Business

ST. PAUL (AP) ― Video conferencing has been underwhelming corporate America for years. But maybe it's finally ready for its close-up.

With oil hovering around $100 a barrel and the rigors of business travel looking more and more like an episode of "Survivor," more companies are giving the high-tech alternative to the in-person business meeting a second look.

And more are buying in. Video conferencing was a $1.14 billion global market last year, up sharply from about $800 million in 2006, according to Wainhouse Research, a Boston-area technology consultancy that focuses on the industry.

That change is playing out locally.

As president and CEO of Video Guidance, an Eden Prairie company that has sold and serviced video conferencing systems for nine years, Michael Werch readily acknowledges the technology's past failings.

Instead of the cutting-edge tool that was promised, video conferencing sessions sometimes seemed more like comedy routines, with jittery pictures, iffy connections and geeks from IT hovering over the shoulders of befuddled executives.

Companies would struggle to make expensive and kludgy systems work, Werch said. "It's finally prime time."

His company is expecting sales of $11 million to $12 million this year, up from $8.4 million last year.

A new generation of products is adding momentum, but it doesn't come cheap. "Telepresence," the latest buzzword, uses multiple high-definition cameras and monitors, mixed with sophisticated software, to create life-sized images on screens that try to create the illusion of conferees being in the same room.

Video Guidance began carrying such systems a few weeks ago and has not sold any yet. At $199,000 each, the units are at the very high end of the product line. Tandberg, the leading vendor for all systems, recently teamed with Video Guidance to show off telepresence and other gizmos to potential clients including Target, Land O' Lakes, U.S. Bank and about 90 other Twin Cities organizations.

When Jerry Monroe, a Tandberg executive based in New York, dialed in, his life-sized image appeared in the center of three 50-inch high-definition monitors arranged side by side. Onscreen, Monroe wheeled his chair left and right, moving from screen to screen while he talked to show how his voice traveled to different speakers that followed his image, lending a sense of movement.

Monroe, who could see the audience, said he enjoyed their looks of skepticism mixed in with oh-wows.

"Yes," he joked, "you can talk over each other and scream at each other just as you do in your face-to-face meetings." The audience tittered.

For this industry, selling customers on the idea of video-conferencing hasn't been as difficult as delivering a product that lived up to customers' expectations.

In the past decade, there were seven years of nearly flat sales because corporate customers couldn't stand the systems they were buying, said Andrew Davis, Wainhouse's senior research analyst.

"You had these herky-jerky images," he said. "After an hour, you just wanted to get the hell out of the room."

Newer technology has finally brought what users expected in the first place, namely something that looks like television, he said.

The new products also can mix in documents like spreadsheets and slides and dial up new participants on a moment's notice, creating a conference call that can look like an episode of the TV game show "Hollywood Squares."

The spread of cheaper broadband Internet connections has helped too. But it was the spiraling cost of business travel, even just driving to the other side of town, that drove the recent spike in interest, Davis said.

Although travel savings is a key driver, businesses also are hoping video conferencing could boost revenue by speeding up decision-making, he said.

Perhaps most striking, however, is how video conferencing has filtered down from the executive suite to cubicle dwellers.

Minneapolis-based Target Corp., a user of video conferencing for more than a decade, a few years ago installed new high-definition units in five locations in its downtown Minneapolis headquarters and its new campus in Brooklyn Park, plus two units in India.

Most workers use it to communicate within the metro area, but the technology team regularly video conferences one of its members in Bangalore to keep her in the loop, company spokeswoman Kelly Basgen said.

"It's pretty user-friendly," she said. "And no matter what location you're in, you're all on one team."

Video conferencing is even helping to bridge distances from doctors to patients around the state.

The Minnesota Association of Community Mental Health Programs in St. Paul used part of a $475,000 federal grant to install video conferencing centers in 60 locations around the state.

The 42-inch LCD screens are not high-def but show enough clarity that some doctors use it to evaluate their patients, with their permission, said Ron Brand, the association's executive director.

Patients in isolated rural areas sometimes are more comfortable with it than the doctors, he added. "It beats driving 50 miles for them," he said.

Telepresence and high-end teleconferencing systems by household names like Cisco Systems and Microsoft are giving a new boost to the industry.

Representatives for corporate customers who attended the recent Video Guidance demonstrations said they were intrigued by telepresence, but either thought it was too expensive for them or something they needed to evaluate further.

There appear to be some kinks to work out.

The Tandberg system aims to give conferees the next best thing to eye-to-eye contact, but during the demonstration, the person on the other end of the call appeared to be looking just over the shoulder of a reporter interviewing him, instead of directly at him. Proper placement of the cameras is paramount, company officials emphasized.

Davis, the analyst, said other pressures, from fear of terrorism to a desire to be "green" by reducing carbon-spewing air travel, will push greater corporate adoption of video conferencing.

The day may come soon when every worker will have access to high-quality video conferencing on their desktop computers, Cleveland said.

Mixing his metaphors slightly, he said, "It's not rocket surgery anymore."

By LESLIE BROOKS SUZUKAMO
St. Paul Pioneer Press

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)