Growth, Growth, Growth
On the heels of outstanding quarters from both TANDBERG and Polycom, Cisco announced that it has achieved 500 units on order or shipped and signs up AT&T to complement their BT Conferencing relationship.
Although Cisco may only be counting the $300,000 x 300 units = $90 million in revenues over the past 18 months, there are many pull-through advantages. Firstly, Cisco sells the enterprise Ethernet switches required to connect the room to the WAN. Likely dual 1Gbps interfaces are recommended. Then they sell the WAN edge routers for MPLS service and require 10-12 Mbps per monitor for access to the WAN. Then they sell the carrier MPLS equipment to aggregate and transport all this IP.
The service provider has to be a Cisco Authorized Telepresence Service Provider with attendant requirements about management and operations that can only mean more Cisco product and Cisco-certified customer engineering expertise standing by or managing the network and the service. Overall, I would guess that the behind the wall represents 2X the revenue that Cisco gets from the room itself, making Telepresence as a high bandwidth proposition very attractive to the Cisco shareholder and the Cisco service provider.
Of course, Cisco will move into sub $100,000 HD systems, but not for another year. I bet they think there are still plenty of market stimulation to be done this way, especially now that AT&T is pushing the technology too.
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