Here’s my reply to this Business Week article:
Proprietary technologies from Cisco, Polycom and others will likely remain in a niche market, because mass-market telepresence adoption, like the phone system before it, depends on Metcalfe’s law. Metcalfe stated that “the value of a telecommunications network is proportional to the square of the number of connected users of the system.”
That means free services like Skype and FaceTime, which reply on open standards, can provide value that increases exponentially as they scale to far more users. Yes, their video quality is limited by network speed, but as bandwidth increases they will soon support HDTV resolutions. They’ll also adjust resolution automatically to match network speed so the same software can be used for low- or high-res video calls, depending on who you’re calling and where.
Already companies like Lifesize Communications deliver HD video quality in telepresence systems for small businesses and home offices. They only need 1Mbps of bandwidth in both directions, so Cisco is on the right track with Umi, and if anything is scrambling to catch up.
Cisco likely sees the futility of its proprietary designs. Rather than building or renting a $200,000 telepresence suite with multiple HDTV screens, each with high bandwidth requirements, it seems more prudent to invest in systems that can sense who is speaking and automatically display their image onto a single PC video screen in HD.