Cisco positioned for bigger education role

Free videoconferencing services will remain viable in education, despite the recent market shakeup.
Free videoconferencing services will remain viable in education, despite the recent market shakeup.

Cisco’s purchase of leading videoconferencing company Tandberg could be a boon for K-12 and higher-education officials willing to pay for a high-quality online meeting space, but technology experts expect free videoconferencing programs to remain the choice of students.

Higher-education technology officials said the major shift in videoconferencing might not make its greatest impact in lecture halls and classrooms, where free online videoconferencing services are favored by faculty members. Campuses’ dwindling budgets during the economic recession, officials said, could put pricey videoconferencing technology out of reach for many educators.

Ray Schroeder, director of the University of Illinois Center for Online Learning, Research, and Service, said free online webcasting programs will remain widely used in education, but administrators and decision makers who conduct campus-to-campus meetings will gravitate toward the high-end video products that will emerge from the Cisco acquisition.

“You have a lot of competition out there which has driven the cost down,” he said. “Now when you take Cisco and Tandberg . . .they almost have to be more expensive because of the quality they bring to the marketplace.”

Schroeder said the videoconferencing service at his university costs about half of what it did five years ago thanks to the expansion of the online videoconferencing market. But the Cisco-Tandberg combination will attract university officials looking for a secure online meeting place that provides high-quality close-up shots, document cameras that show details on a page, and multiple camera angles for large-scale web-based meetings.

“Cisco has all [the resources] under the sun, and Tandberg has high-quality products,” Schroeder said. “They can provide very crisp video images.”

Cisco announced Oct. 1 that it would buy Norway’s Tandberg for $3 billion in a bid to dominate the global market for videoconferencing equipment. By experts’ estimates, Cisco is paying twice the annual value of the entire global market for videoconferencing equipment, which reportedly is approximately $1.5 billion.

Cisco, the world’s largest maker of computer networking equipment, had a cash balance of more than $35 billion at the end of July, most of that overseas. By buying an international company, Cisco is avoiding the U.S. taxes it would have had to pay to bring the money home.

The all-cash deal is Cisco’s first acquisition of an overseas public company, CEO John Chambers said. Chambers said the acquisition “showcases Cisco’s financial strength and ability to quickly capture key market transitions for growth.”

Cisco has been focusing on the high end of the videoconferencing market, selling so-called “TelePresence” systems with multiple plasma screens that present life-size images of the participants to provide the illusion of face-to-face communication.

With Tandberg, Cisco gets the leading maker of video systems that range from small “videophones” to full conference-room setups.

Free videoconferencing services include Apple’s iChat, which uses the iSight camera and microphone built into most Mac computers and laptops. iChat tells users which friend or family member is available to talk with face-to-face, and whether the person has audio or video capabilities.

The free service offered by Skype, the internet phone company, provides video calls, and only requires a webcam. Other free programs include Wengomeeting, SightSpeed, and PalBee, which is web-based and does not require any installation or downloads. PalBee allows videoconferencing with up to five people, and there is a one-hour time limit in a virtual meeting area.

“If the goal is audio … and video quality that you can understand, I think the answer is yes, [free videoconferencing options] work adequately,” said Benjamin Bederson, a computer science professor at the University of Maryland College Park’s Human-Computer Interaction Lab. “[Cisco’s purchase of Tandberg] might not have much impact at all” on college campuses, he added..

Ted Jackson, an analyst for financial services firm Cantor Fitzgerald, said the videoconferencing sector is now a “two-horse race” between Polycom and Cisco — a far cry from the pecking order before the Oct. 1 acquisition.

“[Cisco] has been the third player, and a company like Cisco, I don’t think their goal is to be No. 3,” he said. “The company has made a pretty concerted effort to promote video-based communication.”

By purchasing Tandberg, Jackson said, Cisco now has access to Tandberg’s worldwide clientele, meaning Cisco will have a “built-in audience.”

“That definitely had to be a factor in [Cisco’s] thought process,” he said.

Paid videoconferencing usually allows unlimited users and has reliably high-quality video and sound, so if a professor needs to connect with dozens or hundreds of students via video, a free online option would likely be insufficient. But if an educator needs to connect with only a few students simultaneously, there is little need to pay monthly or annual costs to a major corporation like Cisco, Bederson said.

“There isn’t that much value in the visual component of a talking head, given the cost,” said Bederson, adding that videoconferencing is valuable for introductory face-to-face meetings, but voice or text communication is used more often in future long-distance meetings. “People tend not to use it unless they have a very specific need. … Seeing my face doesn’t add that much to the conversation.”

The role of videoconferencing in K-12 schools was examined in a report published last fall by the California Education Department and the Los Angeles County Museum of Art. The report — which gathered data from businesses, nonprofit organizations, and telecommunications companies — outlines how bolstered broadband internet service can help make videoconferencing more accessible throughout the state. The report advocated that videoconferencing become a “standard teaching tool.”

The report, titled, “A Blueprint for Strengthening K-12 Videoconferencing in California,” said using the technology could help enhance education while the state’s operating budget remains mired in a deficit that has cost thousands of state employees their jobs.

“Today, the value of videoconferencing in education is indisputable,” the report said. “It is no longer difficult to imagine a world where K-12 students in California can travel to an art museum or aquarium and engage with content specialists in real-time discussions without leaving their classrooms.”

Four percent of California classrooms have videoconferencing equipment, compared to one-quarter of classrooms in states such as Texas, New York, and North Carolina that have videoconferencing capabilities.

Webcasting industry experts said Cisco’s acquisition shows the company will continue to appeal to colleges of every size.

It appears Cisco wants “to be a big player in the education space,” said Jon Bischke, CEO of, a site that offers live, interactive video classes. He added that the coming Cisco videoconferencing equipment will be “a high-end option” and might take years before adoption into web-based college courses. “I think it’ll take a long time for it to impact the mainstream of distance learning.”

Material from the Associated Press was used in this report.




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