Your Corporate YouTube: Build or Buy? A guide to getting the best ROI on your video investment - Panopto Video Platform

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Published on March 5, 2014

Author: panopto



Panopto makes it easy to record, share, and search video–in a single solution that runs on any laptop.

Panopto’s video content management system automatically standardizes almost any video camera, then automatically encodes and uploads to a secure, searchable “Enterprise YouTube” of video content that can be shared internally or with partners and customers.

For more, visit or call 855.PANOPTO today.

YOUR CORPORATE YOUTUBE: BUILD OR BUY? How Microsoft spent millions of dollars more than it needed to on a video content management system —and why you don’t have to. 855.PANOPTO

BRINGING EVERYTHING INTO VIEW For most companies, informal peer-to-peer knowledge sharing has been alive since the founding day, and for good reason—those ask-the-experts sessions are an immensely valuable way for your team to learn from one another, transfer institutional knowledge, and build your competitive advantage. Which is why in 2007, one forward-thinking company created a video portal to capture employee-generated content for knowledge sharing, training and engagement. That company was Microsoft, and the direct IT costs alone to create and maintain that new video system was an eye-popping $2.49 million over the first 3 years. Perhaps more amazingly, even at that cost the platform was a runaway success, yielding a 569% ROI and a cost avoidance of $13.9 million annually by Microsoft’s own calculations. In this paper, we take a deeper look into the case for enterprise video and Microsoft’s rationale for such a steep investment. We further detail just how Microsoft went about building its solution, and how it calculated ROI. Finally, we discuss the biggest question: when it comes to video content management, should your organization build or buy? In Microsoft’s case, we show cost comparisons and calculate that the software giant unnecessarily spent at 7-figure costs in IT spend alone in developing its video content management system, and still didn’t gain the many functional capabilities available off the shelf by modern VCMS solutions. In the end, we conclude that for most organizations, sourcing an established VCMS will provide much better return on investment by delivering all the benefits of business video with dramatically reduced requirements for engineering and operations, and also provide expanded and continually-enhanced functionality that would otherwise be virtually impossible to budget for internally. On the question of build or buy, the answer for most when it comes to video content management will be buy. 2 of 18

PANOPTO ON A PAGE Panopto creates software that enables businesses and academic institutions to record and view searchable video presentations in minutes from any device. Businesses can use Panopto to record and live stream: • Employee training and onboarding videos • Review, recap, and summary communications • Product demonstrations • All-hands meetings • Sales and marketing presentations • Web conferences • Executive communications • Events for customers, press, and investors Panopto also enables individual employees to record and share videos in a secure, centralized video library. This facilitates: • Social and informal learning • Capturing the knowledge of retiring employees • Sharing knowledge across a global workforce Panopto’s video library includes unique search functionality that enables employees to search inside videos for any word mentioned or shown onscreen during a video. Panopto is currently in use at Fortune 500 companies around the world and is the fastest-growing lecture capture solution at leading universities. Privatelyheld, Panopto was founded in 2007 by technology entrepreneurs and software design veterans at Carnegie Mellon University’s School of Computer Science. The company was recently recognized by Gartner as the only “Visionary” in its 2013 Enterprise Video Content Management Magic Quadrant. Learn more at Want to try Panopto for yourself? Visit today for a free 30-day trial or to schedule a demonstration of our software. 3 of 18

YOUR CORPORATE YOUTUBE: BUILD OR BUY OVERVIEW Introduction The Multi-Million Dollar Decision.............................................................................. 5 Enterprise Video in 2016: How We’ll All Spend 45 Minutes Every Day.................... 6 Microsoft’s Video Content Management System How Microsoft Decided To Build A Video Content Management System............. 7 Building Microsoft’s Corporate YouTube: The Details.............................................. 8 Was It Worth It? Microsoft Calculates ROI.............................................................. 10 Cost Comparison: What If Microsoft Had Bought Its VCMS?................................ 10 Your Organization’s Video Content Management System Your Decision: Why Buying is Better than Building................................................. 11 In 108 Words: Why Panopto should be your VCMS................................................ 17 Key Takeaways......................................................................................................... 18 4 of 18

