The VoIP Princess Has Moved

The VoIP Princess blog has moved to TMC Net. I look forward to seeing you there:)

More on Vonage Debt Buyback

Televolution founder and CEO David Beckemeyer sent me some comments on my post Is Third Time a Charm for Vonage Debt Buyback? . David points out that there have been contrarian opinions about Vonage right along, despite the general industry cheerleading:

"The funny (sad) thing is you could have said most of these same things (no business) back in 2003. Some of us did say it back then, but the capital markets were blinded at that time. What I said back then:

• Minutes would be commoditized, cost approaches zero - at the time, Vonage was charging $40/mo and "experts" said it was cheap  
  
•  Regulatory Issues would be a nightmare - check
  
•  911 isn't going away (thus changing their cost advantage) - check
  
•  ILECs will retaliate - turns out they haven't had to, Vonage isn't a big enough threat

I recognized right away (unlike Vonage investors) that Vonage had few, if any cost advantages over a regular telco. The only difference is they don't put the wires in the ground - but unlike Cable and ILEC, that's also a disadvantage because they don't own or control the pipe into the home. And Vonage also lacks the buying power of the telcos.

But the most important problem for Vonage has, and continues to be, and I think this is still the biggest elephant in the VoIP room: THE HOME PHONE IS NOT BROKEN. It is not high enough on the radar of problems to make switching to unreliable VoIP worth the trouble, for most people."

And while we're traveling down memory lane, in Nov. 2004 I also suggested that the emperor's financial pants didn't 'pencil out' in "Is Vonage Overvalued?" Turns out I was right. Maybe I can get a job running an investment bank.

Is Third Time a Charm for Vonage Debt Buyback?

In the face of viral bank failures and an imploding credit market, it's reasonable to ask whether pure-play VoIP leader Vonage can close its debt refinancing deal, given the company's bottom-line red ink and a stock price in a death spiral.

to repurchase the remainder of its in convertible notes, the Journal story said. Vonage needed to raise money for the repurchase by December 16 or risk bankruptcy

Last month Vonage extended its offer to buyback $253 million of debt for the third time, Reuters reported on September 30. The new expiration date is Oct. 15.  Vonage launched the offer last summer in conjunction with a $215 million debt refinancing deal with hedge fund Silver Point Finance.However, the Silverpoint deal has yet to close and the parties are "still in discussion," according to the Reuters report. If Vonage deosn't raise the money by December 16, the company may go under.

Although Vonage's Q2 revenue was up 11 percent from 2007 to $228 million, the company still lost $7 million — which is better than 2007's $23 million loss for the same quarter last year. Still, "losing less money than last year" isn't a confidence-inspiring message for a company that's been in business nearly eight years. 

Jon Fisher author of Strategic Entrepreneurism: Shattering the Start-Up Entrepreneurial Myths, doesn't mince words about Vonage's prospects in the current climate — or any other, for that matter. Fisher has led three startups in the past 15 years, through booms and busts, and his most recent venture, Internet security firm Bharosa, was acquired by Oracle in 2007. One of his truisms is, "If you don't have a P&L that makes sense, you're in trouble."

"Vonage loses money quarter after quarter and year after year, and therefore I don't consider Vonage to be a company — or at least a for-profit company," he wrote in an email.

"It's companies like these that will have the most trouble attracting or refinancing capital in the wake of an unprecedented credit and liquidity crunch and I say that's a good thing. The biggest problem we have in this country is using debt to keep companies in business that are not companies."

Tough words. Then again, these are tough times. 

More on Pollsters Making the Wrong Call

Back in July I speculated that the political pollsters are getting a skewed picture because:

a)  Many of Barack Obama's strongest supporters are  young voters who 

b)  increasingly don't have landlines and as a consequence 

c)   don't get called by pollsters. 

