Cisco: AT&T, BT Close to Interconnect Deal on TelePresence

Telepresence seeks to overcome the artificiality and service-quality drawbacks of conventional videoconferencing with large HD displays, fluid images and other improvements. Cisco spells the name of its offering with a capital “P.”

“Pure politics” has been the obstacle to getting AT&T and BT to pass TelePresence calls between their customers, Harrell said. “It’s billing.” The technology hasn’t been a problem, he said. “Getting these guys to play fair in the sandbox was the toughest thing we had to do.” Cisco spent a great deal of money setting up its own “public switched teleconferencing network” as a model exchange to show the carriers, Harrell said, declining to be more specific about the spending.

An AT&T executive said interconnection is important and “clearly part of our strategy and plans” for building the business of the Cisco service, because extending it increases its value to customers. “We want our network to be able to talk to as many telepresence end-points as possible,” said Alan Benway, AT&T Business Solutions’ executive director of product marketing management. The carrier expects interconnection “to evolve over time,” he said. “How quickly that will happen is hard to say.” Benway wouldn’t discuss any negotiations with BT specifically. BT didn’t get back to us right away.

Money splits are always a question when carriers negotiate sharing calls, Benway said. “Many times your interests conflict.” But it’s in the industry’s interest to achieve interconnectivity, Benway said. Business questions loom larger than technical ones. AT&T has test interconnections, and “I don’t anticipate major technological issues,” Benway said. Interoperability between advanced conferencing services, or between them and conventional ones, is considerably trickier, and it’s not clear how it will work out, he said.

AT&T has been “very pleased” with the “tremendous amount of customer interest” in the conferencing service, though some companies have just been “kicking the tires,” Benway said. A tough economy always makes it harder to close sales, especially on big-ticket offerings like this, he said. But some customers have moved up purchases to gain cost savings from teleconferencing, Benway said. The business is “definitely given major focus and attention from the AT&T and Cisco sales forces,” he said. He wouldn’t characterize the size or performance of the business.

AT&T said Monday that it had held by telepresence the latest in a twice-yearly series of meetings involving about 20 major customers in the Asia-Pacific region and carrier personnel from around the world. AT&T last month said that it was selling the service in China and in late March that it had gained BAE Systems Land and Armaments as a customer. Cisco’s contract with AT&T gives it advantages in competing against other providers and the carrier plans to announce this month getting the jump on unspecified new features, Benway said.

“You'll see another 10 carriers come up real quick” after the AT&T-BT deal, to offer TelePresence from around the world, Harrell predicted. The activity will be heavy the next two years and will put the service in China, India and other Third World markets, he said. “This is a classic ‘follow-the-money’ syndrome here,” allowing Cisco to connect strands of “verticals” such as financial services, law, accounting, education and health care across carriers’ territories and create conferenced business “communities” around them, Harrell said. “We've been pushing all the buttons we can, spending a lot of money just to get the connectivity to happen.”

Cisco’s biggest stumble early on was failing to offer a TelePresence directory, so customers could know who they could hold conferences with, Harrell said. “We're seeing quite a bit of interest from customers” in discovering outside experts to hold virtual conferences with, and “great search capability” will emerge for that purpose, he said.

Cisco was surprised by the demand for connections from corporations to their vendors, such as Wal-Mart to Procter & Gamble, Harrell said. He said he had thought the thrust would be downstream, to customers. “Nope,” Harrell said, it’s, “I want to talk to my supply chain.”

Providers have made progress toward turning telepresence into a realistic substitute for contact in person, Harrell said. “We are getting close to delivering that virtual meeting out there,” he said. “We've got a long way to go -- eye contact, and all that. The two-dimensional world is really tough” as a limitation in mimicking real meetings.

The R-and-D director of HP’s competing Halo service, William Wickes, wasn’t as outspoken about his business during a panel discussion with Harrell. He did recommend caution on 3-D technology: “A poor 3-D image is worse than a good 2-D image.”

Image quality, cost and especially complexity remain stumbling blocks to a broad boom in realistic videoconferencing, said Franz Lohier, managing director for innovation and new technologies at Logitech, whose products include webcams. “Even IT guys may not be capable of deploying Cisco’s equipment or HP’s equipment. This is complex.” But Harrell said without elaborating that Cisco is pressing ahead with long-announced plans to extend the technology into a consumer service.