In The News
2005-10-03
LifeSize Promises to Shake Up Videoconferencing Industry
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LifeSize Communications of Austin, Texas, promises to shake up the global videoconferencing industry with the first high-definition video communications system. They're also offering a big improvement in conferencing audio.
The folks behind LifeSize know the technologies, markets and distribution issues of this sector because Craig Molloy and Michael Kenoyer founded ViaVideo Communications. They then worked at conferencing big shot Polycom, after that company acquired ViaVideo in 1997. Kenoyer and Malloy bailed out of Polycom to start LifeSize.
Their new company's technology is releasing a room system (end user price US$12,000) and a desktop unit (US$8,000) that offer 1280 x 720 resolution images at 30fps. The current standard for today's videoconferencing codecs is 325 x 288 - painfully low-res.
The experience of the LifeSize founders is reflected in the launch strategy. First, their engineers have developed a unique chain of hardware and software components. These technologies allow the LifeSize HD systems to operate on conventional corporate phone lines and Internet broadband. The software also makes LifeSize systems able to work with legacy videoconferencing equipment.
Second, the LifeSize principals know well that over distribution and channel stuffing have long hurt profits in this sector. They are taking a completely fresh approach to channel relationships in these markets worldwide.
Senior Editor Philip Gallagher quizzed Craig Malloy, CEO of LifeSize, on the company's promise when he was in London for the AV in the City show.
What industries are you targeting for your HD systems?
Malloy: Here in London we have a large number of banks. Among our beta customers were J.P. Morgan, Credit Suisse First Boston and Deutsche Bank. Looking worldwide the top two industries are financial and higher education, with their Internet2 networks. We also see prospects in pharmaceuticals, high-technology, telecommunications and even entertainment.
Your LifeSize systems will offer 10 times the quality of existing solutions. How will high definition change the way we conduct business?
From our target industries you can begin to see where this is going. If, say, you want to show some advertising animation to partners elsewhere in the world, you can play it from a DVD via LifeSize so they can give you their comments and suggestions. Until now you couldn't use videoconferencing for that because you couldn't see the details.
In the U.S. we have fashion designers who are working between New York and Milan. Our system lets them see the quality of the seams, the texture of the fabric so they can make decisions without sending samples across the Atlantic.
Another example, retail. A store buyer can check the quality of, say, towels offered by a supplier in Asia. That saves samples being sent and even a trip overseas.
So this technology can help businesses work faster and boost productivity.
LifeSize kit is for users with a specific need for the superior detail provided by HD?
No, not really. If you could get ten times the quality for about the same price, why wouldn't you? So it's not just about HD. It's about better quality at all bandwidths, better than anything that's on the market today at about the same price. If you could get an HDTV at the same price as a regular TV, would you still buy a regular TV? You wouldn't.
You've appointed five resellers in the UK*. The videoconferencing sector has undershot revenue projections because of over distribution. With this new HD-based system why five resellers and not, say, three?
* Direct Visual, Focus 21, NIAD, nuVIDEO, Questmark
The UK is a relatively large fast growing market and the five resellers all focus on different verticals or different geographies. In most countries we will have one reseller. Though in France we have Genedis/Hypcom as a distributor that will also serve resellers in southern Europe. We have one reseller each in Germany, Norway and Russia. Outside Europe we have resellers in the U.S. of course, plus Japan and China. Today we have 29 resellers worldwide.
Our competitors have hundreds of resellers. We have a strategy not to over distribute but to "right distribute." This will allow our partners to make more money. So sales people will get better support, they will get money to invest in marketing, sales and service. Our partners mirror our own values of customer service and support. They are people who actually answer their phones.
Tell us some more about your "right distribution" strategy.
In addition to having next generation products we want to focus on channel intensity and build tools and partnerships that are going to accomplish meeting our goals.
We have spent a large amount of time and money creating our custom Channel Partner Program. We've developed this for our partners using a Salesforce.com application for front office functions and Oracle for the back office.
The LifeSize Partner Support allows all partners and their sales reps to come to a website and get leads that we have qualified. We pass these leads to our partners through Salesforce.com. They get sent a link to the lead and after they click on that lead no one else in the Channel Partner Program can select it. Partners can make orders and they can check the status of their orders. They can put in support trouble tickets. You can see how serious we are about support -- anytime an end-user or partner puts in a trouble ticket about a product, Marketing VP Munira Fareed and I also get a copy. We know if any reseller or end-user in the world has had a problem.
So that is making us easy to do business with. A lot of the problems in the industry are related to the large number of channel management whose only job is to stuff the channel. But our sales people work with dealers to sell the product to end-users not just to sell into the channel. They actually get commission only when an end-user buys the product, not when the channel buys the product.
How have you chosen your channel partners and how will you will you measure their success?
We want to pick the best resellers, so many are carrying Polycom or Tandberg. Each of the resellers who've signed on with us made a commitment with a non-cancellable purchase order to buy products from us. That's why our Partnership Agreements are not just lip service. They have to actually think about this and decide that after we've shipped them those products in two months they're going to place some orders. The way we measure success is end user deals, end user satisfaction. We actually offer them additional rebates if they register a lead or deal prospect with us. We want some new videoconferencing buyers not just winning share from existing suppliers. Our challenge is -- can we make videoconferencing pervasive?
Aren't you worried that today's market leaders like Polycom and Tandberg will quickly launch rival HD system?
We have over 15 man-years of effort to develop the software and hardware for the LifeSize system. Even today's leading videoconferencing companies will not be able to catch up with us just by releasing a software upgrade for their low-resolution systems. And in a couple of years we will have raised the bar further by moving from our HD images today at 1280 x 720 at 30fps to 1920 x 1080 at 60 fps.
For more info, go to www.lifesize.com
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Source: rAVe Europe