Commitment to Our Customers

A Message from Fredrik Halvorsen

In the three months since becoming TANDBERG's CEO I have had the opportunity to meet many of our customers and partners and appreciate the strength and diversity of the TANDBERG community. The TANDBERG management team is more committed than ever to helping you use video to extend new services to your customers, increase your productivity and improve the work/life balance for your employees.

The promise of video anytime, anywhere, for anyone is now a reality. At our Day of Visual Communication events and in customer meetings we have already seen a lot of excitement for the new Q1 products - the 3G Gateway, streaming Content Server, and Public systems - and the feature enhancements to the management system, infrastructure and endpoints in our Total Solution.

Our HD-capable systems and our approach to Optimal Definition have received a very positive response, particularly from existing customers who can gain approximately three times better resolution with just a simple software upgrade. We are offering demonstrations of our HD and Optimal Definition solutions and look forward to your feedback.

TANDBERG is focusing on making life easier for our customers. We are helping global companies to streamline their purchases, strengthening our technical support and services organizations to respond to your needs more quickly, and designing new programs that help you speed the integration of video in your workplace.

In this newsletter you'll hear more about how video is helping TANDBERG customers raise productivity, increase job satisfaction, and make quicker decisions. I and everyone on the TANDBERG management team look forward to hearing from you and being a part of your success.

Fredrik Halvorsen
CEO

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Higher Resolution with No Added Investment

Software upgrade offers HD and new resolutions

The wide range of videoconferencing customers requires a range of video resolutions. The 3G mobile phone user, the CEO in his office, a doctor evaluating test results, and an engineering team reviewing product drawings all have different needs for visual definition - as well as different bandwidth available. TANDBERG's HD-capable systems are designed to provide the flexibility for video users to choose the resolution most appropriate for their application.

The doctor and the engineering team in particular may have special needs for higher resolution images. To serve these types of customers, TANDBERG systems have HD (720p) capability. 720p equates to 720 lines (horizontal) and 1280 pixels per line (vertical) for a resolution of 1280x720, or 921,600 total pixels of resolution.

What's more, TANDBERG's HD does not require the user to sacrifice the features of the complete TANDBERG Solution.

TANDBERG's HD maintains:

High Definition is available to TANDBERG MXP customers with a software upgrade. Twenty-five thousand installed systems are already HD-capable with this software upgrade.

We have added more choice for the TANDBERG user, including resolution at 2.5 times CIF, with 448 lines (448p). It is important to note that while High Definition requires a new camera, 448p does not. Using a resolution 2.5xCIF gives a much sharper picture because it uses more of the lines available on a LCD or Plasma screen today.

The CEO may wish to send and receive presentations in XGA format (768 lines) over higher bandwidth (384kbps) to be displayed on a plasma screen. While bandwidth may be in abundance at the corporate headquarters, it is still a challenge to get 1Mbps or higher at home office or small office sites. Also, 384kbps will always be less expensive than 1Mbps for organizations watching expenditures.

At the low end of the spectrum, we have mobile systems utilizing 64kbps and QCIF. This makes sense based on the bandwidth, size of screen and the application (talking heads, no PowerPoint or engineering designs).

The majority of the market today is somewhere in between QCIF and HD. For example, our corporate standard at TANDBERG for business meetings is CIF resolution (352 pixels x 288 lines) at 256kbps. For sharing presentations, we use XGA resolution.

TANDBERG codecs have the ability to assess the bandwidth available, type of camera, screen and application, and choose the appropriate resolution for you.

If you are considering purchasing a High Definition solution, make sure you read TANDBERG's Questions to Ask When Buying HD Video Systems and the recent interview with Hakon Dahle in The Wainhouse Research Bulletin when evaluating potential vendors.

TANDBERG is currently demonstrating High Definition and Enhanced Definition for customers around the world. Please contact your salesperson or partner for a demonstration.

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Q1 Software Releases for the Total Solution

Upgrade to the best user experience

New software releases are now available for video endpoints, TMS, Border Controller, Gatekeeper and MPS. With a simple software upgrade, these products have added features and functionality that ensure customers have the best user experience with the most technologically advanced products.

Customers with a Core Service contract receive a software upgrade as part of their agreement. You can download software and detailed Release Notes at: www.tandberg.com/support/download_software.jsp.

For a full list of all Q1 software upgrades, click here.

Highlights of the feature enhancement and user benefits include:

MXP Endpoints (F4 Software)

• Support for new video resolutions, including 400p/448p, and Native Widescreen Formats such as 720p HD - increasing video resolutions at various bandwidths and display types.
• Support for IPv6, the next generation internet protocol (IP), which will dramatically increase number of addresses, security, and communication quality.
• Enhanced SIP Support such as digest authentication, H.264 and AAC-LD audio, and Nortel SIP support.
• IEEE 802.1x Network Security Authentication Support enables TANDBERG endpoints to authenticate to the customer's network. 802.1x Network Authentication denies access to the network for any device that does not comply.

TMS (11)

• IBM Lotus Sametime Integration allows users to connect business-quality video using the Sametime interface.
• Firefox Browser support.
• Ability to monitor multiple conferences at the same time on multiple MCUs.

Border Controller (Q3)

• Up to 50 Independent TANDBERG Gatekeepers can now register to a single Border Controller and handle firewall traversal traffic from multiple Gatekeepers behind different firewalls.
• Support for IPv6.
• Active monitoring of all neighbor and alternate Border Controllers to monitor the health of the network for faster response to any loss of communication.
• Ability to define up to five alternate Border Controllers.