THE MULTI-MILLION DOLLAR DECISION The meteoric rise of social media has taught us many things—the surprising popularity of cat videos, for one—but even more profoundly, social media has taught us this: Everyone has insight, and everyone wants to share it. While it’s easy to laugh off the latest viral meme, that impulse to share isn’t limited to outside of working hours. Your people are just as comfortable sharing their subject matter expertise—work-related subject matter expertise—in office, if you give them the chance. For most companies, such informal peer-to-peer learning has been alive since the founding day. In-house experts field “quick question” emails and instant messages all the time. Some organizations even hold “brown-bag” meetings where team members can demonstrate best practices for common tools. All those ask-the-expert sessions are an immensely valuable way for your team to learn from one another, transfer institutional knowledge, and build your competitive advantage. There’s only one problem: they don’t work unless your expert is right at hand. If your expert is tied up in meetings, on a call, travelling, out sick, or worst of all, handing in their two-week’s notice, all that knowledge is lost to you. Unless you find a way to record it. Which is why all the way back in 2007, one forward-thinking company created a video portal for employee-generated content for the purposes of knowledge sharing, training and engagement. That company was Microsoft. The cost to create and maintain that system: $2.49 million in IT costs alone over the first 3 years. They called it the Microsoft Academy portal, and believe it or not, they’ll tell you it was worth the cost. They even released a detailed report you can find linked in our Citations page, providing a thorough breakdown of the massive project’s return on investment—and the numbers speak for themselves. 5 of 18

But—that $2.49 million figure is a bit steep for most organizations. We’re betting it was no easy pitch even for Microsoft. That’s especially true today, as video content management system (VCMS, or “corporate YouTube”) technology has become more readily sourced, making it comparatively easy to stand up an internal video library, complete with features to enable recording, live streaming, editing, viewing, transcoding, reporting, and more. So when it comes to enabling video across your organization, what’s better: Build or Buy? BY 2016, 45 MINUTES EACH DAY WILL BE SPENT WATCHING BUSINESS VIDEO We’ll get to the question of build versus buy, as well as to the details of Microsoft’s answer, shortly. First, let’s address an even more basic question: why should businesses bother with video management at all? The answer is simple: business video isn’t coming. It’s already here. Gartner Research projects that, by 2016, large companies will stream more than 16 hours of video per worker, per month,1 up from 10.8 hours in 2012 and 7.2 hours in 2010.2 That works out to 45 minutes every day each of your employees will spend watching your business videos. The push to video will be felt especially among mid-size and larger organizations. Forrester Research notes that among larger businesses, already nearly half report having implemented or expanded implementation for video.3 Among mid-size businesses, 40% report likewise. Online video consumption on the whole is exploding. Leading digital data resource ComScore’s Video Metrix service reported that 188.2 million Americans—86.9 percent of the U.S. Internet audience—watched 52.4 billion online content videos in December 2013, for a total of 1,164.5 minutes per viewer.4 That’s more than 19 hours per month! While business video viewership hasn’t yet reached the bandwidth-straining levels of off-hours video, the trend is clear. Online video is valuable, and it’s something people want. The only difference between at-home viewership and in-office viewership is that businesses have been given more time to get their video management right. The analysts agree. Phillipp Karcher of Forrester Research writes that leading adopters of enterprise video today already have video content management systems that enable live and on-demand video distribution, video-enabled intranets, videoconferencing, access on smartphones and tablets, social features, and user-generated content.5 6 of 18

And so, Microsoft decided to create just that. The result: the Microsoft Academy portal, an allin-one SharePoint-based video content management system. In other words: they decided to build their own corporate YouTube—all by themselves. HOW MICROSOFT DECIDED TO BUILD A VIDEO CONTENT MANAGEMENT SYSTEM A nearly $2.5 million investment is no small sum, but Microsoft will tell you it was worth every penny and more. In fact, they’ve already exactly that—in their recent case study, “ROI of Building a Companywide, Video Podcasting Portal Using Microsoft® SharePoint® 2010: How Microsoft Academy facilitated peer-to-peer knowledge sharing, improved learning, and enabled virtual events while reducing costs”.6 In this section, we’ll review Microsoft’s rationale for this great investment in depth, including their detailed calculation of ROI. Then, we’ll look at what Microsoft could have done had they sourced the system instead. Microsoft started its Academy portal with a number of goals in mind: • To significantly decrease the number of expensive instructor-led, onsite training sessions and other live events, and to more easily share video from those live events that do take place; • To promote knowledge sharing by subject matter experts (where they also noted, “Almost everyone in your organization is a SME in one form or another”); • To increase the speed and convenience of that knowledge sharing, especially across disparate teams, thereby boosting the company’s competitive advantage; • To provide employees with a central repository for video content that can be viewed on demand; • To provide users with additional video-related functionality, including mobile uploading and content searching and subscribing; • To encourage a less hierarchical, more open company culture; and finally, • To encourage employee engagement by meeting three key needs people have, namely: sharing, learning and connecting. 7 of 18

