E-mail is a powerful tool. Yet few would argue that voice conversations and face-to-face meetings are essential for building business relationships.

When it comes to subtle negotiations, complex issues or time-sensitive decision-making, talking to someone is usually more effective and efficient than sending typed messages back and forth.

The Internet is one of the great instruments for collaboration between people in different locations. But the most powerful collaborative technology, the one that best approximates face-to-face meetings — videoconferencing — only now is coming of age. The use of video as an everyday communications tool is growing more popular daily. Samsung Electronics recently launched a video cell phone that provides a preview of things to come for the use of video communications among consumers and business professionals.

Web conferencing, or IP-based videoconferencing, also is coming on strong thanks to a convergence of factors that include falling equipment prices, a multitude of third-party service provider offerings and the ubiquity of the Internet. For instance, the Webcam once was associated mainly with scientists and college students. But today has become a mainstream business tool.

Business travel has always cost small businesses time and money. But over the past two years, the combined effects of homeland security concerns and belt-tightening in a tough economy have made videoconferencing an attractive alternative to travel. According to Frost & Sullivan, a marketing consulting and training company, the worldwide Web conferencing market will grow at a projected cumulative average growth rate of 35% over the next seven years and reach $2 billion by 2008.

The shift to IP

Videoconferencing has been touted as the next big thing for decades. But until recently its adoption has been stymied by a variety of obstacles, including the cost and complexity of the equipment and the dependence on ISDN (Integrated Services Digital Network) connectivity. For years, videoconferencing was limited to large companies.

The long-awaited breakthrough has finally come. The newest desktop videoconferencing systems have dropped substantially in price, are much easier to install and use, and rely on today's high-performance IP networks. The cost of IP network bandwidth is significantly lower than ISDN, and the ubiquity of IP networks makes video technology readily accessible at last.

IM in the flesh

Instant messaging (IM) enables someone to create a private channel, commonly referred to as a "chat room," with another individual.

With its move from the consumer market to an accepted business tool, instant messaging is being tagged "the sleeping giant" of the Internet, according to analysts at the Gartner Group, a Stanford, Conn., research company. As cellular phone use grows in the United States, so will instant messaging, Gartner analysts say. Even now IM has become "the collaborative communication of choice" in many workplace environments. IDC, a Framingham, Mass.-based technology research company, says the instant messaging market should grow from 6 million users today to more than 180 million users in 2004.

With video instant messaging, the hot new advance in IM, the pop-up instant message window is populated with video screens instead of plain text. Video instant messaging is integrated into Microsoft's Windows XP operating system. Given the growing popularity of IM in the business world, it is certain that videoconferencing will get an enormous boost from integration with the desktop operating system.

Building on other collaborative tools

Web-based collaboration tools have become so rich that companies can set up virtual meetings that capture nearly all of the dynamics of an in-person meeting (except for the doughnuts and coffee).

With Web collaboration software, every person on the conference can review the same documents or slides, change or annotate them, share thoughts and comments using text chat, telephone (traditional or IP-based) or video and digitally record and archive the event for playback from a company Web site. The first generation of Web collaboration programs required specialized software and hardware, but current tools work through a standard Web browser.

With the wealth of collaboration tools available, companies can use their Web conferencing capabilities to conduct almost every type of meeting more cost-effectively, including sales presentations, briefings, announcements, training, recruiting, consultations, reviews, negotiations and seminars.

Broadband breaks bandwidth barrier

With so many consumers enjoying cable television — and even cable Internet access — from home, no small business should still be relying on dialup analog connections to connect to the Internet. Today's broadband connections usually deliver bandwidth of at least 1.54 megabits per second (mbps), or about 25 times the speed of a dial-up connection, for a dramatically improved user experience.

The good news is that small businesses have several different choices in affordable broadband services today, including DSL, cable, and even fractional T1. The Yankee Group found that more than 90% of small businesses using DSL reported business gains or increased productivity that exceeded the cost of their monthly service. In addition, 65% of respondents said that DSL would be one of the last services eliminated if the company had to cut costs.

The best news of all is that once you have a broadband connection to the Internet you have broken the bandwidth barrier for video.