Don't Look Now

With analysts located in nine different cities, Wainhouse Research uses videoconferencing for its meetings. "We don't all have T1 lines and information technology (IT) departments, but everyone has broadband," says Andrew Davis, managing partner at the firm.

But Wainhouse seems to be the exception rather than the rule. Despite the fact that videoconferencing systems have come down in price dramatically—costing $2,000 or less—only about 16 percent of companies with between 20 and 100 employees have ever purchased any type of videoconferencing, according to Steve Hilton, director of the small- and medium-sized business practice at The Yankee Group in Boston. And that's at the high end of estimates. International Data Corp. figures that only 3 percent of small businesses have used videoconferencing, says Raymond Boggs, vice president of small- and medium-sized business research at IDC.

The main reasons that prompt companies to use videoconferencing don't impact most small businesses much, say analysts. "If you want the same kind of interactions as face-to-face, but your people are geographically dispersed, and you want to minimize or avoid travel for both cost and productivity issues, consider videoconferencing," says James S. Idelson, president, DesigNET International, which consults to companies who use videoconferencing. One aspect of this is intra-company communications—being able to see and chat with remote employees rather than flying to see them in person. But many small businesses don't even have remote offices, notes Boggs. The second aspect—to be able to communicate with remote clients and customers—might be valid for small companies. However, most small businesses will opt for Web conferencing services rather than videoconferencing, he says. "That way, you don't have to depend on the infrastructure on the other end."

When North Wind, an environmental engineering firm in Idaho Falls, Idaho, built its own headquarters and upgraded its IT systems last year, it equipped a large room for all types of conferencing. The company contracted with a service that provides teleconferencing, Web conferencing and videoconferencing. Leslie Diggins, North Wind's quality assurance manager and IT adviser, notes that this service works with any type of computer; the only equipment North Wind bought was $35 Web cams. Plus, by using a service, North Wind can bill clients when applicable for the conferences rather than paying for all the service itself. Web conferencing services can range from $40 to $100 an hour.

The company uses Web conferencing much more often than videoconferencing, notes Diggins, but not because video is any more expensive or technically difficult. "We use videoconferencing the least because nobody really wants to be on camera," she says.