“The Academy portal is based on the fundamental premise that timely knowledge is power, and that a company culture that fosters continuous learning is the basis of innovation and creativity that enables a more agile response to market opportunities,” Microsoft contends. With the goals above in mind, Microsoft began to develop the Academy portal to address the common needs of what it considered to be four key business scenarios: • Knowledge sharing by managers and other key decision makers • Substitution for expensive onsite employee training • Substitution for events both large and small, including conferences • Peer-to-peer knowledge sharing and learning With these benefits in mind, the idea for the Microsoft Academy portal was born. However, a project of this size is rarely without its challenges, and this one was no exception. BUILDING MICROSOFT’S CORPORATE YOUTUBE To say that the Academy portal was a massive undertaking is not an exaggeration. A highly ambitious project, it was built and launched at a total cost of $6.2 million (including both IT and business management costs) over three years’ time. Since then, Microsoft has incurred further expense for ongoing maintenance, continued technology enhancements, program and product management, and promotional efforts. First, however, they had to get the project off the ground, and that wasn’t easy. Here’s a small slice of what was required: Executive management approval Promoting the idea early and often with a vast group of internal stakeholders was essential to the initial buyoff on the initiative. Without cross-organization executive support, some teams may have simply ignored the tool and the overall value would have been reduced. Custom software engineering Microsoft built its VCMS with custom code. It was detailed, extensive work—so much so that some of new code would eventually be included it in later releases of SharePoint. A complete video content management system has a long list of features, and Microsoft sought to build some of the essentials: • A single, enterprise-wide library that could store video and media assets; 8 of 18

• Transcoding to convert uploaded videos for compatible playback on a range of devices; • The ability to share videos internally via social sharing and promotion; • The ability to add metadata to videos, and for others to search that metadata to find relevant videos; and • The ability to easily download and upload content from anywhere It’s a large list, and as of the writing of their case study, one that’s still being tackled. Staffing a video content portal team Although Microsoft already has a large learning and development organization, the sheer size of this investment meant Microsoft also saw fit to create a new team of Microsoft employees to help create and manage podcasts. The Academy portal team was allocated annual budget for product development and internal awareness promotions, as well as responsibility for the strategy and direction of how the tool is used internally. For many organizations, establishing a new team for the development, management, and promotion of a video portal is unfeasible. More commonly, responsibility for VCMS management and promotion becomes a joint effort between the line or lines of business that upload and view content, and the IT organization. Internal employee promotion and marketing Most internal programs only survive after launch if employees actually use them. Video content management systems are no different, so Microsoft actively promoted the initiative to ensure strong adoption. The Academy portal team worked with a creative marketing agency to create a logo and a series of promotional flyers and conference materials. Banners were placed across the Microsoft campus. Part of the promotional efforts included loaning employees small video cameras, screen recording software, and audio recorders in order to encourage content production. The massive push paid off. Microsoft saw unique users as a percent of internal headcount (a key adoption metric) rise from 11% in the first year to 53% by year three. 9 of 18

