Rising transportation costs and concerns about social and environmental responsibility are spurring corporate demand for videoconferencing, collaborative software and virtual telepresence technology. Wider access to broadband Internet is a key enabler.
Changes in business and social attitudes toward air travel are also contributing to rising demand.
One videoconferencing company, Eyenetwork, has seen its business grow about tenfold in less than five years. The company, which arranges professional videoconferencing services for business clients, has seen its bookings grow from 1,500 to 15,000 between 2003 and 2008.
Just over 8,000 small and medium-sized businesses have opened accounts and more than 40,000 people have participated in virtual, videconferenced meetings through HearMe, a B2B videoconferencing service launched by PalTalk, since its launch in January 2007.
Genesis of a Videoconferencing Agency
Skepticism and technological mistrust, along with tightly held travel perquisites and generous dollops of frequent-flier miles, held back uptake early on, but business conditions, technology and corporate and social attitudes have all changed in recent years. The result has been greater demand from corporations for videoconferencing services, said Jane Wrin, Eyenetwork’s operations director.
Starting out in 1996 as The Videoconference Board, what is now Eyenetwork was one of the first businesses dedicated to providing public access videoconferences in Europe. By 1999, individual member company directors were convinced of the viability of the business and of the advantages they could gain by joining together to broker Internet videoconferencing services through one central service, Wrin recounted.
Expanding Internet access and technological advances in supporting Internet technology were the key factors that have led to Eyenetwork’s success. “The one absolutely essential factor in growth was the Internet; finding new bureaus and communicating to clients would have been very slow without it. As more and more companies started to use the Internet daily, the interest not only in more international business but technology increased,” Wrin told the E-Commerce Times.
Environmental Concerns and the Hassles of Air Travel
Eyenetwork initially had to weather and overcome technological skepticism and reticence to reduce air travel when it began offering to arrange videoconfereing services to corporate clients. A variety of factors have changed for the better since then, according to Wrin.
“The hard benefits of cost have always been easy to list: taxi, ticket, hotel, salary. With 12 airlines going broke in just the last six 6 months, the price of oil has now been added to those cost considerations.
“What has taken years for many to understand are the environmental factors. Carbon penalty taxes are being introduced in many countries to encourage companies to consider an alternative to travel; I have no doubt that this will have a huge impact and greatly increase the number of companies choosing to videoconference rather than fly.”
Added to the above are the soft benefits, Wrin added, namely the increased hassles and wear-and-tear of air travel. “A flight involves traveling to an airport, going through security, airline food, accommodation, possible jet lag and then finally the meeting before repeating all the traveling again.”
Coming Up from the Retail End
While Eyenetwork is moving from the enterprise downscale to the consumer end of the videoconferencing services market, PalTalk is moving in the opposite direction. With its PalTalk software and service a success in the retail marketplace, the company in January 2007 entered the B2B end of the market with the launch of its HearMe B2B software and service.
PalTalk owns more than 10 patents related to Internet videoconferencing technology, the most significant related to multicasting technology. “We don’t use P2P (peer-to-peer); we’re using a centralized server on the video.
The company’s consumer videoconferencing service has proven to be a big hit. PalTalk can boast of having about 4 million active users each month — active defined as having logged in at least once in 30 days.
At any one time there are around 5,000 PalTalk conference “rooms” open, peak usage typically occurring around 5 p.m. EST when around 70,000 users are online at one time, according to Gore.
Salvaging & Reclaiming Technology from the Financial Dustbin
The company’s roots go back to the unfulfilled need for a service PalTalk founder Jason Katz realized in the late ’90s when he was trying to juggle an infant on his lap and text-based instant messaging communications via a keyboard. Katz, originally an attorney by training, hired a developer and together they built and launched the Internet’s first audio/text IM application. Video was added in 2000, Gore recounted.
The integrated audio-video application started out as a one-to-one service and then, taking a cue from user feedback, morphed into a one-to-many, “large-scale group video chat,” he continued.
PalTalk bought HearMe’s assets out of bankruptcy. The company probably had a market cap in the hundreds of million dollars and folded when PalTalk founder Jason Katz spotted and zoomed in on it.
“People started using it [PalTalk] as a HearMe tool and we started hearing from them,” VP of marketing Matt Gore told the E-Commerce Times. “We saw the need probably back in 2000 or so for a business product,” he recounted.
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