Some interesting developments lately on how high-definition video conferencing is being delivered to businesses. First up is Vidyo. The company is tweaking its video conferencing software so it can run in a virtualized server environment. This will let enterprises or service providers deploy it in data centers or run it in public clouds such as those operated by Amazon and Rackspace.
Server virtualization has been a big trend for more than a year now in PBX development circles. Because the vast majority of PBXs these days are simply software residing on Linux or Windows servers, pairing it with server virtualization technology has been more or less a no-brainer during the year or so that VMware, Citrix and Microsoft have made their hypervisors friendly to real-time communications apps. Benefits range from reduced hardware costs, simpler administration, improved flexibility, and (for the few comms platforms that can take advantage of VMware high availability services) greater reliability.
But to date there hasn't been similar pairing of virtualization and video conferencing technology. This is in part because video conferencing platforms tend to require dedicated hardware-based MCUs to make multipoint conferences possible, and solutions relying heavily on dedicated hardware don’t lend themselves well to server virtualization architectures. Vidyo’s MCU-less solution design, on the other hand, can run with VMware's hypervisor and be deployed in public or private clouds. It’s just a proof of concept project at this point. But it could lead to some interesting developments as service providers adopt virtualized Vidyo solutions as the basis for their cloud-based video conferencing services.
Vidyo and its partners--such as Auralink, Connexus, GlobalComm--are not the only ones preparing cloud-based video conferencing services. Mirial, Vidtel and Nefsis have been offering much the same sort of thing. And LifeSize announced a cloud-based service over the summer. LifeSize Connections is expected to cost $100 per end point per month, or $30 per month per desktop client. It is in beta testing now, is expected to be internationally available by the end of the year, and will eventually replace Mirial’s cloud-based service, which has been part of the LifeSize portfolio since Logitech acquired Mirial a few months back.
Cisco also introduced a cloud-based video conferencing service a couple weeks ago. Re-announced it, rather, since this is the second time Callway has been publicly unveiled. The first was back in March 2010 in the last of Tandberg's pre-Cisco days. The plan was for it to be generally available by the end of that year, but getting acquired by Cisco derailed that particular train. To be perfectly honest, I never gave Callway a second thought after that. I figured Cisco had given it the old heave-ho since Callway is a service that Cisco, not its service provider partners, hosts itself. As it turns out, Callway was simply delayed. Field trials started in late 2010, it entered limited availability in February 2011, and is now generally available. In that time Cisco has expanded availability to Canada (it was to be a US-only offering when Tandberg first announced it) and added support for a wider range of end points have been added.
Offering one's own hosted services is a tack taken by IBM, Interactive Intelligence, Microsoft, Mitel, Siemens Enterprise and, though they don’t draw much attention to it, Avaya. But despite having a platform on which it could easily build communications services hosted in its own data centers, Cisco has been very cautious about positioning itself as a provider of services of the hosted, cloud or SaaS persuasion. When it has launched subscription services they have been in areas that (1) don't really conflict with providers that use Cisco technology as the basis for their own services and (2) help Cisco face off against Microsoft which has its own SaaS offerings. If WebEx is the most successful of Cisco's SaaS offerings, then short-lived Cisco Mail is perhaps the least. The umi video conferencing service for consumers, still around despite articles that say otherwise, falls somewhere in the middle; it’s unclear if Cisco will be able to build a critical mass of customers for it.
With Callway, Cisco is now trying its hand at a hosted video conferencing service for businesses. I suppose the company feels Callway’s SMB focus will help it avoid conflicting with its many partners offering hosted telepresence services based on Cisco technology. Hosted telepresence, after all, costs a bundle, so AT&T, Orange Business and others have their sights firmly set on large enterprises. In the SMB video conferencing services space, Cisco is facing off against Vidtel, a service provider outside the Cisco partner program; LifeSize, a direct competitor in the video conferencing space; and Microsoft, whose Lync Online service will, and Skype assets currently do, provide video conferencing services to SMBs. Will Cisco's new venture into self-hosted video conferencing services for SMBs be a WebEx success or PostPath flop? We’ll just have to wait and see.
Next page: A closer look at Callway pricing
A Closer Look at Callway Pricing
As a sort of postscript, I'd like to take a closer look at Callway pricing. This is because all the articles I've read about it simply repeat the $99 per month figure provided in the press release. In fact $99 buys the Callway customer precious little, and there's plenty of additional information out there that tallies up what the service really costs. Some of these details come from briefings that Cisco provided industry analysts, others from responses to questions I asked Cisco, and still others from the websites of various Callway resellers, such as Adcap, VTCExpress, and MSpace.
As the Cisco press release states, Callway costs $99 per month per end point. That's for the standard service that supports point-to-point calls only and lower bandwidth connections (and presumably lower, less-than-full-HD resolution images). The premium service allows for up to four participants on a call and higher bandwidth connections. That costs $149 per month per end point. A MeetMe video bridge allows six or 12 people on a single call, as well as facilitates video and audio conferences with non-Callway devices. That costs $349 per month for a six-port bridge, or $699 per month for 12 ports.
So a Cisco customer wanting the plain vanilla service for ten end points pays $990 per month. And a customer buying into the full Callway experience--multipoint conferencing, MeetMe bridge and PSTN dial-out--for ten end points is paying $5,070 per month ($149 + $349 + $9 x 10), or $60,840 per year. Plus whatever the service provider charges for the network connections; I didn't try to factor that in.
That's just for the service. It doesn't include the video end points, which must be either bought or leased. While Callway can facilitate calls to non-Cisco standards-based video end points, it must first be deployed with a specific set of Tandberg-heritage video end points. Before the Cisco acquisition, Tandberg had a reputation for having comparably expensive products, and the Callway end points are no exception:
* E20: $1,500 list, $850 street
* EX60: $9000 list, $5200 street plus $1950 for 1080p option
* EX90: $12,800 list, $7300 street plus $1950 for 1080p option, $1300 for dual display option, $1950 for multi display option
* Cisco TelePresence System Codec C20, Profile 42 with C20: $28,500 list
* Cisco TelePresence System Codec C40, Profile 42 with C40: $35,600 list
* Movi (desktop video conferencing client): $120 each for a pack of 25
* Cisco TelePresence PrecisionHD USB Camera for Movi: $519 list, $327 street
Cisco, of course, isn't proposing that an SMB plunk down $8,500 on ten E60 terminals. There's a leasing program in place where the customer pays 3% of the list price. So an E60 would cost the Callway subscriber an extra $45 per month. I've seen an E60 lease price listed as low as $35 per month, so there’s apparently some flexibility. Still, at $35, leasing ten E60s adds $4,200 per year onto the cost of the service. Leasing five E60s, three E90s and two C20s would come out to $37,000 per year.
A different mix of end points will of course yield different results. But however you add it up, it seems like a considerable amount of money to expect an SMB to pay for a video conferencing service. At prices like this, I fear that Callway is not telepresence for masses of SMBs unable to buy expensive video conferencing equipment. Rather it will likely keep high-definition video conferencing well out of the reach of all but the few companies willing to pay a premium for high-definition video conferencing.