Gatekeeper (N4)

• Supports registration of up to 50 independent Gatekeepers to a single Border Controller.
• Support for IPv6.
• Support for Remote Zone Definitions that help with call routing and assist with resolution of multiple domain name issues.
• Active monitoring of all neighbor and alternate Gatekeepers.
• Ability to define up to five alternate Border Controllers.

MPS (J3)

• Increased flexibility as now the system can be configured as an MCU, Gateway or mix of both.
• Support of SIP Protocol.
• Ability to build multipoint conferences now available from Microsoft Office Communicator using TMS, the TANDBERG Communicator Integration and MPS.
• Ad-hoc Conferencing Capabilities allow users to create conferences by dialing predefined dial-in numbers without administrator assistance - through a personal conference number or single number conferencing.

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Return on Your Investment

Speed time to market and reduce costs

Seeing the person you are speaking to in real time has proven to be the best method for effectively sharing information. Business quality visual communication offers end users the opportunity to enhance working relationships and increase productivity. But, how can these benefits be measured?

For manufacturers, business quality video offers measurable Return on Investment (ROI) for critical business processes such as product development and product support. Video is helping TANDBERG customers achieve:

• Decreased travel time for employees
• Decreased travel costs
• Enhanced communication with remote facilities, suppliers and customers
• Increased productivity
• Faster time to market

The scenario below outlines how the numbers add up for a typical manufacturer.

ROI SCENARIO

Manufacturer "A" Profile:

• $200-300 million in annual revenue
• 500 employees at facilities in 10 different countries
• Five personal video systems and one group system installed in each of the 10 facilities, along with supporting infrastructure products and the TANDBERG Management Suite (TMS)

Total purchase cost for Manufacturer "A's" videoconferencing solution: $925,000 (YEAR ONE investment)*

Travel Savings:

• Manufacturer "A" spends an average of 0.8% of its annual revenues on travel; or approximately $2 million annually (estimated at an average of $1,250** per trip for 1600 trips annually). Representatives from sales and marketing departments, senior management, purchasing staff, and R&D are all business travelers.
• By deploying video, Manufacturer "A" is able to eliminate one out of every five trips (eliminating approximately 320 trips per year), reducing its annual travel expenditures by 20%.

Total savings for Manufacturer "A" through travel reductions via videoconferencing: $400,000 (each year)

Time to Market Savings:

• Prior to implementing video, Manufacturer "A's" average product development cycle is 180 days
• Average revenue for Manufacturer "A's" new product upon release to market is $40,000 per day
• Through more effective and more frequent collaboration using videoconferencing, Manufacturer "A" is able to:
• Uncover and address product development issues more quickly
• Increase the amount of time employees spend on the job, rather than traveling
• Reduce the time-to-market cycle by 30 days

Total amount of additional revenue generated through additional product availability: $1.2 million (per product release)

Year One Benefit:

Return on Investment: 172.9% for one year
Payback Time: 0.579 years

*Estimated pricing for a sample 60-unit solution, supporting infrastructure, software products, and services

**Assumes one-night domestic hotel, airfare, per-diem, and incidentals. Assumptions on travel as a percentage of revenue based on the Global Supply Management Research Series, Aberdeen Group, November 2005

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How to Get an 8-day Week

Extend your video solution to telecommuters

For the thousands of TANDBERG customers that already have video installed, extending the benefit to telecommuters is the natural next step in technology adoption. Video has become an essential tool for home-based employees who want to maintain a visual connection with their workplace. Companies appreciate the reduction in cost and increase in worker productivity gained through telecommuting. The environmental benefits of telecommuting also offer companies that develop home-worker programs with a way to stand out as socially-responsible organizations.

The cost of commuting

Commuting comes at a cost to employees, in terms of fuel expenditures and quality of life. It is also a strain on the environment.

In the United Sates, the average commuter spends more time commuting each year than on vacation. Using an average commuting distance of 18 miles each way and an average highway mileage of 23.4 mpg, the daily fuel consumption due to commuting is at least 1.5 gallons for a round trip. A five-day commuting workweek releases at minimum 5,154 lbs of CO₂ into the atmosphere each year, per employee.

In Europe the commuting times are even greater. At an average commuting distance of 13.7 miles each way, and an average highway mileage of 28.4 mpg, the commuting fuel consumption in Europe is over one gallon each day per employee. The environmental impact for each commuter is the release of approximately 3,800 lbs of CO₂ into the atmosphere.

The benefits of telework

Telecommuting programs lead not only to indirect benefits such as increased quality of life for employees and a reputation for environmental stewardship. There can also be some very real savings for a company that implements a telecommuting program:

How can business-quality video help telecommuting?

With video, managers of telecommuting employees can maintain trust with their staff because their communications are face-to-face. Employees may be "off-site" but they are not "out of sight."

Today's videoconferencing solutions offer affordable "personal" systems for individual workers, as well as integration with PCs and 3G mobile phones. These devices can be part of a centralized infrastructure and management system and take full advantage of the features and functionality of the highest quality video technology.

With a business-quality video solution:

• Documents and multimedia presentations can be shared seamlessly.
• Meetings can be archived and streamed for later viewing.
• Encryption and authentication make sure that conversations are kept private.
• Firewall traversal technology allows companies to keep remote workers' video systems inside the corporate firewall, while allowing them to connect securely to the home office.
• Management systems can track usage, helping companies record their telecommuting savings and measure ROI.

It is important to choose a video solution that is scalable, standards-based, and can integrate with other collaboration tools that might be used by a telecommuter. Only a business-quality solution offers the functionality that can make a telecommuting program a success.

For more information on how video can help your organization realize the benefits of a telecommuting program, please read TANDBERG's whitepaper, Visual Communication is Green.

Read more about how TANDBERG is contributing to telework initiatives in the U.S. Federal Government, in Federal Computer Week.

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