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Cisco inks managed TelePresence deal with AT&T

As Cisco reports brisk TelePresence sales, the company announces a managed service offering with AT&T.

Cisco Systems and AT&T have announced a managed services partnership for Cisco's TelePresence product.

AT&T will begin selling the high-end videoconferencing product as a managed service in the second half of 2008. While pricing details were not disclosed, AT&T's TelePresence offering will be the first version of Cisco's product to allow intercompany communication, allowing customers to connect with partners, suppliers and customers.

"AT&T is playing a critical role in the delivery of intercompany Cisco TelePresence to the more than 750 Cisco TelePresence-room footprint worldwide," Cisco's senior vice president for emerging technologies, Marthin De Beer, stated in a release.

Sales of Cisco's "green product of the century," TelePresence, have beaten analyst expectations and set the stage for the service partnership with AT&T.

Cisco announced that it has deployed or sold more than 500 TelePresence high-definition virtual meeting sites to customers, with another 250 sites being used internally or for philanthropic reasons.

"That's a substantially larger number than people thought they would have at this stage of the game," said Henry Dewing, an analyst with Forrester Research. "Up until Cisco made this announcement, I would have said everybody probably had around 100 rooms."

Although Cisco has primarily aimed TelePresence at the Fortune 500 and large multinationals, Dewing said demand for the video services among smaller enterprises will prove strong. He said AT&T probably anticipates a significant market for the technology and sees a chance to sell the additional MPLS bandwidth needed to support multiple streams of real-time, high-definition video from site to site.

As the technology improves to the point where it can better replace meetings, and as enterprises look more closely at travel budgets as well as "green" strategies, the value proposition for TelePresence is not as tough a sell as it used to be.

"I cannot picture the 500-person business that's going to spend the money that this is going to take," Dewing said. "But this does open the door to a pricing model that might make sense [for non-Fortune 500 customers]."

At the same time, options are improving along the whole range of video technologies, from low-end desktop solutions to traditional videoconferencing to virtual meetings like Cisco's offering and similar ones from HP and Teliris.

Cisco has plans to create greater interoperability not just among its own TelePresence sites but among high-definition conferencing solutions from various manufacturers, Dewing said, although the company is wary of any compatibility tradeoffs that might include a dip in quality.

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