High Travel Prices Leading to More Web and Video Conferencing

With the cost of airfare going up, more companies have begun looking into video conferencing to see each other in real time time and web conferencing software to help them do it, according to analysts and vendors in the online conferencing market.

By C.G. Lynch
Mon, August 11, 2008

CIO — Though high fuel prices have dipped in recent days, airlines are preparing for tough days ahead by cutting routes to certain cities, adding fees for luggage, food and pillows, and warning of fare hikes ahead.

This reality has led to more companies to purchase video conferencing and virtual meeting software for employees and customers to communicate with one another in real time, according to vendors and analysts familiar with the market.

"Up until now, business travel has been a cultural thing. People say, 'I have a meeting, so I have to go there,'" says says Claire Schooley, a Forrester analyst that researches video conferencing technologies. "Because of the expense, and the wear and tear traveling has on people, that seems to be changing."

In the end, the gravitation towards video conference and meeting software will be purely economical. A recent report by the Travel Industry Association found that air prices in June rose 18.7 percent from the same period a year earlier. Fuel prices were up 33 percent. Airlines, desperate to fill seats, have been running routes with heavy losses, and their ability to do so will wane during the coming year, airlines executives told National Public Radio.

Businesses, who have also been dealing with an economy in recession, have begun responding by tightening travel budgets. Orbitz, the popular travel site, surveyed more than 600 business managers, 79 percent of whom said they felt pressure to cut their travel budgets.

Due to the economic factors and improvements in image quality, the vendor landscape around virtual meeting products and video conferencing software has matured during the past year, says Forrester's Schooley. While there are numerous offerings, it's essentially broken into two categories. One is the high end video conferences offered by vendors such as Cisco, known now as telepresence. Telepresence involves setting up huge flat screen televisions in high-definition (HD), where attendees appear life size to one another (see CIO's feature on telepresence here).

But telepresence is expensive. Cisco charges more than $300,000 for an installation. So lower cost alternatives have begun to gain traction in the market, even some developed on open source technology. The Boston-based Dimdim is one such alternative.

Dimdim provides a Web-based portal in which meeting participants can share and interact with documents, and view each other through video if their computers have a web cam. The package of software is known as web-conferencing.

Continue Reading

Our Commenting Policies