Subrah Iyar, Chairman and CEO, WebEx

Subrah IyarWebEx is the leading provider of online meeting applications that include live audio and video and basic document sharing. Today’s trends toward higher travel costs, time constraints and corporate expansion have done nothing but help the market for the services that WebEx provides.

Subrah Iyar is a computer-industry veteran who’s held senior positions at Intel, Apple, Quarterdeck, and Teleos Research. When Microsoft bought conferencing company PlaceWare in 2003, pundits considered it a sign of consolidation and big trouble for market leader WebEx. Instead, WebEx has thrived under Iyar’s leadership.

The Silicon Valley-based company, with 1,800 employees, expanded its reach from the corporate market into the small- to medium-size businesses market with the recent completion of a $45 million cash acquisition of WebEx has over 12,000 customers worldwide, its largest being Boeing, which hosts thousands of meetings for thousands of users daily. The WebEx MediaTone Network typically facilitates over 40,000 meetings worldwide a day. talked with Iyar about humanizing the Web conferencing experience, and where on-demand services are and aren’t effective.

Q: You were a co-founder of WebEx in 1996 with the idea of providing Web
conferencing services and helping people save on travel expenses, better
facilitate meetings, etc. Has that mission changed?

It has expanded quite a lot. The original concept of conferencing wasn’t
new; there were other solutions out there, but only marginally effective.
Our fundamental insight, the big “Aha!” was to provide an on-demand service,
though we didn’t know that term back then.

Now we’ve enhanced that quite a bit with real-time collaboration, a
200-millisecond response time and many special purpose solutions. That’s the
next phase of our differentiation where can offer specific solutions for
training, sales, etc., at a much lower cost of deployment than a software-only solution. We’re about bridging geographic, platform and time

Q: But ultimately it’s people communicating to each other via computer. Is
there anyway to make that experience more “human”?

Yes, we use the term Web touch, which is in contrast to what Yahoo and Google,
which is zero touch; it’s for consumers, it’s free and ad-supported with
no human interaction.

Web touch is about trying to enable what used to be
called “high touch,” having a live human being make the sale, provide
service, etc. That gets very expensive, but we’re able to bring to market a
class of solutions that’s almost at the level of high touch the way we
connect people and help them to interact.

Q: Where has this been most readily effective?

Software companies are big users of WebEx because it lowers the cost of
marketing, sales, support and service. Traditional software companies have
tremendously higher costs.

Look at SAP. They have a high-touch sales model,
but their average sale is in the millions of dollars. Using our company as
an example, a WebEx sale can be for $375 per month and profitable using our
Web touch business model.

Q: Is the overall trend more to Web touch or no touch?

You’ll see both. With the purchase of Skype, eBay says it can get to a
higher-level transaction amount with VoIP. With more complex B2B
transactions, though, you need tools that allow more than one conversation. W

When you buy, for example, an engine, you might
have to source through several suppliers and get them together for a
meeting. This is one of the ways Boeing uses WebEx.

The system needs to be
intelligent to keep those conversations in memory and the thread stored
because it could be very complex like a multiyear project. So beyond VoIP,
you need data collection of both real- and non-real-time collaboration.

Q: WebEx was named a leader in on-demand solutions in an IDC report. On-demand seems to be an area that gets hyped a lot as the next
big thing, but hasn’t really made it broadly speaking. Where does it work
and not work?

Yes, and IDC also ranked us the top Software as a Service provider.
Sixty-six percent of the top 25 on-demand companies in that report are WebEx
customers and the others probably use some other conferencing tool.

I think the industry is in transition, and a lot of companies are still
trying to figure out on demand. A wrong approach is to take traditional
applications and simply make them available on demand.

In the early days of cars, they were all custom built, and you could say how
you wanted one built, what color etc. So it was an engineering and sales
game and very expensive.

Then there was standardization, Henry Ford’s “You
can have any color as long as it’s black” idea. Now it’s evolved to where
you can choose from thousands of models and colors of cars.

Software is going through the same kind of change. It’s an arc to figure out
the right level of standardization. has figured out how to
do CRM on demand. In other areas, companies will figure out what elements are
good enough, important enough to make on demand, and strip out a lot of the
complexity and provide a scalable solution.

Q: How about competition? I know you get the Microsoft question a lot
following its acquisition of Placeware and what it now calls Live Meeting.
And you’ve been quoted as saying you don’t really compete with Microsoft.

When a company or department gets into sharing, say, a simple PowerPoint
presentation, it’s probably a toss up between using WebEx or Microsoft.
Where’s there’s more collaboration and more back and forth, it’s still WebEx
that’s chosen. That’s our success. We’re much deeper in what we’ve built.

Q: What’s next?

We made a deal with Sony that was just announced where WebEx will be
included in certain models of its Vaio notebook line. You’re going to see
more collaboration with mobile tools where you can always be plugged in,
maybe not with full video but at least connected to the team.

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