Tonight I had the opportunity to test my theory at an open house at Obama's Santa Clara County headquarters, where the majority of people were under 35. Here are the results of my informal poll of 25 politically active young adults:

• 14 have no landline
  
• 9 live in a house where there's a landline but don't use it
  
• 2 use a landline as a primary phone -- the rest use a mobile phone as their primary phone number
  

We'll have to wait until election day to find out if the rest of my thesis is borne out. Your thoughts?

Palin and the Wireless Flat Earth

I'm not the only one who thinks that Pres. McCain-Palin would be a disaster for telecom policy. Jeffrey Silva at RCR Wireless has a story about Palin vetoing spending for wireless networks in schools. A cautionary tale about what happens when you elect public officials who think that science is a matter of theology -- not fact.

Communications technologists should be afraid of a McCain Palin government

It's been hard back into the swing of things, being distracted as I am by the Klondike Annie Oakley and her remake of the 1957 classic movie A Face in the Crowd.*

But as entertaining as the electoral circus is, those of us in Internet communications have serious reason to worry about a McCain Palin administration, given federal government's power over communications technology.

Look at the way these candidates use technology. Barack Obama has conducted a 21st century digital campaign. John McCain, on the other hand, has to have Cindy turn on the computer for him – something the average American two year-old can do.
Fact is, you can't possibly make intelligent policy about a subject you know nothing about. Think about George Bush and the Iraq war.

So let's look ahead to the communications policy of a McCain Palin administration.

Take Open Internet, an issue that means a lot to the VoIP universe. McCain: "Cindy, open the internet." Palin: "I told the government thanks, but no thanks. If we want to open internets we'll do it ourselves."

Or frequency auction policy. McCain will just get a prescription for Enablex. Palin will consult the Book of Revelation: "But in the days of the voice of the seventh angel, when he shall begin to sound, the mystery of God should be finished."

I'm not just being cynical or mean here. We're dealing with fundamental differences in worldview. Barack Obama and Joe Biden live in the modern world – the post-enlightenment world.

McCain, of course, is living in the Nixonian world of people who want to be President for Halloween – and the other 364 days of the year. All worldviews are equal, as long as he's Decider-in-Chief.  The campaign's intellectual magisterium, Sarah Palin subscribes to a pre-enlightenment worldview that has been trying to claw its way back to power ever since Galileo reported that the earth revolves around the sun.

The Inquisition didn't arrest the great astronomer because they thought he was wrong. That was secondary. They arrested him because he attacked the authority of their entire worldview: an intellectual context where facts were discernable through the prism of beliefs. Galileo said that facts were discerned by observing the evidence -- the scientific method.

If you think I'm over the top, you haven't spent time among the Assemblies of God. George Bush is Charles Darwin compared to these dead enders.

These are people who not only take the first chapter of Genesis literally, they also take literally the word "foolishness" in St. Paul's first letter to the Corinthians: "For the wisdom of this world is foolishness with God." (3:19 ). Paul was speaking specifically about the "foolishness" of a messiah who came, not as a king, but as a one of the world's poor and oppressed.

But extreme fundamentalists use this justification for willful ignorance on any and all subjects – biology, climatology, sex education, levees in New Orleans, you name it. Point out that carbon dating shows that fossils are millions of years old and they will tell you that carbon dating is a fraud. It isn’t mere irrationality. It's quite logical. Using their intellectual model, carbon dating has to be false – otherwise the 5,000-year-old-world model is wrong.

Like the Inquisition? You're gonna love the McCain Palin administration.

OK, I had my rant. Back to reality. I'll be at CTIA tomorrow and IT Expo next week. I'm moderating sessions on VoIP security and FMC. Come and say hi. I don't bite in person -- only in writing;)

*A Face in the Crowd tells the story of Lonesome Rhodes (Andy Griffith, pre-Mayberry) and his meteoric rise from a guitar-picking Ozark hustler cooling his heels in a rural jail to a demagogue, TV star and political king-maker. Rhodes' undoing comes when, off-camera, a live mic broadcasts him mocking his audience as "idiots," "morons" and "guinea pigs."

