Profiting From Web Streaming
AS A fledgling company, Five by Five Communications Inc. of Alexandria, VA, has covered a lot of ground in the past two and a half years.
AS A fledgling company, Five by Five Communications Inc. of Alexandria, VA, has covered a lot of ground in the past two and a half years. This design-build AV systems integration firm specializes in visual communications solutions, but that wasn't always the case. “Our initial focus was on developing secure communications systems for the federal government — specifically customers in the Department of Defense,” says Eric Condit, president and CEO.
The focus on secure communications systems obviously resonated with the company's clients. Business was thriving for its system design and installation of secure integrated conference rooms, video-conferencing, command & control, and briefing environments. Systems ranged from simple peer-to-peer communications to complex, multipurpose command & control centers that gather and distribute information worldwide.
“We worked with the usual manufacturers like Tandberg for videoconferencing and Crestron for remote control,” Condit says. “Since we're exclusively design-build and don't do bid work or consultant work, we started looking to expand into other government departments like the nearby Bethesda and Rockville, MD, campuses of the National Institutes of Health. With our previous experience and knowledge in working with government agencies, it made sense to also apply it to other agencies and administrations interested in deploying secure communications.”
But one day a project up for bid that was posted on a government website caught the eye of Condit and his sales manager, Brad Orme. The project called for the design and installation of an MPEG-4 web streaming and video on demand (VOD) system — technologies about which they had only peripheral knowledge. The two worked on a proposal for the project, submitted it, and went about their other client work. “We really, almost accidentally, stumbled upon this technology,” Condit says. “Our proposal won the bid, and we began to learn the intricacies of web streaming. We completed the install, and in the meantime, entered a new market. As a result, we started talking about video on demand and web streaming to our other customers.”
What Five by Five discovered was a common problem among clients: There are never enough seats in the conference room to hear a presentation. Although they didn't invest in professional market research to uncover this common issue, it quickly became evident that they tapped into a market need that's only beginning to be addressed. “We found that clients either wanted web streaming and VOD as a standalone system or integrated into a secure communications system,” Orme says. “Surprisingly, we found in many cases that our ability to offer streaming and VOD was the decision driver for an integrated system sale.”
The firm also discovered that traditional videoconferencing and integrated conference rooms with web streaming went hand-in-hand. “Of course, the systems can be used independently of each other,” Condit says. “But the real power of the streaming technology shines through when used in conjunction with two-way communications like videoconferencing.”
For example, two parties may be conducting a meeting via videoconferencing, complete with a PowerPoint presentation and other graphics. If the room has reached capacity for attendees or if there are remote people who need to attend the meeting and view the presentation, then a web streaming client can be set up on any personal computer. Web streaming isn't participatory, but Orme has seen clients communicate via a web chat program such as AOL Instant Messenger or Yahoo Messenger. “For those with security concerns, Tandberg offers a messaging client that resides on your own private server, so the communication doesn't have to touch the public Internet,” he says.
Five by Five's streaming system runs over an IP network and most often the client already has the infrastructure to implement the technology. The streaming technology is indifferent to the mode of transport, whether it's fiber or Cat5. The stream plays on either Windows Media Player or Quicktime on a PC equipped with speakers. “Security issues with web streaming are no different than web browsing,” Condit says. “In the military environment, we've worked out issues with security, and are compliant in most areas.”
Working with government clients, Five by Five encounters many types of client infrastructures. Fiber is used when high security is required (because it can't be tapped) or when there are large distances to cover. Wireless has a home in many systems, and is safe as long as communications network security is enabled. However, agencies that handle classified information don't use it. And because HIPAA regulations prevent health care agencies from transmitting private medical data in a way that can be intercepted, wireless also isn't an option there.
While other companies have also tapped into the government market and offered web streaming, Five by Five has taken the additional step of creating a custom set-top box that allows for multiple video streams at the same time. The set-top box is used when there's no PC available, such as in a public display environment. Unlike a cable box, Five by Five's box can be tailored to each customer's viewing preferences. The user interface allows for a split screen up to a quad screen. “Other competitors use off the shelf products,” Condit says. “Our strength is our ability to customize a total solution for our clients.”
By taking a chance on an interesting bid, Five by Five has seen its revenue from web streaming systems grow to $2 million, and that isn't even counting the exponential value added onto integrated system sales. “The technology behind web streaming is new; unlike videoconferencing, it's not as established,” Orme says. “Once a client understands you can get AV and graphics at a desktop, they get giddy. The applications for this type of technology are numerous, and continue to grow as the industry grows.”
The company currently has no plans to expand outside the government market, but acknowledges that the applications of this technology are enormous. So while most firms may not even entertain the notion of bid work, there's always the possibility that a bid project will introduce a whole new direction to a business strategy. Even by reviewing bids, an integrator may come upon a new market need that could be easily filled — one that could generate tremendous payback in revenue.
Linda Seid Frembes is a freelance writer and PR specialist for the professional AV industry. She can be reached at firstname.lastname@example.org.