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Video Conferencing Takes Wing as Travel Option

By Eric Benderoff and Mike Hughlett
Chicago Tribune Staff Reporters.

London's recent terrorist scare rattled thousands of business travelers , but unlike after the 9/11 attacks, video conferencing technology is so common that it has emerged as a viable alternative for many road warriors.

Several factors have spurred conferencing's growth in the past five years. Prices for audio and video gear have dropped in half, access to a conference is as close as a mobile phone, and the use of high-speed Internet connections is escalating.

"Flexibility is very important," said Jim Taylor, chief executive of the Thomas Group, a Dallas-based consulting firm that finds nearly all of its 200 employees on the road each week.

"Our people across the country can tap into our meetings with VTC [video and teleconferencing]," he said. "If it's practical, we might use more VTC in the next few weeks as security measures at airports increase. We can gripe and complain, or we can adjust to the situation."

His ease in handling the terrorist threats that erupted Thursday is common among businesses these days. Since 9/11, a tipping point for the conferencing industry, more businesses are integrating such technical tools into their plans, either as a supplement to travel or, for a short while, an alternative to travel entirely.

At video game-maker Midway Games Inc., video conferencing equipment installed last year is used to "keep up with all of our studios," said Reilly Brennan, a spokesman for the company.

Chicago-based Midway's 850 employees are spread out in many locales. The firm has game-development studios in San Diego; Los Angeles; Seattle; Austin, Texas; and Newcastle, England. Plus it has sales offices in Europe.

"I wouldn't call it a replacement for travel. It's not a substitute," Brennan said. Instead, it's a more convenient way to share information between studios and headquarters. "We use [the video conferencing system] almost every day."

But Midway employees still hit the road when a face-to-face meeting is necessary to spark creativity among its developers. There are times when "we like to get everyone in the same room," Brennan said.

Several factors have contributed to the growth of the industry, said Elliot Gold, president of TeleSpan Publishing Corp., a California firm that tracks the conferencing business.

First, video conferencing equipment has become much easier to use. No longer do you need somebody trained in the system to operate it for you.

"You walk in and it works. It's just about idiot-proof," Gold said.

Second, employees are increasingly used to digital communications, so they feel comfortable with the equipment.

And third, prices have fallen.

A good video conferencing system that costs $3,000 today would have sold for $7,000 three or four years ago, Gold said. And Web-based conferencing systems are cheaper, where a good Webcam can be bought for $129 and conferencing software for $40 to $50.

Considering the pace of technology, those extra tools may not be needed for small businesses or for people who work from home. Speakers and video cameras are increasingly being built into computers, and combined with the growing use of Internet-based phone calls, people can sit at a desk in Chicago and give a PowerPoint demonstration to a client in Europe.

There are three types of conferencing, said Scott Etzler of Chicago's InterCall, a subsidiary of Omaha-based West Corp.

Audio conferencing is by far the largest because people can connect from a landline, a mobile phone or from the Internet.

Web conferencing, which Etzler said is growing rapidly, allows users to show a presentation or graphs over the Internet during a call. He said pharmaceutical companies are big users of this technology because a salesperson, product manager, division president and the client can be be connected and view the same presentation.

Finally, there is video conferencing. That is growing as well, but it requires the users to be in a room with proper equipment and sufficient bandwidth to handle the video feeds. You also can patch in a participant from a mobile phone if they are stuck in traffic, something Taylor, the Thomas Group chief, said is common.

Etzler believes video conferencing could see a surge in interest for international business in the wake of Thursday's terrorist scare, as increased airport security measures may curtail some travel.

"It's too early to say if there will be a spike, but it will continue to grow because people will think twice about international trips," he said.

There was definitely a spike in conferencing after 9/11, but those numbers flattened out in subsequent years.

The conferencing industry posted a 12 percent sales gain for 2001, said Gold, with much of that growth coming after the terrorist attacks. But that rate dropped to 5.5 percent and 1.8 percent in the next two years, before accelerating to around 8 percent annually since 2004.

For InterCall, overall conferencing revenue increased 8 percent in September 2001 and soared 30 percent that October.

In 2002, revenue for audio conferencing rose 10.5 percent, but by 2003 that growth tapered to 5.2 percent. In 2004 and 2005, the numbers increased to 10 percent and 9 percent growth, respectively.

Overall revenue for the company this year is projected to be between $570 million and $600 million, up from $438 million in 2005.

For firms that rely on travel, Thursday's events will continue a trend that has emerged over the past five years.

