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Monday
November 29, 2004
From: EDACafe
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About This Issue
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Web Conferencing, Webinars, …
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| November 22 - 26, 2004 By Dr. Jack Horgan |
| Read business product alliance news and analysis of weekly happenings |
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Introduction
Communication at a distance may not be as effective as in person meetings but it is a lot more efficient. Obviously it saves the cost (travel, lodging, meals, local transportation, …) and time to go and return for all participants who must travel. A round trip across the US for a short meeting can take 24 hours, an international trip 3 days. Also there are no delays due to scheduling difficulties for travel or possible problems if a flight is cancelled. The only drawback relative to in face-to-face meetings is that it can be more difficult to establish personal relationships which are often developed outside of the formal meetings with prospects, customers, partners, and fellow employees. Also, for some things like test driving a car or seeing a house before purchase, you just have to be there.
Centuries ago communication at a distance was carried out using smoke signals, mirrors, lamps, and flags. These methods have obvious problems. Most don't work at night or in bad weather. All are limited by the amount of content they can realistically communicate and the distance that they can cover. Sometimes communications was simply a matter of humans carrying verbal and/or written information. Several instances stand out in our memory. Around 490 BC Phidippides ran the 26 miles to Athens to carry the news of the surprise victory over the Persians on the plains of Marathon and to warn about approaching Persian ships. He delivered his message and then died shortly thereafter from exhaustion. Immortalized in poem by Longfellow (remember the phrase: 'One if by land, and two if by sea") Paul Revere rode through every Middlesex village and farm in April 1775 to spread the alarm that the British were coming. The western movie romanticized the Pony Express. This mail service involved just 183 men over a period of just 18 months in 1860 to 1861. An ad for riders in a California newspaper read: "Wanted. Young, skinny, wiry fellows. Not over 18. Must be expert riders. Willing to risk death daily. Orphans preferred." In August 1943 John Kennedy of the PT 109 inscribed a coconut with the message "Nauro Isl…commander…native knows pos'it…He can pilot…11 alive…need small boat…Kennedy". This simple message led to the rescue of a man later to become president of the United States.
All these age old methods of communication were limited by the distances they could cover and the amount of content they could deliver. They were largely one way communications. With the invention of the printing press by Gutenberg in 1450 newspapers, pamphlets and books of considerable size could be published in considerable numbers. But they still had to be distributed.
The telegraph (invented by Samuel Morse in 1838, used extensively in the Civil War), the teletype (invented around 1905 and financed by the Morton Salt dynasty) and wireless telegraphy (invented by Marconi in 1896, first transatlantic use in 1901) solved the distance problem but never found their way into the average home.
The invention that most improved communication between individuals was the telephone (Alexander Graham Bell 1876). As Bell himself once said in a speech "all other telegraphic machines produce signals which require to be translated by experts, and such instruments are therefore extremely limited in their application, but the telephone actually speaks, and for this reason it can be utilized for nearly every purpose for which speech is employed". This was instant, interactive communication with worldwide reach.
A lot has happened since Bell first telephone call "Mr. Watson, come here, I want you!" on March 10, 1876. Years ago the major limitation was that the two people had to be at their telephones at the same time. This problem was partially addressed in 1971 when PhoneMate introduced one of the first commercially viable answering machines. Voicemail was invented by Gordon Mathews in 1979. A major step forward was the mobile phone. The first working prototype of a cellular telephone, the Motorola Dyna-Tac, was publicly demonstrated by Martin Cooper in 1973.
Today with instant messaging and so forth, communication is possible 24/7 whether you care to answer or not. The biggest limitation of the telephone is it is an audio media. Camera phones aside, you can not see the other person (not always a negative) or send text or graphics. With sufficient lead time, hard copy material can be sent in advance. Of course the fax or facsimile machine can be used for this purpose. The fax was invented by Alexander Bain in 1843. In 1934, the Associated Press news agency introduced the first system for transmitting "wire photos," so news reporters could send photographs from place to place. Thirty years later, in 1964, the Xerox Corporation introduced Long Distance Xerography (LDX).
