Firms Turn to Meetings Without the Traveling

The economy and corporate budgets are in sharp decline, new safety checks have made moving through airports slower than ever, and there’s a general reluctance to travel in the wake of last week’s terrorist attacks.

If corporate America is to attempt some semblance of normality, there must be meetings with customers, suppliers, far-flung co-workers, bankers, lawyers and distributors.

To keep things going, many companies are turning to videoconferencing, the technology touted years ago as the movement that would end corporate travel. It never did and it never will. But videoconferencing is on the rise, and experts said last week’s events will further accelerate its use.

Lewis B. Freeman, who heads a forensic accounting and consulting firm in Miami, has changed his mind about videoconferencing.

“Before, when I had meetings, I hopped on a plane and went to New York or Los Angeles or wherever,” said Freeman, who has logged more than 60,000 miles on American Airlines this year. “Videoconferencing was something that you figured was for big companies like American Express or the Department of Justice.”

But by Saturday night, he had talked with several managing partners of Miami-area law firms and all agreed to switch to videoconferencing. Freeman said he hasn’t decided on a system yet, but he hopes to reduce his travel by 60% to 70%.

Employees are already getting the message.

“Our CEO just told us, ‘All travel is suspended until you see me first and tell me why it’s necessary,’ ” said Brian Bruce, director of global investments for PanAgora Asset Management in Boston. “Sometimes it takes something unforeseen like this to kind of speed a certain technology along, as people explore new ways of doing things out of necessity.”

At Fluor Corp. in Aliso Viejo, Lisa Glatch was trying to gather eight other personnel executives from around the country for their quarterly meeting. But it was Sept. 12, a day after the terrorist attacks, and the airports were closed.

Glatch went to the company’s state-of-the-art videoconferencing center and held the meeting through the high-tech equivalent of two-way closed-circuit television.

“There were several managers at the end of the meeting who said, ‘Hey, we were forced to do it this time, but it’s quite effective. Let’s do it this way all the time,’ ” said Glatch, Fluor’s senior vice president for human resources.

Experts say many businesses already have videoconferencing systems but they are so rarely used that many employees don’t know the option exists. That’s going to change, many believe.

“With this jolt, those companies that have videoconferencing, they’re going to say, ‘Now you’re going to use it,’ ” said Elliot Gold of Altadena-based TeleSpan Publishing.

“In both audio and video traffic, the smallest growth we saw last week was 10%, and we saw averages of a 20% to 40% increase in conferencing services,” Gold said. “Several people reported to me that last Friday was their largest volume day ever.”

This kind of volume spike, however, is not unusual after a major disaster.

Makers of videoconferencing services and equipment saw usage skyrocket 25% to 30% during the Gulf War, with similar increases after the crashes of Pan American World Airways Flight 103 in Lockerbie, Scotland, in 1988 and TWA Flight 800 off Long Island, N.Y., in 1996, but the rise didn’t last, Gold said. Instead, business travel resumed at its usual pace once the anxiety and disruptions wore off.

Back then, however, videoconferencing systems were not very good, and they were pricey, with corporate-level systems costing between $50,000 and $100,000, Gold said.

“Now, we sell conference-room systems that cost the same as the table and chairs that are in that room,” said Jules DeVigne, executive vice president of Polycom Inc., the leading seller of videoconferencing equipment. “You can have quality videoconferencing for $5,000 to $10,000.”

Today’s equipment is smaller, faster, cheaper and provides substantially better sound and video than before, analysts say. Because of those advancements, Gold believes that the current temporary spike in demand for videoconferencing will result in a sustained growth in equipment sales and service of about 25%.

Gold estimates that by 2003, videoconference service sales will triple to as much as $1.5 billion.

Wainhouse Research, meanwhile, believes that equipment sales in the business will rise to $1.25 billion in 2005, up from $375 million in 2000.

The leading equipment makers are Polycom, PictureTel Corp., Tandberg Data and Sony Corp., but there are many others.

A typical setup has videoconferencing equipment at each site that participates in the conference, including a monitor, a microphone and a box that processes the signals and controls the display. There are systems that work in conference rooms and others that work on desktop computers.

But that’s only half the equation. There also has to be a high-speed connection linking all the sites. Some corporations have their own setup, using a company intranet or private network of fiber-optic lines or copper connections with ISDN service (at speeds of 128 kilobits per second and up to 384 kbps for multiple lines).

Companies also can leave the arrangements and long-range connections to videoconferencing service providers that charge per-event fees to handle patching in the various participants from sites that have the necessary equipment.

The videoconferencing service providers range from traditional phone companies such as AT&T; Corp., WorldCom Inc., Global Crossing Ltd. and Sprint Corp. to specialty firms such as V-Span Inc., MCSi Inc., Wire One Technologies and others.

Companies typically pay a monthly fee for the ISDN lines, plus per-minute charges. A call from Boston to Luxembourg over three ISDN lines would cost $368 for an hour. Using an Internet-based connection fine-tuned to send video packets without delay can cut that cost by at least half.

Though those prices sound steep, they are far cheaper than the cost of a few first-class airline tickets.

Along with the sharp price drop, technological advances have reduced the time delay for the sound and video and shrunk the size of many systems down to that of a box that sits atop a television monitor.

In addition, videoconferencing allows users to give full presentations, from providing slide shows to writing on white-plastic easels. Employees in offices a world away can ask questions as sophisticated cameras track voices to focus on who’s talking.

Gold’s firm estimates that the U.S. corporate world spends $2 billion a year on videoconferencing, with 385,000 systems installed in the last decade and about 84,000 systems purchased last year.

There’s also a cheap way to get into videoconferencing. Using an off-the-shelf mini-camera mounted on a desktop computer, plus a high-speed Internet connection using a cable modem or digital subscriber line service, computer users anywhere can link up using Yahoo’s Video Chat or any number of similar services sprouting up on the Web to make a video-cam connection.

A typical camera can cost $80 or less; a professional videoconferencing system from Polycom (ViaVideo) costs about $500. That software and hardware combination, however, is not needed for the video messaging services. A single high-speed Internet connection costs about $40 per month.

The downside to this system: The video moves over the public Internet, so the pictures aren’t as pretty and the movements and sound will shake and jump.

For most businesses, that won’t do. And sometimes, even the high-end systems have exasperating glitches. “It was too choppy. It was delayed. It wasn’t in sync with the audio,” Jeffrey Klein complained after numerous misadventures with videoconferencing.

Klein, an information technology manager for Sorrento Networks Corp. in San Diego, opted instead to try Internet collaboration software, such as that sold by WebEx Communications Inc. and others. When Klein organized a training session recently, he linked up with 70 co-workers using Premiere Conferencing’s Ready Cast software, which let participants as far away as Amsterdam access the same computer file and material via the Web while talking to each other over the phone in a standard teleconference.

After using the conferencing software for just three weeks, Sorrento already had spared itself thousands of dollars in travel expenses, Klein figured.

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Times staff writers Sam Kennedy and Josh Friedman contributed to this report.