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Toward a Virtual World

Norman Gaut, PhD

It was in 1983 when my MIT friend and colleague, Dave Staelin, invited me over to an MIT lab to witness television pictures sent over a bandwidth of 56 kilobits. They were grainy, a little disjointed, but nevertheless quite recognizable. He and two of his students, Brian Hinman and Jeff Bernstein, had managed to compress television images roughly a thousand fold. I remember the excitement of the group thinking that this technology could enable the next great leap in communications-video telephony.

It had seemed a preordained progression-from face-to-face and mail to the telegraph, the telephone, and then the videophone-as natural as any evolutionary path could be. And this technology could theoretically enable the last step, contributing not only to the communications industry but also to the flow of ideas and information over the earth. If this technology could be productized, the last barrier to destroying distance as a barrier to natural and truly effective communication would be broken. The group was psyched and quickly expanded to include other MIT students and staff such as Henrique Malvar, Greg Papadopoulos, and Peter Chu.

Reality quickly set in as the need for money and organization became apparent. Finally, in 1984, Pictel, Inc. was formed and raising money began. I participated as a board member, and continued running my first company. Most significant however, was the suggestion of a fellow board member that Pictel go public immediately, copying the successful maneuver of another company with which he was associated.

So in the summer of 1984, a president and a third tier investment banker were hired to take Pictel public. We were barely a company, let alone a company with any substance. We raised $4.4M in the offering because many investors clearly believed what we believed-we were going to change the world of communications.

By September of 1985, I was out of my first company and Pictel was moving ahead well in the engineering of our first product but less smoothly in other respects. Dave Staelin brought me in to do some consulting and by January 1986, I became CEO of Pictel.

After a change of name to PictureTel because of conflict with another registered name close to Pictel, we launched our first product, a programmable $80K codec (compressor-decompressor), in 1986. It was a tour de force of discrete components. In reality, it was a powerful single purpose computer that, for the first time, manipulated pixels fast enough to keep up with massive image processing in real time. Its programmability permitted us to upgrade system performance at low cost as algorithms improved, a key advantage over the fixed and obsolescent architectures of competitors.

I will never forget the day of our first commercial installation. When our codec, which required a great deal of power to operate (1800 watts), was turned on, the whole computer facility shut down. So much for a smooth product introduction.

We sold several dozens of codecs, but we realized this was not the product that would take the world by storm. More investment dollars were raised, but it would not carry us far. I remember having a discussion with the principals of the company about whether we should hunker down and try to break even with our present product and slowly build the next generation or simply go for broke and build what we all believed would be the breakthrough product and hope it was good enough to raise more money later. We chose the latter course. And with the successful implementation of that decision, and a new truly breakthrough compression algorithm written by Staffan Ericsson, we were off and running.

In the next few years, we made some decisions that, I believe, went a long way toward creating the videoconferencing industry. One was to make a completely self-contained, roll-about unit that needed only electrical and telephone feeds. Another was to realize early on that a user could tolerate a great deal of degradation in the video but almost none in the audio. This latter understanding led us to develop audio algorithms that first compressed 7 kHz of audio into 8-10 kbps of digital bandwidth and later 14 kHz into less than 21 kbps of digital bandwidth, the finest audio compression technology in the world, by far. And another was to lead the effort for standardization of the protocols and algorithms so all manufacturers' products would intercommunicate.

We were very aggressive in our passion to bring videoconferencing to the world. It was obvious that industrial users, if properly trained, could significantly increase their efficiency in a globalizing economy. Case in point, I made a trip to Japan probably every four to five weeks while we were organizing our Japanese partnership with Kyocera and before we had reliable transpacific ISDN telephone service. After this service became available, I seldom traveled to Japan but was far more effective in handling the myriad challenges that arose between us by using our own equipment. Our efforts lead to a 70 percent worldwide market share and almost $500M in sales in 1996.

Perhaps the application of which I was most proud was our passionate belief that visual communications could be the cornerstone for a revolution in education. Bringing far-flung experts and real time visits to far off educational events and schools no matter where they were located was our dream. In fact, we carried out some of the most innovative and well received examples of this possibility on a number of occasions. One was tying together the dispersed villages of the aboriginals in the outback of Australia so that they could trade, exchange teachers, and freely communicate with relatives in real time. Another was a twenty-four hour marathon in which high schools around the world were hooked up together with each school presenting a local, cultural performance, moving from school to school with the sun around the globe. Nearly 50,000 children were involved.

One major disappointment is that we have not achieved as quickly as we expected the dream for visual communications to be implemented everywhere with a major impact. However, today, widespread usage is being aided by products from opposite sides of the complexity spectrum. On one side, PCs are more and more capable of visual communications (e.g., iChat from Apple). At the other end of the spectrum, there are new offerings from HP, Cisco and Polycom that try to duplicate the actual ambience and feel of having distant participants actually in the room. All of these efforts, I believe, will converge to low-cost, high-quality products that will be as common as the copier in only a few more years.

© 2007 Norman Gaut, PhD. All rights reserved.

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