Web conferencing comes of age

Those who rely on a smile and a handshake to close a deal might never embrace Web conferencing, but for the rest of us - including every stripe of remote worker - the technology is proving a smart way to strengthen collaboration and trim costs.

Web conferencing services raked in US$315 million last year, according to Andrew Nilssen, senior analyst and partner at Wainhouse Research Inc. Nilssen expects the industry to grow 22 percent per year over the next five years, as it moves from "a renegade to a blessed stage."

One reason Nilssen and others take such a bright view of Web conferencing is its ability to help IT managers keep costs in check while offering a range of pricing models. But for firms that haven't tried it, the variety of options can be overwhelming. All players offer a laundry list of collaboration services, such as audio and videoconferencing, application sharing and whiteboarding. But technologies and approaches vary.

Of the pure service providers, WebEx Communications Inc. leads the pack. PlaceWare Inc. and Raindance Communications Inc. offer hosted software services, while IBM Corp., Spectel Inc. and Microsoft Corp. offer enterprise collaboration software. When deciding which route to take, consider your company's size, its current IT infrastructure, and how you plan to use the technology, says Robert Mahowald, research manager of Collaborative Computing at IDC.

While there are no hard-and-fast rules, Mahowald says small and midsize businesses tend to stick with a services-only approach because there is no heavy up-front investment and meetings can be arranged on an ad hoc basis. "Very small businesses don't think strategically, but tactically, and will go after services nine times out of 10," he says.

Yet many large firms are seeing Web services and hosted software offerings as a convenient way to bring together global workers, shave travel costs and strengthen virtual teams. One firm realizing these advantages is global engineering, construction and consulting firm Black & Veatch. The firm has used Raindance's Web Conference Pro service for the last year to help connect its 7,000 global workers - specifically for training and sharing design techniques and 3-D modeling.

"This has really changed the tide in how we do business," says Michael Lamb, director of eBusiness and Internet Services at Black & Veatch Corp. "We've seen significant cost savings, not just in reduced travel costs, but in giving us a different way to collaborate."

Nilssen says firms that plan to use the technology as part of their daily workflow should think about investing in enterprise collaboration software that integrates with other business applications and sits behind the company firewall, giving IT departments "control over their own destiny."

Even so, Black & Veatch preferred to use a conferencing service so it could focus on its business and leave the conferencing capabilities to the experts, Lamb says.

Most major Web conferencing services can transgress company firewalls, and offer security, Nilssen notes, but some industries, such as healthcare, are required to have their data sitting inside the company firewall, making software a better solution.

In the realm of collaboration software, IBM Lotus Sametime stands out. Sametime posted year-over-year revenue growth of 30 percent in 2002, compared with the average 5 percent growth rate reported for other software products, Mahowald says. With more than 8 million users, Nilssen calls Sametime the market's "sleeping giant."

Many believe that Microsoft is gunning for Sametime with its upcoming real-time collaboration product, code-named Greenwich, due out in mid-2003. Greenwich is expected to combine peer-to-peer voice and videoconferencing with instant messaging, one-click e-mail generation, authentication, logging and alerts.

Another sign of Microsoft's plans is its recent bid to buy No. 2 conferencing service provider PlaceWare. Although it comes too late for Microsoft to incorporate PlaceWare's technology into the first iteration of Greenwich, analysts say PlaceWare technologies will make their way into Microsoft products in the next year.

While neither company will comment on the details of the pending deal, the consensus is Microsoft will keep PlaceWare as a service provider.

Ken Myer, director of global business management at Microsoft's Information Worker Product Management group, says that over the long term the company wants to give information workers a communication product that combines popular desktop applications with a variety of collaboration tools, such as voice, video and messaging technologies, which would provide an "answer to workers' frustration of not being able to do all the things they want to do with one application."

Other companies plan to improve their offerings by tightening integration with existing business applications. Raindance this year plans to roll out its new K2 multimedia architecture, which promises to further integrate conferencing features with desktop applications, and allow various participants to make presentations.

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