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Picking Up Steam
Conferencing Industry Could Blow its Top Over New Advances

By Fred Dawson

A trickle of activity generated by Internet telephony service providers (ITSPs) looking to exploit the conferencing power of Internet protocol (IP) telecommunications platforms quickly could reach flood stage in the wake of technical advances slated to enter the market later this year and in early 1999.

With ITSP experience limited to a handful of recently launched applications, there's not much market hoopla surrounding public network-supported H.323-based video- and audioconferencing services. But products under development among leading providers of conference-oriented software and hardware make clear that the low-cost, high-margin conferencing service businesses now in sway at Cupertino, Calif.-based Concentric Networks Inc. (www.concentric.net) and Houston-based Networks On-Line Inc. (NOL) (www.nol.net), and undergoing beta trials at several other ITSPs, are a harbinger of things to come at fairly massive market scales.

"I describe this market as the oldest emerging market there is," says Michelle Blank, president of Yahweh, N.J.-based RADVision Inc. (www.radvision.com), a leading supplier of H.323 gateway and other applications software and hardware. "But it's finally going to enjoy broader-based adoption, because there's a compelling [return on investment] for businesses in terms of support for team collaboration, savings on costs of travel and savings against other forms of conferencing."

RADVision is planning to announce new extensions of its software based on version 2 of H.323 that will facilitate smoother interfacing of legacy H.320, circuit-based packet videoconferencing systems with the IP domain significantly reducing the administrative workload associated with dual-protocol conferencing, Blank says.

Rather than waiting for such capabilities to be standardized in version 3, which is due to be finalized early next year, several unnamed vendors will support the RADVision extensions with interoperable products, she adds, noting that this should make adaptation to H.323 conferencing much easier for the market segment that is most accustomed to using conferencing services.

NOL, an ITSP subsidiary of Comtech Consolidation Group Inc., believes surging public acceptance of Southwestern Bell's integrated services digital network (ISDN) service across NOL's 400-mile-wide service area will spur demand for the videoconferencing services it launched in early July, including long-term leasing and per-hour rental of "virtual conference rooms," and customer facilities-based service.

A Growing Force

"We're seeing more than tire kickers; we're seeing people willing to pay for services," says Don Brown, executive vice president of NOL. As a company already offering H.323 telephone service in partnership with global IP carrier GRIC Communications Inc. (www.gric.com), NOL views conferencing as the logical next step to creating a compelling bundle of communications services, Brown says.

"I definitely see it becoming an appealing service, especially in light of the growing acceptance of ISDN in our area and the low costs of implementing H.323 technology," he notes, adding that, at $5 per hour, the rented virtual conference room generates a profit margin of 80 percent.

While wide-scale public network launches of H.323 conferencing services may be several months away, the ongoing refinements in version 2 of the H.323 standard, which have sparked broader acceptance of IP telephony in general this year, already are driving wider use of conferencing applications over private networks of large enterprises and institutions.

"What we've found is that this is an 'ah-ha' kind of sell where, once people get firsthand experience with the applications, the light goes on," says Bryan Katz, general manager of IP business development at Murray Hill, N.J.-based Lucent Technologies Inc. (www.lucent.com).

A major force behind the appeal of IP conferencing is the growing use of collaborative computing technology, Katz notes. "When Microsoft began distributing [its application sharing software] NetMeeting at no charge, people got familiar with it and began putting it to use, which created a demand for audio- and videoconferencing links over the data networks," he says.

With installations of H.323 gateways, corporations are able to extend conferencing to road warriors and branch offices who link in via switched circuit lines, adds Eric Newman, group product manager for DataBeam Corp.(www.databeam.com), a supplier of products supporting shared computing that wrote many of the key algorithms for the T.120 multipoint whiteboarding and data collaboration standard. "You want this technology to be able to interwork with the telephone network already in place," Newman notes. "That's what H.323 is all about."

Market acclimation to the advantages of collaborative computing has spawned vendor development of even more application-specific tools, Newman adds. "We're seeing not just generic business conference tools like NetMeeting, but very specialized products for telemedicine, distance learning and other segments--really compelling applications that people are buying into," he says.

