 room-system market growth came from the low-bandwidth sector and, in the early 1990s, PictureTel assumed the lead in the global videoconferencing marketplace. In 1985, VTEL (formerly VideoTelecom Corporation) was founded in Austin, Texas. In 1986, it developed a line of PC-based systems for the LAN environment. Customers were not ready for LAN-based video communication applications, and the company shifted its attention to conferencing over the circuit-switched WAN. In 1989, VTEL began shipping the Conference System 200 and 300. Competing in the low-bandwidth end of the market (56-768 Kbps), these offered a new twist. VTEL used a 386-PC platform and based its products on DOS. For the first time, some videoconference system upgrading could be achieved by simply shipping customers a new set of floppy disks. Group Systems Through the years, VTEL wisely focused on vertical markets such as telemedicine, distance learning, legal/judicial, and finance. VTEL has done particularly well in telemedicine and distance learning markets and sells more systems there than all other manufacturers combined. In the early 1990s, the video communication industry experienced upheaval. Standards were approved and codecs were mass-produced. The popularity of low-end roll-abouts resulted in deep margin cuts. Intel announced ProShare in 1995 and began to move the market toward the desktop. The room-system market did not dry up, but many customers began rethinking strategies. With desktop-focused contenders such as Microsoft, the mix of suppliers has vastly changed. This is not to say that Polycom and VTEL do not also sell into the desktop market, it is to say that the dominant room-system codec suppliers' commodious days are done. While market growth is soaring, margins are being squeezed. Desktop-orientation fueled the standards-effort, which extends across all classes of product. The plug-and-play approach simplifies a network administrator's life and protects the corporate investment. It is unheard of today to buy a group-oriented syst