Custom content management services As part of their efforts to ensure the portal increases in popularity, Microsoft employees don’t just provide IT services—they also assist with content uploading, adding relevant search tags, writing content owner biographies and more. WAS IT WORTH IT? MICROSOFT CALCULATES ROI Microsoft concludes its case study by discussing in detail the return on investment they’ve calculated for Academy portal, and the results are stunning. Broken out by category: • For substitution of classroom trainings, they calculated an ROI of 18x. • For substitution of smaller in-person events, ROI came in at 5x • And for substitution of large events, ROI was 79x. “Overall, the money spent on Academy over a 3-year lifespan was about $2.1 million per year, but the total costs saved and avoided per year were about $13.9 million. ROI for the 3-year period is estimated at 569%,” the case study reads. COST COMPARISON: WHAT IF MICROSOFT HAD BOUGHT ITS VCMS? For Microsoft, the benefits were worth the huge efforts, high price tag and lengthy process of building a video content management system. But what if they had just sourced one instead? First, Microsoft would have saved money. Microsoft attributes 40% of the Academy portal’s $6.2 million price tag—$2.49 million in total— to direct IT-related costs, including hardware and software, management, hosting, support, and implementation. The rest is chalked up to overhead and operating costs, including program and account managers, business operations, and marketing promotions. Compare that to a sourced option. At Panopto, monthly per user pricing ranges from just under $50 down to about $30 for small and midsized organizations. For larger organizations, monthly per user costs range from about $30 down to $10. 10 of 18

For a company like Microsoft—an enormous global organization rolling out a full VCMS company-wide all at once—and based on their 3-year Academy portal adoption rates, an onpremises Panopto implementation would amount to a 7-figure savings. And that’s just specific to the needs of Microsoft. Many organizations—even large organizations—would see much lower costs for sourcing a VCMS. For cost specifics for your organization, contact Panopto at 855.PANOPTO or on Second, Microsoft would have gotten a more advanced video platform. Not only would Microsoft had spent less to source their VCMS, they’d have gotten virtually instant access to a complete, fully-functional VCMS that already does everything they had scoped and much more—without the multi-year setup process. YOUR DECISION: WHY BUYING IS BETTER THAN BUILDING If an organization with the software development and operational expertise of Microsoft can’t build a video content management system in-house without spending exorbitantly more than necessary, the answer to the question of build or buy for most organizations becomes clear. For most businesses, sourcing an established VCMS offers two distinct advantages over building your own: • A sourced VCMS costs less, up front and over time—improving ROI by delivering all the benefits while reducing requirements for development, operations, and support • A sourced VCMS does more, offering expanded, continually-enhanced functionality Let’s take a look into each. #1: BUYING A VCMS ENABLES GREATER RETURN ON INVESTMENT At Microsoft, the Academy portal caught on fast. With over 50 percent of Microsoft employees using the Academy portal on a regular basis, a nice return on investment is almost assured—even on an investment as large as Microsoft’s. By Microsoft’s own calculations their investment in video content management has yielded 11 of 18

a 569% ROI, driven largely by calculated cost avoidance of $13.9 million annually in saved training and travel fees. Yet that fact remains—Microsoft spent far more in IT costs alone than they needed to. So, why is there such a difference in the ROI of building your own VCMS like Microsoft did and sourcing from a vendor like Panopto? Well, here are a few: Reduced initial build costs Developing a video content management system requires a deep understanding of video technology and massive-scale digital libraries. Microsoft is in the great minority of enterprises with expertise in both, and even with this expertise, the company was still building the portal three years after the project began. It’s hard to overstate the amount of effort required to build a video content management system. Organizations considering this option will have to code, test, and scale technology that enables transcoding of different and evolving video formats, storage and management of multi-gigabyte files and multi-terabyte libraries, big data analytics, access control, integration with existing systems, metadata management, video streaming, and unstructured data search, and more. This of course doesn’t account for the additional, often essential features that Microsoft didn’t include in the Academy portal. These are covered below. Reduced maintenance costs Sourcing your VCMS helps reduce the burden of product maintenance. Working with a vendor reduces the amount of internal resources required to support the system, and most VCMS vendors make their support teams available 24x7 to respond to any issue and ensure it’s resolved quickly. Along with support, you can rely on your vendor’s team to ensure that your product is always up-to-date. Video content management systems that are hosted in the cloud receive automatic upgrades to the latest release, and for on-premises deployments like Microsoft’s, VCMS vendors typically provide upgrade assistance. Cost savings through cloud hosting at scale Working with a VCMS provider allows you to take advantage of the reduced costs these organizations can offer through their own scale. It’s no secret that cloud storage has seen costs plummet as providers wage a longterm price war.7—major VCMS providers are reaping those savings by using storage at vast scale, and then passing the savings on to their clients. 12 of 18

