Videoconferencing helps companies cut travel costs
— -- Ben Weinberger, chief information officer of a law firm, typically travels about 25 times a year visiting colleagues around the country to make sure their information technology systems are working properly.
His employer, Lathrop & Gage, has 11 offices and 300 attorneys. But Weinberger estimates he will travel only once this year to each office, relying instead on videoconferencing from the main office in Kansas City.
The firm has six dedicated videoconference rooms there, with high-definition cameras, 47-inch or larger monitors, and software provided by California-based Polycom, a large videoconferencing equipment supplier.
"You don't have a meal with your colleagues videoconferencing," Weinberger says. "But I can save tens of thousands of dollars. If I go to the New York office only once, instead of going three times a year, I save the firm $3,000 (on airfare and hotels), and that's just me."
In a development that has airlines and hotels spooked, more companies are starting to agree with Weinberger's assessment. In 2008, the global videoconferencing market grew 24% to $2.4 billion, according to Roopam Jain, a technology analyst at Frost & Sullivan. The firm forecasts the market will more than double, to reach $5.7 billion by 2013.
Cisco, which uses its own videoconference equipment, says it cut annualized travel expenses by two-thirds in its most recent quarter, from $750 million to $250 million. TNT, a courier service company in Europe, saved about $16 million in the last three years by using videoconferencing, according to Norway-based Tandberg, which supplies TNT's systems.
"Change in the economic environment has led to (companies) reducing travel, and that has played well for the videoconference industry," Jain says.
Innovation spurs market
Rudimentary videoconferencing has been around since the 1980s, when digital telephone networks became possible.
Consumers began to embrace PC-based video-chat services from Microsoft, Yahoo, Skype and others once technology emerged to compress video files for quicker transmission. Newer entrants such as OoVoo focus on consumer video chats that can also be used in business settings.
