to take off. In a business environment marked by increased globalization, tightened budgets, and "green" initiatives, Cisco may yet be rewarded for its patience and foresight.

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Fool contributor Linda Brewton does not own shares in any of the companies mentioned. The Fool has a disclosure policy.

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  • Report this Comment On June 18, 2008, at 6:33 PM, TMFHelical wrote:

    Cisco bought Webex, which was one of my favorite plays in what could broadly be termed videoconferencing. The appeal of remote meetings, training, and sales presentations is even greater today with fuel twice what it was back when the deal closed.

    No question that travel will reduce where practical, and the net will be part of the solution once again. I'd rather have a smaller cap play like Webex than Cisco though. Citrix perhaps?

    Ralph (HelicalZz)

  • Report this Comment On June 18, 2008, at 6:55 PM, aeosfool wrote:

    Video conferencing has yet to approach its tipping point. Although I'm convinced it'll come some day, maybe sooner than later.

    I think two things have been holding it back; one reason, as you mentioned in your article, is the technology. I don't think enough people know that the technology is as good as it is. The other is cost. it used to be relatively expensive to videoconference, both in time and technology. Now, however, the cost has come way down and the alternative, travel, has gone way up.

    Everything is in place, it just needs another trigger other than travel cost and the cost of technology. Maybe when the iphone gets video chat capabilities?

  • Report this Comment On June 19, 2008, at 2:26 AM, PrincetonAl wrote:

    The old videoconferencing standards don't cut it because they don't provide a good experience.

    H.323 has been around a long time, and no one gets excited about it, and it certainly isn't going to move the needle at Cisco right now.

    However, new technologies like Teliris redefine the game, and are interesting.

    Its too bad its privately held, so there is no play on it for now. But watch whomever buys or invests in these up-and-coming plays ...

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