If you haven't heard by now, Cisco made a mid-week announcement of its plan to acquire Norwegian company Tandberg, a maker of specialized equipment and software for videoconferencing. To put it succinctly, videoconferencing allows a large company to conduct meetings without having to factor in mundane limitations such as physical distance.
You can find out more about the deal from our report here. Now, while I have seen Tandberg at various enterprise trade shows and conferences, I confess that I have never seriously considered--nor have I been in a position to appreciate--the convenience that its solutions give to enterprises that require executives to meet on a regular basis.
The news of the deal got me thinking--not about the $3 billion acquisition price, or the fact that Cisco is now the leader in video conferencing solutions--about how such a niche product could grow a multi-billion dollar company.
Purpose-built hardware
On one hand, it is not as if the technology behind videoconferencing represents any kind of revolutionary breakthrough. The display screens, video compression, network transmission, and even the technology behind the unidirectional microphones are already in wide-spread use and generally well-understood.
In fact, a hard-pressed techie could probably have rolled-out a simplistic version of lower-end videoconferencing solutions on a PC using a run-of-the-mill digital camera and Instant Messaging software.
So what is it about the devices made by Tandberg that makes it so attractive to the enterprise? It is the idea that purpose-built devices will triumph at large organizations. With more than 500 staffers, the organization has adopted the novel idea of implementing VoIP for all using software clients to run on individual workstations. With a pervasive WLAN already in place, not having to install any phone and Ethernet cabling allowed the organization to rake in substantial savings.
Unfortunately, the pick-up rate for phone calls proved to be dismal. In many cases, many staffers simply disregarded the VoIP software, or did not even bothering to run it.
Time to bring back the landlines, perhaps?
Cost and convenience are the keys
Before one subscribes to the idea that non purpose-built devices can result in a failure however, it is prudent to consider the runaway success of Skype. Hardware telephony devices with built-in support for Skype can be found on the market now, though Skype experienced its success as a software client that runs on a Windows PC.
The company grew exponentially as users flocked to the service, attracted by the savings inherent to VoIP calls - in contrast to the exorbitant rates offered by the various Telcos.
In the final analysis, I feel that it is really not a question of whether a purpose-built device will succeed or not. Even from the simple illustrations above, it is clear that convenience and cost savings are really the key attributes in the consideration of what will work.
A videoconferencing solution works because it is more convenient for executives than trying to do a video-chat via IM. Forcing staffers to work with a VoIP soft-client doesn't work because there is no convenience or cost savings; yet Skype works because it allows its users to save money.
What is your opinion on this topic? I look forward to hearing from you about this.