Forrest Milkowski, co-founder of Nashua, N.H.-based White Pine Software Inc. (www.wpine.com), which recently licensed T.120 technology from Labtam Communications, Victoria, Australia (www. cst.com.au), makes much the same point. He says White Pine has seen a dramatic reduction in the customer evaluation cycle for its H.323-based software with the introduction of ClassPoint, a corporate training/distance learning product that combines web browsing with the real-time audio, video, text chat, application-sharing and whiteboarding components of its CU-SeeMe client and MeetingPoint gateway server products in a way that is directly suited to the needs of group instruction.

"We're seeing 45- to 60-day sales cycles vs. the three to six months we've typically experienced with our more generic products," Milkowski says. "Now we're looking at application tools for other markets, such as telemedicine, where there's a direct productivity benefit through collaboration that goes beyond audio- and videoconferencing."

A Raging Stream

Another phenomenon working in sync with collaborative computing to drive demand for conferencing capabilities in the data stream is the raging success of virtual private network (VPN) technology, where software employing IP point-to-point tunneling protocol (PPTP) and other innovations extends the advantages of private networking to even the smallest companies. These tools, because they open private network connectivity to all business market sectors, are one of the fastest growing segments of Internet technology, with a potential to grow from a little less than $200 million in system and service revenues last year to more than $11 billion by 2001, according to San Jose, Calif.-based Infonetics Research Inc. (www.infonetics.com/ind.htm). AT&T Corp. (www.att.com), now offering a VPN service which it says saves a typical 1,000-user company up to $60,000 per month against private-line costs, says it expects the VPN market to be $10 billion to $20 billion by 2001.

VPN technology also is vital to opening up the telecommuting market, especially as ISDN and higher-speed access capabilities, such as asymmetrical digital subscriber line (ADSL), bring local area network (LAN)-quality data throughput to the professional at home. In one sign of the growing potential of VPNs in conjunction with telecommuting, Bell Atlantic Corp. (www.bellatlantic.com) has four trials of ADSL service under way, three of which are telecommuting trials, says spokesman Larry Plumb. "We see this as a really important new market," he says.

As a result of such capabilities, companies are finding many ways to make use of IP conferencing in conjunction with collaborative computing, from small workgroup settings to large-scale meetings and training sessions across the wide area to off-premises interactions with customers. For example, The Goldman Sachs Group L.A. (www.goldmansachs.com) which, in the past, has gone so far as to buy proprietary videoconference systems for clients "to be in front of them as often as possible," now can shift to standards-based IP systems, greatly extending its conferencing flexibility both inside and outside the company, notes Dennis Murphy, vice president of enterprise technology at the Wall Street firm.

"The highlight of H.323 has been the addition of H.263, which is the video algorithm," Murphy says, adding there's a "real killer of difference" between the performance of H.263 next to older video-over-circuit-line systems. Eventually, high-speed access links will make the video component even more compelling for companies like Goldman Sachs, he adds.

"What you need to have is virtual meeting rooms, whether you're in the airport with your laptop, at the office or in the conference room, without having to wonder whether everything will work," he says.

Pooling Intelligence

The need to accommodate a far-flung user base with flexible, easy-to-activate conferencing capabilities has prompted Lockheed Martin Corp.'s Tactical Aircraft Systems group (www.lmtas.com) to install an H.323 system, supplied by Lucent, in conjunction with the design of the new Joint Strike Fighter jet jointly commissioned by the U.S. Air Force, Navy and Marines and the British Royal Navy. With a need to coordinate engineering, manufacturing development and production across myriad locations here and in Britain, mixed-media conferencing is essential to keeping the project coherent and on schedule, notes Richard Cox, Lockheed Martin's virtual enterprise coordinator.

"These companies [participating in the project] share services and help each other with design problems so there's a need for us to be a virtual company," Cox says. "The old way, using room-based video teleconferencing, is an expensive, often time-constrained way to collaborate, and it doesn't lend itself to impromptu meetings."