Sourcing is fast In-house IT projects can take months to identify product requirements. Add to that the design, development, and testing time required to build and deploy a video library and it’s easy to understand why Microsoft’s project was still in development 3 years after launch. Sourcing eliminates virtually all those cycles, often even when custom additions or features are required. A sourced VCMS can bring all the value as Microsoft experienced when it built its Academy portal. And they can do so dramatically faster, and at dramatically lower cost. #2: BUYING A VCMS DELIVERS EXPANDED, CONTINUALLY-ENHANCED FUNCTIONALITY Microsoft leveraged its SharePoint technology to build its Academy portal, creating a library for video that supported file upload, download, sharing, and basic search. And yet, feature for feature, Microsoft Academy portal lags behind the off-the-shelf versions of many available VCMS options. Consider what a modern video platform like Panopto enables: The ability to record HD video content from laptops and mobile devices While Academy portal enables users to upload video, the ability to actually record videos is totally absent from Microsoft’s solution. That creates a whole set of questions for the user: how to make a recording; how to manage video quality and sound settings; how to get a final recording into the VCMS; and more. These all represent hurdles to adoption and will likely generate requests for technical support. Modern VCMS solutions like Panopto also enable video upload, but just as importantly, they integrate recording right into the software, allowing users to simply open the program, select cameras and settings, click “record”, and present. Videos are automatically uploaded as soon as the user clicks “stop”—eliminating the challenge of getting video from the recorder to the library. 13 of 18

Additionally, modern VCMS solutions have the ability to integrate multiple streams of video, including additional cameras, screen capture from a laptop or desktop, video from mobile devices, embedded web pages and more. Live streaming for webcasting events One of the most prominent use cases for a video library is capturing training events and industry conferences so viewers can watch them at a later date. That’s a valuable use for video—but there’s no need to make viewers wait. A VCMS can enable your team to stream video of that event live as it’s happening. Streaming live video of events and presentations used to require expensive AV equipment and professional services. That’s increasingly not the case anymore—with just Panopto and a Windows laptop, your team can webcast video to tens of thousands of people around the world in just a few mouse clicks. A modern VCMS like Panopto can even enable one PC to stream multiple angles from multiple cameras and other inputs (such as a screen share or PowerPoint presentation), and can even allow for multiple video feeds using a distributed network of laptops and recording devices—and automatically sync it all to provide your viewers with a single viewing experience. And for those members of your audience who can’t attend the live feed, webcasts are still automatically recorded and uploaded into your VCMS and are encoded for later playback on any device. Video search that actually finds every relevant video Video only adds value to your organization if your employees can actually find them. Historically, searching video content has always been particularly difficult—meaning that all too many videos have gone undiscovered, even when they’d have been exactly what an employee needed to see. Microsoft attempted to offer video search with the Academy portal, but the solution is far from perfect. The platform relies on the traditional means of video search— manually entered metadata. 14 of 18

Any time a user uploads a video to the Microsoft Academy portal, they are then tasked with adding keywords to help describe the content of a video. This process, while essential, has proved cumbersome enough on the Academy portal that Microsoft has gone to the expense of staffing a content management team to add these tags and keywords on behalf of the users. The system then indexes these keywords, along with the video title and author for future search queries. While this is the traditional way to search video, it presents two problems: 1. It requires even more manual work by the content creators, instead of allowing them to just hit “share”; and 2. Even with all that extra work, it still doesn’t find everything. Business video can also be long—sometimes 60 minutes or more. A short set of keywords can’t possibly convey everything covered in that time. A tremendous amount of potentially valuable information is going to be overlooked. And even if your employees manage to find a relevant video, the traditional search index won’t tell them where in the video they need to watch—they’ll have to simply scan and hope to find the specific moment by chance. Compare that to a modern VCMS like Panopto, which automatically uploads and indexes all the text in any presentation slides—even speakers notes—and makes it searchable—without requiring the added expense of staffing a content management team. If your video is transcribed, Panopto adds the entire transcription to the search index – meaning your employees can search by a specific phrase and find the exact moment they were looking for. Best of all, Panopto’s search index returns not only the video, but the specific moment within the video relevant to the search query. With one click, your employees can jump right to the specific moment in the video they needed to see. Panopto does all this for every video in your library, so your employees can find exactly what they need, every time—even if they don’t know exactly what they are looking for. 15 of 18