In 1956 AT&T built the first Picturephone test system and later introduced it at the World's Fair in New York in 1964. In 1970 AT&T offered Picturephone for $160 per month. There were several private video phone systems and unsuccessful commercial offerings (PictureTel VC, Compression Labs, IBM's PicTel, CU-SeeME developed for the MacIntosh). AT&T rolled out a $1,500 video phone for the home market in 1992. In 1996 MicroSoft introduced NetMeeting, a descendent of PictureTel's Liveshare Plus, initially without video. Today, VisiFone offers a low-cost broadband videophone. It is a self-contained system that does not require a PC or any external equipment. The VisiFone operates on any broadband connection and home or office network including high-speed Internet connections via DSL or cable modem. This device delivers up to 30 frames per second video and crisp audio quality.
The telephone is largely used as a means of communicating between two individuals or two groups of individuals sitting around speaker phones. A considerable advance is audio conferencing, where a large number of geographical disperse telephones are connected together. There are two primary modes: interactive and broadcast. In the later the audience is generally much larger with a principal if not a sole speaker. The former is intended for many if not all persons to actually speak during the call. There is a practical limit to number of speakers. If n people are on a call and each speaks for one minute, hardly enough time to say very much, the call will last n minutes. Since people can not see another, there is no way to signal you want to speak other than by speaking over one another. If the call is not well organized, it can quickly deteriorate. After I was hired by IBM, I joined a weekly worldwide sales call for my group that took place at 3 AM local time. No fond remembrance. Most phone company's offer audio conferencing with and without reservations, with and without operator assistance.
Video conferencing via ISDN or satellite is the next step up from audio conferencing. Kinko's at ~150 locations and some hotel chains offer this service. Several years ago I did an interview with a headhunter on the other side of the country using this capability. It cost only a few hundred dollars.
The web does all of the above and more. Prerecorded audio, video and multimedia sessions can be streamed to the desktop. The trick is that the data is compressed (encoded), transmitted, received and decompressed (decoded). A player on the receiving end is used to present the material as it is being received rather than after it has been fully decoded. Multimedia formats include ASF (Windows Advanced Streaming Format), MPEG (Moving Pictures Experts Group), WAV, AVI, QuickTime from Apple, and RealAudio/RealVideo.
In preparation for my quarterly commentary on the financial performance of leading public EDA, IP and MCAD vendors, I listen to their quarterly conference calls over the web. The press release with financial details is made accessible about an hour before the webcast which is usually one hour after the stock market closes. To access these calls, one registers on their web sites and through a number of clicks access the call using Realplayer from RealNetworks or Windows Media Player from Microsoft. If a listener has a question, he uses the telephone. Companies generally make Webcast replays accessible for a period of time after the live broadcast. These can be paused, fast forwarded and the like. Some third party firms offer access to live and archived corporate communications. For example, Vcall (www.vcall.com), a part of WILink's PrecisionIR, offers custom investor relations services designed to enable publicly traded companies to deliver tailored and compelling communications to an interested audience of investors. A second example would be FullDisclosure.com powered by CCBN StreetEvents. Some quarterly calls have both audio and Powerpoint slides.
The EDACafe website offers short audio interviews with EDA executives providing an in-depth look at the latest technology advances and a peak into the future of the industry.
The webcasts described above were intended to be primarily if not solely a one way broadcast. The next step up is interactivity. The capabilities of webconferencing include:
| Integrated audio,video, data |
Record, edit and playback |
| Event scheduling, registration |
Whiteboarding |
| Document Sharing |
Interactive chat |
| Application Sharing |
Q&A |
| Desktop Control |
Polling |
| Presentation sharing |
Reporting |
| Integrated telephony |
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Many of these capabilities require high-speed connection: cable modem, DSL, or T1. A 56K modem will give a very frustrating experience; the video will quickly fall behind the audio. The audio portion may be integrated or require a separate phone connection. The Q&A, polling, whiteboarding capabilities enable the audience to interact with the presenter, demonstrator, instructor or technical support person simulating an in person experience. This increases the sense of "connected-ness" that the audience feels.
These capabilities can be used in a number of different ways. Webconferencing vendors offer bundles of feature sets attuned with to various target application such as presentations, demonstrations, tutorials, meetings, e-learning, technical support, training, investor relations, and webinars. Each application has a different target audience: employees, customers, users, prospects, analysts, stockholders, trade and financial press and so on.
