Cisco and H.265 demonstrated at Collaboration Partner Summit

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I felt whilst the demo was good, in that it shows Cisco leading in this space, the actual demo kinda missed the point of H.265, at least in the first couple of years of its life.  Whilst H.265 will give you the same quality as H.264 at half the bandwidth, that will only really become relevant as general purpose computing hardware becomes capable of processing it.

It took around 4 years for general purpose hardware to start processing H.264 HD video after H.264 was ratified.  Even today, most vendor implementations of H.264 require a quad core processor, with Cisco using dual core.  So when we finally see the new standard, I don’t think its reasonable to expect general purpose hardware to be touching H.265 for at least a couple of years.  The point about bandwidth saving it its only really relevant to mass deployment of video, although it could be argued that it also reduces the risk of congestion when making calls via the internet.

Where H.265 will make an impact is in the new applications it will enable in the meeting room.  4K and 8K video will provide new experiences and new capabilities, and it is here that I expect Cisco to market this new capability when we finally see something from them.

Cisco wouldn’t be drawn on the question of what hardware the demo was running on, but I really wouldn’t expect it to be on the C-series.

Cisco Launches the TX9000

So what’s the big deal?

With recent stats showing poor Q1 performance at the top end of Cisco’s Telepresence offering, could the launch of this new product signal Cisco being out of step with market demands?  Or something else?

Elliot Gold’s Telespan recently reported a sharp decline in Cisco’s Immersive Telepresence numbers, both Quarter on Quarter, and Year on Year.  Now I’m pretty sure that the appetite for these systems is pretty limited, its a niche market, and the sales of these units are almost exclusively led by the manufacturer.  But, from my time observing this market, one thing for sure I know is that customer that are making big investments in technology such as Immersive Telepresence are very aware of product roadmaps.  I might be wrong, but I would not be surprised to see a resurgence in Cisco’s numbers post-TX 9000 launch, simply because in Q1, customers were holding off orders as they wait for the new product.

But in real terms, these Immersive TP systems actually contribute very little to the overall market, certainly in terms of numbers shipped, but also revenue (despite the very high ticket price!).

What’s most exciting about the TX9000 then is the research and development implications.  Just as we see technology first seen in Formula 1 begin to appear in every day motor vehicles later on, the innovation we see appearing in the TX9000 will also start to appear in multipurpose and personal systems as new products are release.

We saw this with the Tandberg C90 on its release, and I fully expect to see the same with the TX series as it develops and matures.  I also expect to see H.265 support on this hardware platform.

So my belief is rather than Cisco investing into an imploding niche market, what we’re seeing is a continuation of the same trend that made Tandberg so successful in the first place.  Innovation of new features and functionality at the very top end, (in the knowledge that the market for these technologies may be limited), but then the exploitation of these technologies across the product range later.

The ‘Death’ of TelePresence

It’s interesting times in the Videoconferencing / TelePresence industry.  With market data from Polycom and Cisco showing downturns in recent times, and with notable sources such as  Forbes.com also seeming eager to put the boot in, publishing a controversial article here, the industry is rife with speculation about the ‘death’ of TelePresence. Much of the speculation points to low cost start-up businesses such as Vidyo, who themselves reported some stunning growth numbers last quarter.

So what do this all mean?

Well first, lets put something into context.  Vidyo’s growth numbers may be impressive at 82%, but lets not forget that its far easier as a small business to achieve such levels of growth, simply because doubling a small revenue number is way easier than doubling a large one.  As Vidyo does not disclose its numbers, then a simple percentage growth figure is largely meaningless.  We certainly cannot assume that Vidyo’s growth is responsible for Cisco’s and Polycom’s decline in numbers.

This brings me to my second point, start-up video calling businesses that do not provide proper interoperability are doomed from the start, and it’s just a matter of time.

Already we are seeing free to market, standards based alternatives with HD video that are interoperable with the huge installed base of Polycom, Cisco and others.  These services are easy to use, and whilst feature limited, offer video calling instantly with the assurance of being able to connect to any other standards based system.

There’s one very notable exception to this of course, Skype.  Skype is different simply because it defined the market for domestic video calling, and owns that market.  It may be a walled garden but with such critical mass, they are able to call the shots.  Whenever I’m asked if our standards based service is able to call someone at home, the question is invariable can we connect with Skype.  It’s incredible to think that the EU would actually miss this when it approved the Microsoft acquisition, given its previous form with Cisco and the Tandberg acquisition, especially when ownership of Skype gives Microsoft far more power over a market than the Tandberg acquisition gave Cisco.  I watch with interest on that front, because should Skype remain a walled garden, I predict that the business community will ultimately reject it as a solution because of its closed nature.

Customers are becoming more educated as to how they want to connect, and they want to be able to connect to anyone, anywhere without fuss or conversations about why their investment doesn’t allow them to talk to X, Y or Z systems.

Which brings me back to Polycom and Cisco:  OK these companies have duked it out previously, and on a number of occasions about supporting standards, but actually their track record is pretty good at interoperability, and trying to ensure that customers are able to communicate with each other, even if sometimes certain ‘premium features’ aren’t available when its a multi-vendor call.  I strongly believe that its the interoperability approach here that will win out in the long term, versus the alternative, where a dominant business such as Microsoft attempts to leverage market forces to drive its agenda.

Another aspect being discussed here, as it has for many years is that of Software vs. Hardware.  Many believe now that software only solutions are primed to take over the market delivering the same quality and experience of hardware solutions, (which drive both Cisco and Polycom’s revenues in the video space).  Whilst it’s true that general purpose computing hardware is now more than capable of processing H.264 with High Definition, that’s only part of the picture.  Firstly, hardware systems provide an appropriate, resilient form factor for use in rooms where multiple input devices are required, with purpose built GUI’s designed to optimise the experience for the user.  That’s one part.

The other more telling part though, and what industry analysts seem to have overlooked, (despite having seen two cycles of what we are about to go through), is the continuing innovation that occurs within the standards.  I’m referring here to the ratification of H.265, expected early 2013.

As has been seen before with both H.263 and H.261 before it, PC based solutions became available toward the later stages of these standards because general purpose computing caught up over time.  H.265 promises to change the game in as significant a way as H.264 did 6 years ago, and general purpose computing will not cut it for at least a couple of years.

So what does H.265 promise?

Two main things; Firstly, as with H.264 and H.263 before it, the first aspect to be exploited will be the reduction in bandwidth required to transmit video of a certain resolution and bandwidth.  So for example, if a 1080p30 call today requires say 1.5Mbps with H.264, then H.265 could well provide this at 768kbps (if the bandwidth savings made by H.264 over H.263 are anything to go by).  OK so bandwidth is getting less expensive, but this is a big deal if the number of video calls is going to increase at the rate people expect it to.

Secondly, and again as we saw with h.264, we will then start to see adoption of new features that the protocol brings.  With H.264 we saw the almost immediate adoption of 720p video, and now we’re seeing 1080p deployed as standard more and more.  H.265, 4k and 8k video resolutions are possible, and in addition, expect to see more than just dual streams, but multi-stream calls with multiple video and content sources simultaneously.  And once again, this is driven by standards.

One might think ‘why do I need 4k or even 8k video when 1080p is perfect even on a 65″ screen’?  I leave you with this thought from none other than Microsoft: