Telanetix Touts Telepresence on the Cheap
Telanetix Inc. thinks it will make its mark by offering the most practical telepresence packages that employees at all levels of a company will be able to use.
A demo of Telanetix's telepresence setup shows that it's not aiming to unseat Cisco Systems Inc. (Nasdaq: CSCO) or some of the other vendors in the space. Compared to other demos, the sound and video quality were not on the same level and the standard-definition images were not as life sized. (See Nortel Trumps Cisco?, Cisco's Telepresence, Oldest. Telepresence. Ever, and Tandberg Telepresence.)
Telanetix says its aim is to work well enough to have a productive meeting in which you still feel like you're in the same room as the other participants. And for a price tag of $40,000 to $60,000 per room -- a fraction of the $300,000 that Cisco and others charge -- the value of the service makes for a compelling business model.
"We're a software company," says Rick Ono, president and COO of Telanetix. "When we first got into this, our competition was video conferencing, so we set our pricing to compete with those guys."
Telanetix's software and codecs enable it to operate its system at much lower bandwidths than the competition -- approximately 1 Mbit/s per screen as opposed to the 4 Mbit/s to 6 Mbit/s that others use. For example, it has a bandwidth shaper that helps guarantee the quality of the telepresence session.
If you're in an office that has a single 10 Mbit/s Ethernet connection and someone begins a large file download, the bandwidth shaper will help stabilize the bandwidth so that it doesn't cause interference with any telepresence session taking place.
Additionally, Ono notes that customers rarely have to upgrade the pipes coming into their office. Most Ethernet connections are sufficient enough to handle Telanetix telepresence which means there are no additional monthly bandwidth charges.
Ono says that his target market is the mid-level manager inside corporations. These are the employees that do the most traveling and therefore would benefit the most from the reduction in travel that telpresence brings, he says. The company in turn, would get a greater return on investment.
Compare that to swankier systems like Cisco that cater more to the boardrooms at Fortune 500 companies, Ono says "the problem with targeting those customers is that there's only 500 of them."
Still, Ono doesn't regret that Cisco entered the market in late 2006. "It was the best thing that ever happened to us," he says. "We used to always have to work hard to explain to a customer why they would need a service like this. Since Cisco entered, we don't have to do that anymore."
Telanetix's middle ground type of telepresence service is something that could be of interest to carriers. None currently have a telepresence service of their own. Verizon Enterprise Solutions only resells it through vendors such as Cisco, Polycom Inc. (Nasdaq: PLCM), and Tandberg ASA (OSE: TAA) and acknowledges that the high initial cost of the systems are prohibitive. (See Verizon Beefs Up Video Conferencing.)
So while Cisco and others are currently marketing Rolls Royces and Bentleys to customers, Telanetix thinks the future of telepresence is at a Toyota Camry-type of price point. "That's what you're sitting in right now," Ono said to reporters in New York from his office in San Diego.
— Raymond McConville, Reporter, Light Reading