On Oct 6, 2004 Demos on Demand announced a broadband video resource for the IC design industry that features in-depth product demos from over 70 EDA, PLD and IP vendors. The site, at http://www.demosondemand.com, allows engineers 24 hour access to product demos from the broad spectrum of vendors that serve them. Demos on Demand is a privately held company headquartered in San Francisco that provides electronics engineers with detailed product information whenever and wherever they need it via in-depth, on demand media sessions that are available worldwide.
Most of the leading EDA vendors have some form of distance learning via the web. Cadence offers Virtual Classroom, a web-based environment that allows students to participate in live training events. This service is based upon PlaceWare Web and audio conferencing software and the telephone for the audio portion of the event. The Synopsys Virtual Classroom uses a web collaboration tool from Centra Software to deliver expert-led workshops using Internet audio and video right to the desktop. With this technology, students can interact with the instructor and other students and ask questions using either audio or text messaging. Labs are supported through Synopsys' EducationSphere environment. Mentor Graphics OnLine Knowledge Center is web-based training 24 hours a day, 7 days a week. Mentor offers live "Expert Session" utilizing WebEx. Mentor Graphics OnLine Knowledge Center and Magma Design Automation Online Courses are based upon technology from Vitalect.
Vitalect, a privately held company, was founded in 1997 and is based in Mountain View. Vitalect's Techniq Platform encompasses content development, authoring, management, and certification tools in a web-based system with worldwide hosting, support, and 24x7 maintenance services. It is a customizable online learning solution that helps users create, assemble and deliver online learning content, as well as administer, track and report on its usage. The Techniq Platform includes a family of products, namely Techniq LMS, Techniq LCMS, Techniq Author, Techniq Portfolio, Techniq Certifier and Techniq Tutor (Offline as well as Desktop). Vitalect's Techniq Platform is seamlessly integrated with Webex Training Center product.
Generic Vendors
Firms offering products and services in this arena include Microsoft Live Meeting, Oracle Collaboration Suite and Web Conferencing, IBM Lotus Instant Messaging and Web Conferencing, RealNetworks, Macromedia, WebEx, Raindance, Centra, Genesys … Some of these firms are presented in the paragraphs below.
RealNetworks was founded in 1994. In 1995, the company released RealAudio. In 1997 the firm released RealSystem streaming media solution, which included RealAudio and RealVideo technology. In 1999, they released a personal music management system and launched a for-pay media subscription service. In 2002, RealNetworks announced Helix, an open, comprehensive Internet media delivery platform and community to help enable creation of digital media products and applications for any format, operating system or device. In a shift towards paid digital media content the company acquired Listen.Com, Inc. and its Rhapsody music subscription service in 2003 and GameHouse, Inc. a developer and distributor of downloadable games in January 2004.
| $K |
1999 |
2000 |
2001 |
2002 |
2003 |
| Revenue |
131,242 |
241,538 |
188,905 |
182,905 |
202,377 |
| NI |
6,926 |
(110,121) |
(74,763) |
(38,353) |
(21,451) |
Table RealNetworks Financial Performance
The table above shows the sales and revenues for RealNetworks over five years. Sales have increased 54% in that time period. The company has lost money the last four calendar years but in decreasing amounts. On a geographic basis the company generated 76% of its revenue in the US, 15% in Europe and 9% elsewhere in 3Q04. The consumer segment accounted for 70% against 30% for the business segment. The consumer business is nearly 50% video and software with music accounting for 34% and games 16%. However, the later two categories are growing fast, while software and video is down slightly. RealNetworks has a market cap slightly over $1 billion.
RealNetworks best known product is The RealPlayer, media software for experiencing audio and video over the Internet or corporate networks. The product is available to consumers as a free download from our Web site and also through bundling with third-party products. Premium RealPlayer Plus product contains additional features.
RealAudio and RealVideo use a variety of compression/ decompression algorithms (or codecs) to translate time-based, data-intensive content such as audio, video or animation data into discrete data packets. The compression process enables the data to be streamed to a player even in narrowband bandwidths or congested network environments by reducing the amount of data to be streamed. RealProducer is a multimedia creation and publishing tool that content owners use to convert audio and video content into our RealAudio and RealVideo formats.
Other products include Helix DRM for the secure licensing, delivery and rights management of digital media and Helix Server for broadcasters and content providers to broadcast live and on-demand audio, video and other multimedia programming to large numbers of simultaneous users.
Enhanced versions of our Helix and Real products are available for use in wireless applications.