"We'll continue to go out and meet with our clients," Taylor said. "But we will make adjustments."


Conferencing Takes Wing as Travel Option photo.

U.S. Workers Waste $3.9 Billion Annually By Not Telecommuting

National Survey Finds Most of the 25 Percent With an Option to Telecommute Prefer to Drive

Americans' love affair with the automobile is costing the U.S. economy $3.9 billion a year in fuel and time equal to 470,000 jobs, according to the 2005/2006 National Technology Readiness Survey (NTRS) released today. The annual survey—sponsored by the Robert H. Smith School of Business' Center for Excellence in Service at the University of Maryland and technology research firm Rockbridge Associates Inc.—found that despite 25 percent of respondents citing supportive employer telecommuting policies or jobs that would allow work from home, only 11 percent are doing so.

"With national gas prices hovering near $3 a gallon, American workers could suffer less pain at the pump if they took advantage of workplace telecommuting policies," said Roland Rust, executive director of the Center for Excellence in Service. "In addition to saving billions of dollars to the economy, the time and money saved on a long commute—even just two days a week—could significantly increase productivity and employee satisfaction."

The survey also finds even workers that could telecommute still would choose not to do so the majority of the time.

"It seems the professional and social environment of the workplace wins out over money and time savings," said Charles Colby, president of Rockbridge Associates. "Though a fourth of the population could be working from home, most American workers still choose the office environment for the majority of their work week."

Findings from the 2005/2006 NTRS regarding telecommuting—working at home or outside the traditional workplace—include:

  • Only 2 percent of adults who work telecommute full time; another 9 percent telecommute part time and 8 percent have home-based businesses.
  • Ninety-one percent of full- and part-time workers with a commute drive to work.
  • The median commuting time reported by U.S. workers with commutes is 20 minutes each way, and the median distance is 10 miles each way.
  • Of those who could feasibly telecommute, less than half would choose to do so more than two days per week and 14 percent would not telecommute at all.
  • Eighty-two percent of full-time American workers have a Web connection at home, 69 percent of which are high-speed.

Other findings in this year's NTRS include information on e-commerce and e-government trends; 3G technology, which provides faster bandwidth and greater functionality for cell phones and other mobile devices, for desired features such as global-positioning technology; and e-health trends to purchase prescription drugs and research ailments online. A summary of the 2005/2006 survey can be found online at www.rhsmith.umd.edu/ntrs/

The NTRS determined $3.9 billion could be saved if everyone with the potential to telecommute did so 1.6 days per week, based on a driving average of 20 miles per day, getting 21 miles-per-gallon at a gas price of $2.89 per gallon.

According to the Energy Information Administration, the typical commuter pays $688 a year in gasoline. Nearly 100 million adults commute to work each day, the vast majority alone in their cars. Increased telecommuting is one potential solution for a range of problems the country faces: escalating energy cost, traffic congestion and harmful carbon emissions affecting the environment.

About the 2005/2006 National Technology Readiness Survey

The National Technology Readiness Survey (NTRS) is an annual study produced by Rockbridge Associates Inc., and the Center for Excellence in Service at the Robert H. Smith School of Business, University of Maryland. The NTRS, founded by Center for Excellence in Service Senior Fellows Charles Colby and A. Parasuraman, tracks beliefs about technology and key behaviors related to e-service. The 2006 NTRS was based on a random sample of 1,015 U.S. adults (18 years or older) and was administered in December 2005 by telephone and online in February 2006 via Web surveys sampled from a Web panel.

About the Center for Excellence in Service

The University of Maryland's Center for Excellence in Service is one of the world's leading service research centers. The center, directed by marketing professor P.K. Kannan with marketing chair Roland Rust as executive director, is devoted to advancing research and business strategy related to service. The center is funded by corporate memberships and grants, as well as grants from foundations and other nonprofit sources. More information about the center can be found at www.rhsmith.umd.edu/ces/.

About the Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research for the digital economy. One of 13 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, Executive MBA, MS, PhD, and Executive Education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in four continents including North America, Europe, Africa and Asia. More information about the Robert H. Smith School of Business can be found at www.rhsmith.umd.edu.

About Rockbridge Associates Inc.

Rockbridge Associates Inc. is a leading technology research firm based in Great Falls, Va. Clients include Fortune 500 companies, government agencies and associations. Rockbridge conducts primary research and consulting to help with product design, positioning, pricing, and customer satisfaction. www.rockresearch.com.


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