Opportunities in the Enterprise

Much of the streaming media industry is facing the NEW millennium with a hangover. VCs and other early investors threw a great party by hiring large staffs and spending big ad bucks in the pre-natal streaming entertainment market. Now that the party's over — or at least on hiatus— many chastened streaming product, service and infrastructure providers have come to realize what those in the enterprise arena have known all along: ROI (return on investment) really does matter. Newly sober members of the streaming media community are now turning their attentions from the excesses of DEN, POP.com, and Pseudo to the more staid corporate boardroom.

There are a number of reasons why streaming media may find a more welcoming home in the enterprise space. For one, the streaming entertainment sector has tortured itself trying to guess what type of streaming content audiences want. This is not a problem in the corporate intranet space. There's no expensive talent to hire and no need to acquire a large audience. Corporate content — executive communications, training, marketing, and human resources content — has been in use for years, and only a moderate investment in time and resources is required to modify it to streaming. Corporations may be slow to change, but less expensive, more convenient and more effective ways to distribute content throughout the enterprise and beyond will be hard to resist.

Perhaps the most compelling reason why streaming media will have greater success, sooner, within corporations than in front of the general public, is bandwidth. Most observers agree that, for reasons of quality, streaming video is really a broadband game, yet well over 90 percent of home Internet users in the United States are limited to dial-up access. But corporate intranets are typically built on a high-speed backbone. "The great advantage that the corporations have is they have already made a lot of the infrastructure investments to have really great bandwidth," said Michael Aldridge, Microsoft's lead product manager for its Digital Media Division. "They can deliver a much richer experience than what consumers get."

And while many big corporations, to reach far-flung offices, are building out multicast-enabled networks - which can accommodate large numbers of simultaneous users without much impact on other network traffic - it will be a long time before the public Internet is truly multicast-enabled.

Predictably, high-tech companies like Microsoft, Cisco and Hewlett-Packard, which have a direct stake in the success of the streaming media industry, are leading the way in the adoption of streaming technologies for their own communications. Cisco averages 30 live webcasts and 300 to 600 on-demand streaming events per month. Microsoft maintains more than 100,000 physical items and over 1,000,000 media files of various types in its media archive. HP did hundreds of webcasts last year, and made over 1,000 streaming videos available on-demand.

Still, most enterprises are moving cautiously as they integrate streaming media into their overall corporate media strategies. Contrary to what many vendors would have us believe, enterprise streaming is still in its infancy. The good news is that enterprise streamers are already seeing both hard and soft ROIs, and when the word gets out, growth will accelerate.

Return on Investment is Key

The most substantial and concrete enterprise streaming ROIs are being achieved through savings in travel costs - often associated with a new product launch. Michael Mitchell, manager of marketing communications for Cisco's Internet Learning Solutions Group, notes that product information for systems engineers or account managers makes up more of Cisco's streaming video than any other application. Mitchell observes, "The main way that we justify [streaming costs] is by looking at travel costs. If you take an audience and say they all have to fly to San Jose, or you take the presenters and say they have to be on a road show for six months, either way you look at it, you get a pretty good ROI."

The recovered employee productivity that would have been lost to travel days is a bonus. Marty Roberts, RealServer product manager at RealNetworks, offers a more concrete example. "If I can keep one training manager from flying around my five remote offices, I probably saved the company $15,000," he said.

Sometimes, however, a face-to-face meeting is preferable to a streaming presentation. Cisco's Mitchell notes, "[With streaming] you might be taking away face time with a product manager, but what you're giving these people is face time with their families. That's why streaming media is fairly popular with the [users]."

For some, travel is a fun part of their job. Salespeople may be less than enthusiastic about forgoing the annual sales conference, for example. Pat Kirkish, director of product management for interactive applications at Akamai, points out, "Sales conferences are kind of sacred. There is something about them you can't replicate over the Internet. Nothing will ever replace the sales conference because you can't stream alcohol."

A number of more specialized applications of enterprise streaming are reaping softer, less measurable ROIs. For example, construction retrofit and upgrade company, Structural Group, uses its streaming video library as a recruiting tool. Director of marketing Brian Gallagher notes, "We give prospective employees access to the [streaming] library. They learn what we do. It differentiates us as a company and shows us being progressive and forward thinking — a company that really cares about investing in its people.

The line between a product launch and corporate training is sometimes thin, especially in high-tech industries where training may be required for salespeople and other staff to understand what a new product does. The streaming of corporate training content is an important and effective video application in the enterprise, in part because it has grown out of the dynamic, well-established distance-learning sector of the teleconferencing space. Most large corporations support distance-learning units, and many are now making the transition from broadcasting or conferencing to streaming. Jim O'Brien, director of streaming at streaming services company Digital Island, notes, "Distance-learning is the biggest user of the interactive element available in streaming, and it's an area that will continue to grow, probably for most of our lifetime."

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