In December 2003, the Company filed suit against Microsoft Corporation in the U.S. District Court for the Northern District of California, pursuant to U.S. and California antitrust laws. The Company alleged that Microsoft has illegally used its monopoly power to restrict competition, limit consumer choice and attempt to monopolize the field of digital media Microsoft's continuing practice of bundling its competing Windows Media Player and server software for free with its Windows NT operating system products.
The WebEx, Inc. commenced operations under the name Silver Computing, Inc. in February 1995. The firm changed its name several times (Stellar Computing Corp, ActiveTouch Systems, ActiveTouch). The last name change was to WebEx, Inc. in December 1999. In 1998 the firm began licensing interactive communications software to end-users. In 1999 they introduced WebEx Meeting Center, a real-time, interactive, multimedia communications service. The firm then began providing customers and distribution partners access to its hosted services under subscription and other service arrangements.
The WebEx experience is based upon WebEx MediaTone Network, a private, global-switched, redundant network that is designed to deliver scalable, secure, real-time communications services to our customers by capturing screen data from a meeting presenter's computer, translating that information into a proprietary format, and routing that information through WebEx switching clusters to the meeting session participants.
WebEx offers its services on a monthly subscription basis to our customers and on a revenue sharing, discounted or pay-per-use basis through distribution partners. Revenue from subscription services consists primarily of monthly fixed fees, which are based upon either a fixed number of concurrent ports or a fixed usage-based minimum commitment fee, and initial set-up fees. In addition, the company obtains revenue from certain "per minute", or usage-based, pricing arrangements consisting of the following: usage in excess of the usage commitment or the concurrent ports maximum, telephony, certain distribution partner arrangements and individual pay-per-use purchased directly from the company website. WebEx Express provides online meetings with 5 seats unlimited usage and 200 minutes Audio Conferencing for $375/month. Pay-per-use is $0.33/minute/participant.
| $M |
2000 |
2001 |
2002 |
2003 |
| Rev |
25 |
81 |
140 |
189 |
| NI |
(80.4) |
(27.6) |
16.4 |
59.8 |
Table WebEx Financial Performance
At the end of 2003 WebEx had subscription agreements with over 8,850 direct customers. Direct sales to customers accounted for 89% of total revenue. WebEx also had agreements in place with approximately 134 distribution partners, including portals, software and service vendors and communications service providers. In 2003 these relationships generated approximately 11% of total revenue. Sales of Meeting Center service accounted for approximately 60% of revenue. North American-based customers were responsible for 95% of revenue.
WebEx product offerings include:
Meeting Center Standard - allows users to give presentations, demonstrate software, view and annotate any document electronically, and includes integrated teleconferencing.
Meeting Center Pro - includes the full range of Meeting Center Standard functionality and some additional features such as record and playback, integrated video, the ability to edit any document collaboratively and the ability to share applications or a user's entire desktop.
Support Center - primarily used by customer service organizations to provide remote hands-on support for system or software application problems.
Event Center - offers a professionally managed web conferencing service for communications events such as press briefings, product announcements and marketing events. This includes online confirmation, notification and instruction, customized attendee registration, high-resolution text and graphics, the ability to demonstrate a broad range of applications in real-time, audience feedback collection via polling, white board interaction, guided web browsing, live chat, recording and archiving of seminars for on-demand playback, and end user reports.
WebEx Training Center - designed for training and e-learning applications. Users can coordinate training schedules, deliver live instruction directly to learners' desktops, and give presentations that include audio, video and interactive multimedia. Users can administer tests, organize multiple simultaneous breakout sessions, and record, edit, play back and archive entire sessions for future use.
WebEx Enterprise Edition - is a service that integrates the four web communications services described above to create a single source for a customer's enterprise communications
SMARTtech - enables customers to centrally manage and administer their company-wide computer networks
Presentation Studio - gives customers the ability to create and deliver multimedia content for convenient, on-demand access via the Web.
