Videoconferencing cuts $150m off Cisco's travel bill

Networking giant Cisco has slashed $150m off its corporate travel costs by using its own high-end videoconferencing technology.

Speaking at the company's annual Networkers conference in Anaheim, California this week Cisco CEO John Chambers said the TelePresence videoconferencing technology has now been used internally for 10,000 virtual meetings.

TelePresence uses three 65-inch HD displays in a specially built room to create a more realistic videoconference where everyone present appears life-size around the table. It is a similar set up to the rival Halo technology from HP.

The technology doesn't come cheap, however, and weighs in at around $300,000 plus communications costs for each fully kitted-out TelePresence room.

But Chambers said: "At first when you look at it the systems are expensive. On the other hand when you look at your payback they usually pay back on travel alone in less than a year. I can pay for the product in the first year by a factor of two versus what it cost me. I guarantee I got $150m savings because I already took it out of everyone's budget."

We've run numbers on the reduction in travel expense and we think a corporate client could easily run a business case on TelePresence just on that basis. We certainly can.

-- Stephen Moore, programme director of IT and services at Regus

One of the first big customers is managed office space company Regus, which is in final contract negotiations with Cisco to roll TelePresence out across 50 of its sites around the world. The first phase of the rollout will see Regus using the videoconferencing technology internally.

Stephen Moore, programme director of IT and services at Regus, told silicon.com: "Like any other company we are trying to keep our travel costs down - we are a very fragmented organisation by the nature of our business with managers in 950 different locations. It will make it a lot easier for Regus managers to do business with each other. We've run numbers on the reduction in travel expense and we think a corporate client could easily run a business case on TelePresence just on that basis. We certainly can."

The second phase will involve Cisco's customers, so that Cisco TelePresence customers will be able to direct their partners, suppliers or customers who don't have the videoconferencing technology to a local Regus site if they want to set up a virtual meeting.

Regus will also offer the videoconferencing service to its own customers, targeting the small and medium-sized business market. No firm pricing has been set but it is expected to be in the range of $300 to $500 per hour for a Regus-managed TelePresence room.

Moore said bandwidth is one of the biggest issues for installing the technology.

He said: "The key for us is we have got to get the bandwidth into our centres and the rooms require quite a lot of remediation work. We were installing lots of bandwidth into all of our centres anyway so we can leverage that but TelePresence alone needs 15MB per site with class of service, and that's the challenge for us."