Virtual meetings vanquished

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Companies plan to cut their spending on virtual meeting platforms and increase their travel budgets, according to a new Forrester Research Inc. report. The report runs counter to the widespread speculation that the terrorist attacks of Sept. 11 would encourage companies to do just the opposite.

Forrester’s virtual platform findings are important, as they lend credence to Wall Street’s suspicion that remote meetings, at least for now, are promising in theory but clumsy in practice.

Stock prices of some virtual meeting software developers, including WebEx Communications Inc. and Polycom Inc., rose considerably in the days following Sept. 11, but have since leveled off.

Cutting spending

Companies polled by Forrester said they would cut virtual platform spending budgets by an average of 6% this year. Executives said that although they’d tried virtual conferencing platforms, they were disenchanted with them. "Many folks said, ‘This stuff’s just not working for us, and we’re just not going to use it anymore,’ " said David Weisman, Forrester’s VP-global research and author of the report.

Erratic video delivery was a common gripe, Weisman said. A lack of high-speed broadband connections and technical know-how may also be to blame. "Unless you’ve got a lot of high-speed lines, the video is very choppy, and a lot of people aren’t familiar with what it takes to get connected," Weisman said.

Virtual meeting platforms are particularly ill-advised for new client sales pitches, as those participating might not be able to pick up various nuances of the discussion, Weisman said. "You can wind up with a lot of stilted discussion and people are not as productive as they would normally be." The platforms, however, can be quite useful for routine meetings with parties used to working together, he said.

Praful Shah, VP-strategic marketing for WebEx, said his company’s business was up 35% in the three weeks after Sept. 11 compared with the three weeks prior. He declined to speculate on business prospects for next year, but said that the ease of use and cheap pricing of his company’s platforms should hold the company in good stead. "It requires just a browser and Internet access," he said. The average b-to-b client spends $1,200 to $1,300 per month on WebEx platforms, Shah said.

Boosting travel

The report also found that, on average, companies were planning a 6% increase in travel budgets. The findings were surprising as many analysts expected the terrorist attacks would lead to a trimming of company travel.

"Companies still want to spend money to put people out in the field," said Charles Rutstein, Cambridge, Mass.-based Forrester’s research director.

Forrester polled executives at 209 companies for the report. Manufacturing, financial, technology, distribution and business services companies were represented.

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