Macromedia, Inc. was incorporated in Delaware in February 1992. The company provides software that empowers designers, developers and business users to create and deliver effective user experiences on the Internet, fixed media and wireless and digital devices. The Company's integrated family of technologies enables the development of a wide range of internet solutions including websites, rich media content and internet applications across multiple platforms and devices. The firm's family of products for multimedia and web development includes Dreamweaver, Flash, Fireworks, ColdFusion and the Studio suite. The company has recently begun to target business users defined as non-technical knowledge workers who want to communicate and collaborate via the Internet and consumers who increasingly expect a rich user experience on digital devices such as PDAs and cellular phones.
| $M |
2000 |
2001 |
2002 |
2003 |
2004 |
| Revenues |
265 |
391 |
326 |
337 |
379 |
| NI |
6.2 |
13.4 |
(308.8) |
1.6 |
41.5 |
Table Macromedia Financial Performance
In the third quart of 2004 North America accounted for 57% of total revenue, Europe 21% and AP/ROW for 21%. North America and Europe grew year-over-year but were down as percentage of revenue. The designer and developer segment grew 6.5% and accounted for 80% of total revenue down from 90% a year earlier. The business user segment was 10.6% and the consumer segment was 7.5%. These two groups grew dramatically year-over-year.
Macromedia Flash Player and Macromedia Shockwave Player are client software that enables users to view content created in Flash and Shockwave formats. Macromedia cites an NPD Research study that shows Flash is the world's most pervasive software platform, reaching 98% of Internet-enabled desktops worldwide versus 88% for Java, 80% for Adobe Acrobat, 55.5% Schockwave, 50.8 Windows Media Player, 58.9 RealOne Player, 59.2% QuickTime, 48.2% View Point.
In January 2003 Macromedia acquired Presedia, Inc., a provider of online presentation and e-learning solutions. Presedia's product set has since evolved into Macromedia Breeze. Breeze provides a rich web communication system that enables users to hold collaborative real-time meetings, instructor-led classes, and seminars, as well as to deliver on-demand informational presentations and e-learning courses. Breeze leverages Microsoft PowerPoint and Macromedia Flash Player to enable approximately 500 million web users to immediately experience engaging online meetings and rich content without downloading special plug-ins or media players. Macromedia Breeze includes a set of components that provide an integrated solution for communication, collaboration, and training needs. Breeze can be deployed with either some or all of these components:
Breeze Presentation - personalize PowerPoint presentations with voice-over and deliver them to standard web browsers by using Macromedia Flash Player.
Breeze Training - create content and build complete online training systems, including integrated surveys, tracking, analysis, and course management.
Breeze Live - meet and collaborate instantly with colleagues over the Internet.
In September 2004 Macromedia announced new web conferencing purchase plans with pricing starts at 32 cents per minute per user for Pay-Per-Use and $75 a month per seat for unlimited meetings available in 5- and 10-seat packages.
In January 2003 Microsoft acquired Placeware, a provider of Web-based virtual conferences, for approximately US$200 million. PlaceWare was founded in 1996 to find commercial uses for the technology behind LambdaMOO, a text-based multiuser environment developed at the Xerox PARC research lab in the late 1980s. The company's main product was a hosted service, PlaceWare Conference Center, that enables companies to conduct Web-based presentations or meetings with up to 2,500 participants. The Placeware claimed more than 3,000 customers. The company also offered a server product, PlaceWare OnSite Solution, for companies that want to host sessions locally as well as a Virtual Classroom hosted service. These capabilities are now offer as Microsoft Office Live Meeting
Microsoft had been offering its own conferencing product NetMeeting. NetMeeting delivered a complete Internet conferencing solution for all Windows users with multi-point data conferencing, text chat, whiteboard, and file transfer, as well as point-to-point audio and video. NetMeeting is included in Windows 2000. Microsoft has ceased future development of NetMeeting and announced plans to phase out this tool in favor of a new service called Office Live Meeting.
Update on India
Last week's editorial was on India, the land of service outsourcing. On November 23rd SAP, one of the largest software companies, announced plans to invest $20 million more and make 1,300 additional hires in India over the upcoming year. The new employees (of whom 800 will fall into classic R&D and the rest into services and consulting) would be added to the SAP campus in Bangalore, which began with a modest 80 employees in 1998 but now accounts for one in six SAP R&D employees, the largest such hub outside Walldorf, Germany. Last week Intel CEO Craig Barrett was in India laying a cornerstone for a new building in Bangalore. Intel is investing an extra $40 million in the next two years to expand its campus in Bangalore. The completed building will provide work space for 1,200 people. The centre will develop Centrino mobile and enterprise applications. Lastly, as part of the $388 billion spending bill passed over the weekend and awaiting President Bush's signature, Congress is exempting from the limit 20,000 foreign students with masters and above degrees from U.S. universities.
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