Along with solutions for high-end customers, vendors are moving to make H.323 conferencing affordable for small companies as well. "Even small companies have sales forces out on the road and branch offices in different locations where there's a real need for collaboration and conferencing, if they could afford it," says Donald Brown, president and CEO of Interactive Intelligence Inc. (www.inter-intelli.com), an Indianapolis-based supplier of H.323-based software.

Brown's company has developed a Windows NT-based communications system--the Enterprise Interaction Server--that unifies the processing of telephony, fax, e-mail and Internet interactions within the corporate networking environment and, with the latest iteration, adds an H.323 gateway for support of audioconferencing that links the internal and external circuit networks with the LAN.

Operating on a Dialogic Corp. (www.dialogic.com) DM3 IPLink card, the H.323 component allows companies to set up and manage conferences at very low costs, Brown says. He stresses that while videoconferencing is intrinsic to H.323 technology, the combination of audioconferencing and collaborative computing in low-bandwidth environments is, in itself, an extremely compelling application that offers ITSPs opportunities they can exploit without waiting for high-speed lines to open up.

"We didn't start out planning to supply service providers, but competitive local exchange carriers (CLECs) began coming to us for low-cost solutions supporting integrated messaging services, and now they're interested in the conferencing component of our technology as well," he says.

Audio is the primary conferencing requirement; video is secondary, agrees White Pine's Milkowski, noting that this fact minimizes the bandwidth factor as an impediment to ITSP involvement. "As private companies explore the use of collaborative computing with conferencing, ISPs are saying, 'You're already buying service from us, so let us supply you with conferencing services along with your VPN,'" he says.

Concentric, WorldCom Inc. (www.wcom.com) UUNet (www.uunet.net), Time Warner Inc.'s (www.pathfinder.com) cable data operation and America Online Inc.(www.aol.com) are among the large service providers now market-testing the low-end conferencing solutions supported by White Pine's software, according to company documents.

White Pine has developed a number of means to reduce management hassles for conferencing, whether operations are handled on premises or off. For example, Milkowski notes, the firm's MeetingPoint software, which works with any H.323-compliant client, supports "audio switching," where the document referenced by the person talking--and also the person's image if video is involved--is automatically displayed on the screens of participating parties. And, he adds, the software can manage bandwidth allocations to fit the access speeds of individual users.

Under One Umbrella

But virtually everyone recognizes the videoconferencing component of H.323 looms as a major market driver as bandwidth opens up and the fluidity between H.323 and legacy H.32O systems improves. Through an affiliation with international telecom provider Telecom Italia (www.telecomitalia.it), Concentric is concentrating on high-end customers with the conferencing service it launched a year ago. By using the RADVision Video Interface Unit to link customers' legacy H.320 systems, Concentric makes use of these big companies' T1 data links to the ITSP's asynchronous transfer mode (ATM) backbone to expand the reach of end-to-end, high-quality videoconferencing and collaborative computing at costs well below the costs of paying for ISDN lines and additional H.320 facilities, says Will Layton, senior network engineer at Concentric.

"We provide customers direct and seamless access to the RADVision H.323/H.320 gateways built into our network," he notes.

Bay Networks Inc. (www.baynetworks.com), one of Concentric's first conferencing customers, has about 500 people using videoconferencing each day and has found the Concentric service is "much more affordable" than continued reliance on ISDN connectivity for its H.320 system, says Piere Pellissier, network manager at Bay. And, he adds, "The quality of IP video through the Concentric network is better than any of our other existing ISDN-based video systems."

Large enterprise and ITSP demand for large-scale confer-encing solutions is driving vendors to expand the capacity of their H.323 gateway-to-H.320 components. Lucent, for example, will bring out a more scalable version of its Multi-media Communications Exchange (MMCX) Server early next year, Katz notes, adding, "We're being tested by several service providers."

The MMCX, an Internet call center with 500 ports, also will become easier to use in con-junction with H.320 systems, simplifying session management tasks such as the allocation of encoding algorithms for specific users across the two conferencing domains, Katz says. With such gains in the offing, he adds, the real gating issue for service providers and system vendors alike is market familiarity with the benefits of integrated data and conferencing applications. "People need exposure to the capabilities," Katz says.

Fred Dawson is a contributor to Sounding Board magazine.