A simple means to edit video inside the VCMS Quite possibly the most common concern people have with video is simply, “how do I edit out the part where something didn’t go perfectly?” It’s a fair question, and can be a hurdle to user adoption. Unfortunately, many standalone solutions for video editing are designed for professional videographers. They do a great job for those with a little knowhow and experience, but often are tooadvanced for casual users. So how can you enable editing without requiring your people to become experts in production? Panopto’s VCMS provides a web-based editor that can be launched from any laptop, in any browser. It makes trimming video, adding metadata, and splicing in other video files as easy as clicking and dragging a mouse. Many modern VCMS options also use what’s called “non-destructive” editing, saving the original video in full regardless of any edits made. Mistakes are no problem—just click Revert, and you’ve got your original video back. A mobile-ready video experience Gone are the days of assuming you can build something just for Windows and Internet Explorer. The proliferation of Bring Your Own Device means IT teams can no longer simply build internal solutions for a small set of preapproved hardware options running a restricted set of software—new software needs to support any system your people may bring to it. That’s no small challenge. Fortunately, modern VCMS options like Panopto already have you covered, and include automatic standardization of different file types and transcoding into mobile-optimized HTML5 and app-based viewers. 16 of 18

An eye on the future of video Internal IT projects inherently must set a target and achieve it. Few are granted the budget and ability required to keep pace with industry developments, adapting and facilitating each new standard and option. In an industry as fast-paced as video, it’s exceptionally difficult to keep even advanced platforms current—especially if they aren’t part of your core competencies to begin with. The coming age of wearable technology complete with video recorders—smart watches, glasses, and everything else—leaves you with enough to think about already. Modern VCMS providers take care of the future planning for you, enabling your people to bring the latest devices, recorders, viewers, file types, social sharing requests, and anything else they can think of—and get everything they expect. IN 108 WORDS: WHY PANOPTO SHOULD BE YOUR VCMS Microsoft Academy portal was a massive undertaking—and a huge success: huge, fast ROI; $13 million in annual costs savings; and an improved culture of learning. Its only drawback: it ran up seven-figures in unnecessary costs over its first three years. Panopto makes it easy to record, store, share, and search video—in a single solution that requires no specialized hardware and minimal training. Panopto’s video content management system automatically standardizes almost any video camera, then automatically encodes and uploads to a secure, searchable “Enterprise YouTube” of video content that can be shared internally or with partners and customers. Simply stated, Panopto does more—and costs less. 17 of 18

KEY TAKEAWAYS A great video platform is a proven means to deliver fast, effective knowledge sharing, lowoverhead training, increased employee engagement and an improved corporate culture. It’s an investment with returns many companies would be interested in at nearly any price. But unless video content management is an organizational core competency, opt to buy, not build, a VCMS. For most businesses, sourcing an established VCMS will provide superior return on investment by delivering all the benefits of business video with dramatically reduced requirements for development, and also provide expanded and continuallyenhanced functionality that would otherwise be virtually impossible to budget for internally. When it’s time to buy, be sure to look at Panopto. Listed as the only “Visionary” in Gartner’s Magic Quadrant for Enterprise Video Content Management, Panopto makes business video easy. CITATIONS 1. Gartner Research. Predicts 2012: Plan for Cloud, Mobility and ‘Big Content’ in Your ECM Strategy. 2. Gartner Research. User Survey Analysis: Video Content Management and Delivery: Streaming Goes Mainstream. 3. Forrester Research. The Immediate Future of Enterprise Video. 4. comScore. December 2013 US Online Video Rankings. December_2013_US_Online_Video_Rankings 5. Forrester Research. The Immediate Future of Enterprise Video. 6. Microsoft. ROI of Building a Company-wide, Video Podcasting Portal Using Microsoft SharePoint Microsoft%20Academy_Return%20on%20Investment%20(ROI)%20White%20Paper.pdf 7. Network World. Cloud Prices War. 8. TechRepublic. Six Things Your IT Department Should Stop Doing Today. 18 of 18

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