HP cuts cost of its video conferencing offering

With a price-cut on its high end video conferencing offering and a new version with an even lower pricepoint. Hewlett Packard hopes to move HP Halo beyond the Fortune 1000. In the near term, however, the Halo sales strategy will continue to be direct.

Competitive with Cisco Systems’ Telepresence product as well as video conferencing solutions from companies like Tandberg, the HP Halo studio is a high-end video conferencing solution that includes a custom-built studio, walls designed to optimize audio and video quality, high-end cameras and video screens.

HP has also built its own network to link Halo studios and ensure optimal video and audio quality, which adds a substantial monthly service fee on top of the initial US$399,000 purchase cost for a single studio. With that price point, HP has marketed Halo strictly as a Fortune 1000 offering.

Looking to move beyond that market however, HP has lowered the list price of the Halo studio offering to US$349,000. It has also introduced another level of Halo experience, Halo Collaboration Meeting Room, for US$249,000. Optional accessories include a lighting kit, object camera (which is standard in the studio edition) and a curved back wall.

Darren Podrabsky, HP’s Halo marketing manager, said while the studio offering was a full studio build-out, the new offering is designed to fit into and leverage an existing space, like a boardroom.

“It provides the customer with lower overall site preparation costs and install time,” said Podrabsky. “As well, it offers a lot more flexibility as to where you can take the Halo experience.”

Addressing the issue of interoperability, as previously Halo studios could only talk to each other, as part of an alliance with Tandberg, HP has also announced Halo Gateway. With a list price of US$39,999, it’s designed to link standards-compliant video conferencing streams from non-Halo video conferencing tools into the Halo system.

“The idea is to be able to grab a video stream and port that into the Halo studio, and the Gateway allows you to do that,” said Podrabsky. “We’re very excited that, six or seven months into our alliance with Tandberg, we’re already announcing an offering.”

HP has also announced three managed services enhancements around Halo, including improved encryption, multimedia sharing and GUI localization to different languages and geographies.

Podrabsky said sales of the studio offering have been strong, with HP recently turning-in its best quarter yet for Halo. Currently, HP boasts 120 studios installed in 22 countries, not including internal HP installs. He added he thinks Collaboration Meeting Room will expand the market even further.

However, Halo remains at this point, Podrabsky conceded, a large enterprise play.

“Perhaps so, but looking at our roadmap we’re looking in the next year or two to introduce smaller versions, and I think that will really allow us to crack the SMB sectors,” said Podrabsky. “Right now, we’re still focused on the Fortune 1000, and (Halo) is a pretty considerable investment.”

And Halo also remains, for HP, a direct sales opportunity, with no plans for a channel program in the near future.

“However, in the long term, as we look at not only different configurations but opportunities to offer-up managed services, there absolutely will be an opportunity for channel involvement and channel programs,” said Podrabsky. “I’d say in the next year or so you’ll see that from us.”

Jon Arnold, principal of Toronto.-based J. Arnold & Associates, said HP faces tough competition from players like Cisco and Tandberg, and both use the channel for their video conferencing plays. The competition will get more fierce as HP moves down-market.

While Halo doesn’t have a lot of synergy with the rest of HP’s product line and the work HP’s partners are already doing, Arnold notes the case is different with Cisco, where Telepresence is also viewed as a networking play. A new implementation is also a good time to talk to a customer about upgrading their Cisco network. With Halo, HP has built its own network infrastructure.

The long-term challenge for the video conferencing market as a whole, said Arnold, is one of standards. Systems need to be able to operate as seamlessly as the telephone network, and for that to happen vendors will need to agree on common standards.

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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