The Future of Office Meetings
A year ago, firms didn't have much incentive to update their video-conferencing technology.

Small businesses with small budgets would opt for a Web cam instead of the low-quality conferencing setup their budgets would allow.

With the advent of high-definition TV over the past year, however, companies selling video-conferencing solutions are penetrating smaller markets for the first time.

"High-definition video communications over IP networks will be the most important growth area in communications technology over the next decade," says Craig Malloy, CEO of Austin-based LifeSize Communications , a manufacturer of high-definition video products.

Fortune 500 and 1000 companies like Conoco Phillips ( COP), Lockheed Martin ( LMT) and Deutsche Bank ( DB), all LifeSize clients, have been upgrading five-year-old low-resolution systems since high-definition became the norm, says Malloy.

Malloy feels this is an untapped market opportunity. LifeSize and the major industry players like Polycom ( PLCM), with its VSX product line, and Cisco ( CSCO) will no doubt be reaping the benefits of this rapidly expanding market.

Video for Everyone

Like color television, high-definition television and DVD players have done in the past, video-conferencing technology is extending its reach beyond the business elite. Small and midrange businesses have up until now had less than 1% market penetration, says Malloy. But "the technology is going downstream," he adds. "There's been a big shift with high definition ... Smaller companies can afford it and larger companies are updating."

In response to this rapidly expanding industry, LifeSize today announces its high-definition LifeSize Express. At 30 frames per second and $6,000, "it's perfect for small and medium businesses and any other company that'd like to put its toe in HD water without making a big commitment to the technology," says Malloy.

Fully standards-compliant, Express can interoperate with nearly any videoconferencing system built within the last seven years. It offers the same quality audio and video as telepresence solutions like Hewlett- Packard's ( HPQ) Halo, but without Halo's initial cost of about $550,000 and monthly service fees of about $18,000.

"That's why we've spent five years developing a technology to fit into a package at this cost point," says Malloy.

Salud Family Health Centers , a nonprofit health center with 14 clinics across Colorado, implemented 11 of LifeSize's flagship Room systems around $12,000 each, which allow video calls with multiple participants, about a year ago.

"It used to take two hours to drive to the farthest clinic," says Eric Perlinger of Salud's IT department. But with the health center's new video-conferencing capability, they recently trained a new employee remotely and Perlinger estimates they use the rooms at least every other week for meetings.

Salud was looking for a crisp image with excellent audio and simplicity of use, says Bob Dinegar of RJ Macklin Associates, a LifeSize channel partner. "LifeSize was the only high definition offering on the market," he says.

"Everyone should get one," he tells me. "It's not only for clinics. I want to work from home like this."

Perlinger says they've had to replace a camera and microphone on one unit, but issues with the system never went beyond what he calls, "typical IT issues." He sees a filtering down of video technology to more businesses.

In fact, 30% of LifeSize's clients this year were new to the video conferencing community. If lower cost and higher quality offerings from LifeSize are any indication, video conferencing could soon be a standard instead of a luxury.