Videoconferencing for Business

Source: Florida Business & Technology
Florida's Digital Newsmagazine
Title: Meetings Made Easier
Technology Driving Change in Videoconferencing Business

By Jeffrey D. Zbar

Technology is making H. Allen Benowitz change the way he has run his high-tech business for the past eight years.

Benowitz, who runs one of Miami's oldest court reporting firms, established a videoconferencing arm in 1989. He is credited with being one of the first court
reporters to tap the growing demand for taped depositions and computer-aided transcriptions.

Now he is re-tooling Worldwide Videoconferencing. Instead of just offering videoconference services to customers who use his facilities, Benowitz has begun selling equipment to companies that want to run their own videoconferences.

It's a big change-the market is highly competitive, but it seemed necessary in light of technological advances. The price of equipment is coming down, making it possible for companies to set up their own conferencing centers.

Further, advances in PC technology and networks, including the Internet, are making it far easier for companies and people to hold their own videoconferences, right from their desktops.

As Benowitz himself puts it, "With a PC-based system, you have PC functionality in the middle of your audio video conference."

Desktop videoconferencing on a broad basis is probably a ways off, although those TV commercials from MCI suggest otherwise.

Still, it's a far cry from the early days - less than decade ago - when Benowitz ran videoconferences from his downtown Miami offices. He'd bring a lawyer, court reporter, doctor or pharmaceutical rep into his video suite, put them in front of a camera and link them up via satellite with peers or a deposition subject in another studio in another city. His clients include Holland & Knight, Stroock & Stoock & Lavan, Baker & McKenzie, Shutts & Bowen, Vincam Human Resources, Citicorp, J. Walter Thompson, Coopers & Lybrand, and Pediatrix.

The emergence of inexpensive PC hardware with simple videoconferencing attachments has forced Benowitz to change his business model. The new advances have begun to make videoconferencing, or at least video calls, available to a wider audience. The PC industry also has pushed "open standards" for the technology that have made it easier for different PC's and video systems to work together.

While there still are bugs in the systems, videoconferencing has become a more affordable option for small and mid-sized businesses. Consider that Worldwide, which charged $650 an hour a few years ago, now charges as little as $325 an hour today, depending upon bandwith, services and number of sites included in a videoconference.

Those $650-per-hour fees reflected the high cost of entering the business. When Benowitz launched Worldwide Videoconferencing and the LINC Videoconference Network, or Legal Image Network Communications, a court reporting videoconference association, to band together a slew of host sites around the country, a single conference center cost upward of $100,000. And it still takes two sites to create a conference.

With prices down, more players are getting into the act. Industry statistics reflect what is happening. At the end of 1995, sales of videoconferencing systems had increased to $2.42 billion, up 58 percent from $1.53 billion in 1994, says Benowitz, whose company experienced a burst of activity this year. "It seems like the world has awakened to it overnight."

"This used to be something just for Fortune 100 corporations," adds Jim Perretty, vice president with Boca Raton-based Stratosphere Multimedia Corp., another videoconferencing firm that competes with Benowitz.

Benowitz, who started out in 1989 by specializing in legal, medical and corporate videoconferencing, says he has not experienced a significant drop in business; in fact, he says 1996 revenue was up 50 percent, although he won't release numbers.

But, since January, Worldwide Videoconferencing has been selling equipment and servicing it on behalf of businesses setting up their own facilities.

The company represents systems such as VTEL, Sony and PictureTel, which was considered the industry leader, until standards-based platforms opened up its technology to others. VTEL, for example, offers an upgradable PC-based, application-specific system designed for medium-to large- businesses. The company, whose product works with LANs and the Internet with its Windows 95 graphical interface, is ideal for telemedicine, legal, banking, and finance because it allows for imaging. VTEL has since garnered upward of 55 percent of the telemedicine market, says Benowitz, PictureTel, meanwhile, offers a product ideal for small and large businesses.

The switch in strategy poses an interesting question for a 55-year-old Brooklyn native. Will the desire to sell equipment cannibalize the business he now offers at his own facilities?

Benowitz doesn't believe that will be the case. He sees what he is doing as just another advance, similar to what happened when he began using videoconferencing to take depositions-a strategy that could have cut into his core business but didn't, thanks mainly to overall demand for a wider range of services.

Manufacturers themselves are not yet convinced that even PC-based systems are the near-term answer or competition for dedicated videoconferencing companies. Though Sony offers a stand-alone system that can be used within a large office environment as desktop videoconferencing over a LAN, WAN or private intranet, a single station starts at $21,500, says Roger Ralston, director of sales MPC Business Communications, a Pompano Beach-based distributor of Sony videoconferencing systems in Florida.

Mr. Benowitz' company is a co-marketing partner with VTEL, PictureTel and Sony in the sale of videoconference systems through its resellers, such as MPC.

Sure, the price has dropped in recent years, and the Sony system requires only one high-speed line to conference with no lag time. The Sony system even has a built-in "quartet" feature that can create a conference call between four sites and present it in a "Hollywood Squares" image upon screen, says Ralston.

"People are buying it for themselves instead of going to centers," Ralston says. But, he adds, "It's still a large investment to get started."

Benowitz himself is not convinced that off-the-shelf, store-bought systems are without limitation, most pressing of which is the lack of bandwidth. Assuming the systems meet certain transmissions standards, the "myth" of desktop videoconferencing still will frustrate people, he says. Even with applications that double transmission speeds, "it's still not ISDN," Benowitz says.

"They'll say, 'Hey, I have a $600 software program, I'm into videoconferencing.' The reality is it's 'Max Headroom,' with between two and seven frames per second," says Benowitz. Television and traditional video spins at between 25 and 30 frames a second. "But people get disappointed when they don't have what they expect. If you're going to share documents, voice and video, you've got to have bandwidth," he says.