Businesses have been seduced by the promise of videoconferencing (VC) for decades. But it wasn't until the 1990s, when increases in the sophistication of compression technology allowed companies to send real time video messages, complete with sound, across an internet protocol (IP) network, that the technology was taken seriously. Even then, latency (the time it takes for the data packet to arrive) made regular conversations almost impossible. As Marthin De Beer, vice president of Cisco's emerging markets technology group, points out: "The quality was so bad that you wouldn't even recognise each other in the street afterwards."

Cisco reckons it has solved that problem. But in an overcrowded market, so does Hewlett Packard, Teliris, Microsoft, and Polycom. That the latter managed to launch its latest range of VC products, under the UltimateHD banner, on exactly the same day as the launch of Cisco's TelePresence product, tells you all you need to know about the competitiveness of this market. Cisco is a relative newcomer, but De Beer is already convinced his firm can turn TelePresence into a billion-dollar business. While the quality of the major players' products is undoubtedly improving, what's helping VC providers even further is a backdrop to sell the product against: namely, the environment. VC is considered "green" because it encourages executives to travel less.

And there's hardly a boardroom in the land that hasn't at least discussed cutting its carbon footprint in the last 12 months. With much of the City hoping to follow HSBC's lead in going carbon-neutral, VC technology has become the latest must-have item. De Beer reckons TelePresence will help Cisco shave $100m from its own annual travel budget-and for a company based in California, that's a lot of transatlantic flights, a likely 10 per cent reduction in its carbon emissions.

Cisco's debut product is an impressive piece of kit. Clever compression technology has enabled it to squeeze enough data down the pipe to produce a resolution twice as clear as high definition TV, with hardly any latency. "It's as if you're talking in the same room," says De Beer. Three 65-inch plasma screens, projecting a life-size image of the people on the other end of the transmission, add to that futuristic feeling (which sometimes borders on creepy).

Such technological wizardry doesn't come cheap. The model Director was shown, the TelePresence 3000, is listed at £160,000 per station. And you'll need two: one on either side of the Atlantic, for example, will set you back £320,000. The basic TelePresence 1000 model, designed for one-on-one meetings, is priced at £42,000 per station.

Both are available from this month, but it will be a while before the device becomes affordable for the small business community. According to Cisco's head of technology and corporate marketing Phil Smith, the cost should be set against "the amount companies will save on corporate travel". But Marc Trachtenbergbear, CEO  at Teliris, says it's worth bearing in mind Cisco's product "is clearly a first-generation offering, with significant compromises and limitations." He adds that for the same money, his company's offering has "multipoint meeting capability" and "connectivity outside the enterprise."

TelePresence is also up against HP's Halo Collaboration Studio, developed specifically for film production company DreamWorks. While the price may have fallen since its launch last year, it's still among the most expensive on the market. For smaller firms there are more cost-effective systems available. Polycom's latest product, says Ray McGroarty, director of solutions and marketing, is being targeted at firms interested in trying the technology for the first time. Its HDX models, he says, can handle up to six people on one call and are suitable for communication with a firm's supply network.

Installing a room based on HDX technology costs around £12,000, but if that's still beyond the limits of your budget, it might be worth hanging on for Microsoft's RoundTable, out next year. The tabletop device, which plugs straight into Office Live Meeting, records a 360-degree, panoramic video of everyone taking part in the conference call. It tracks the flow of the conversation, and focuses on the image and voice of the person who is speaking. It should retail for under £2,000.

McGroarty says ultimately it's not about the power of the equipment in your videoconferencing room, but how your whole company communicates. "Unified collaboration means that you get into the meeting with the tool you have in your hand at that time-your mobile, your desk phone, or whatever. It doesn't matter whether you're in the back of a taxi in New York, or getting out of bed in Beijing. Businesses can say 'the meeting is happening now.'"