The era of cheap, simple and ubiquitous video communications is a lot closer.
A consortium of telecommunications service providers and equipment maker Polycom has announced a common standard for video interoperability, including database sharing and billing – the kind of thing that makes regular phone calls between different carriers possible.
It is initially aimed at business, but there is no reason why it won’t eventually apply to consumers, too. Businesses have more video equipment, and will pay more, so the carriers are targeting them first. More will follow.
“This opens up and unleashes a huge addressable market,” said Polycom chief executive Andrew Miller. “The service providers want to work with each other and big businesses to create the widest possible video network in the world.” Deployment of services is still several months away, he said, and probably won’t become substantial until 2012.
Besides ease of use and better interoperability among different video calling systems, the technology behind the agreement will allow for a 35%-50% more efficient use of bandwidth, said Miller, whose company designed the software. Miller, a veteran of Cisco, is aiming to take Polycom from its roots selling Web cameras and conference phones, and make it more of a high-margin enterprise software company.
Among the Carriers involved are ATT, Verizon, BT Conferencing, Telefonica, Telstra, Cable&Wireless Worldwide, and about eight others. If the project is successful, others will likely join.
“The ultimate goal is any to any video calling” said Farooq Muzaffer, vice president of networking communications services at Verizon. “Within the next six to 12 months you’ll see a lot more carriers interconnecting.”
In addition, there is no technical reason why Google, Yahoo, or Microsoft (which recently purchased Skype for $8.5 billion) could not join the group. Nor, for that matter, either Hewlett-Packard, which has a high-quality business video conferencing service called Halo, nor Cisco, which last year bought Tandberg to extend its telepresence business. The carriers are leaning to get more hardware providers involved, if only to create pricing pressure on Polycom. [UPDATE: Polycom later announced it is acquiring the Halo assets. Details below.]
Many of these services now can be made to work together, but with uneven quality. Others, like Skype and Halo, are more closed systems, requiring subscribers on both ends. As much as the technology standardization, however, carriers needed to find a way to find and authenticate customers on their own and other carriers’ systems, then at the end of the call figure out billing charges. It is a similar problem in many international calls, but required extensive meetings and architectural reviews.
The Tandberg acquisition was a big reason why the consortium got going, Miller said. “When Cisco bought Tandberg they had to put the Tandberg technology into an open standards body, to avoid antitrust issues,” he said. “That meant we could take it and incorporate it into our equipment.”
In an effort to broaden the use of his company’s software, Miller will seek developers in specialized areas, hoping to bring more video into industries like health care or finance. “This could show up in public kiosks, or in a cart for patient diagnosis in hospitals,” he said. “We’re retooling the company for a more software focused approach.”
The interoperability issue among video carriers is somewhat similar in proprietary Instant Messaging systems, which also await unification among their providers so that someone on, say, Yahoo IM can talk to a Google Chat consumer. The video consortium organized by Polycom incorporates technical standards for the Jingle protocol, used in Google’s IM, and might also be used to unify AOL Instant Messenger, said Sudhakar Ramakrishna, Polycom’s chief technical officer. There are no plans to do that right now, however.
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UPDATE: Polycom also announced it is acquiring HP's Halo assets for an undisclosed sum. It is also expanding its relationship with Microsoft, and declared a 2:1 stock split.