Gone Fishing

When going to jail started sounding like a restful change of scenery I knew it was time to unplug. So I decided to turn off the computer and hang out the electronic "gone fishing" sign

I'm heading for Sedona, AZ tomorrow for a week of communing with the Cosmic Vortex, and adjusting my aura and balancing my chakras with plenty of margaritas. After that I'm going to play tourist in my home turf, the San Francisco Bay Area. And, no, I will not be checking email, answering the phone, or Twittering. You are still alive even if no one is Twittering you.

See you in September or thereabouts.

Election Pollsters Making the Wrong Phone Call

A long time ago, I had a teacher who sometimes asked us to compose newspaper headlines for logic problems. His point was that one way to solve problems is by looking at them through the lens of a different paradigm.

The professor and his headlines exercise came back to me this morning as I pondered the 2008 election polls showing a close race between McCain and Obama -- so contrary to everything I see around me. (Admittedly, I live in California. But despite the notion that California exists in an alternate universe, it's also the state that elected Ronald Reagan to his first political office.)

These days I don't hear anybody -- even people I know will probably vote for him -- expressing any positive interest in McCain. But everybody is talking about Obama, including people who've probably never pulled the lever for a Democrat but are Obama supporters. 

Yet poll numbers show voters almost evenly divided between the McCain and Obama. But let's turn the problem on its head and, instead of the end point -- the answers to polling questions -- look at the process for getting to that end point. Then another explanation for the result percolates up.

Election polls reflect the pre-Internet -- or, rather  pre-Internets -- communication perspective of middle-aged political pundits and pollsters. One that assumes that everybody has a wired "home phone" on the PSTN. That's the Aha! here: Pollsters are only calling people who answer listed phone numbers supplied by the "phone company."

Do any of these pollsters and pundits have children? Or friends under 35? 

A lot of people aren't reachable on "home phones" anymore. Like my 17 year-old, they use cell phones almost exclusively. Many don't have wired phones at all. For a growing number, the "home phone" is an VoIP phone service. None of these services are listed in the "white pages."

I'm betting on lots of egg-on-pundit-faces in November. 

Mother of Invention: 8x8's Not-So-Secret Recipe for Pure-Play VoIP Success

Last Wednesday I googled "VoIP news" to check the buzz on VoIP pure-play 8x8's announcement that morning announcement of its new hosted small office "key" system and plug-and-play IP phones. The news was way, way down on the list – right behind Worldwide VoIP phone training launched by snom.

8x8 is VoIP's Rodney Dangerfield. It just gets no respect. Consider how it stacks up against its far better-known pure-play VoIP competitor, Vonage:

In the last five years, 8x8 revenues grew 460.3 percent while Vonage's grew 0.0 percent. 8x8 made $700,000 during the first quarter of this year. Vonage lost $8.9 million and is shopping for a $215 million refinancing deal to stay out of bankruptcy. 8x8 holds 73 patents. Vonage just got its first. Despite this, Vonage's stock price is $1.58 while 8x8's is $1.03.

Illustrating, I guess, the relationship of stock price to any useful reality.

The fact is that the longtime Silicon Valley company – they've occupied the same Santa Clara address for two decades – enjoys the distinction of being the only profitable pure-play VoIP company. And it's not luck or accident.

They do it by quickly innovating in the face of market and technology change; spending money on inventing and developing things – about 10 percent of revenue, according to 8x8 Director of Corporate Communications Joan Citelli -- instead of, say, gargantuan media buys.

"Necessity is the mother of invention," 8x8 Vice President of Marketing & Sales Huw Rees replies wryly when asked about the company's strategy.

The name 8x8 refers to the company's birth as a maker of math co-processors for 286 and 386 microprocessors back when dinosaurs roamed the earth, in the 1980s.

"By the 486, Intel integrated the math processor and sales dried up literally overnight," says Rees. "So what do you do then? The plan was to go into communications and develop chipsets and software used in video conferencing. In the 1990s, we had a 90 percent market share. The problem was that 90 percent of a very small market was still a very small business.

"So the idea was to sell [that technology, also used in AT&T's Picturephone] as the ViaTV videophone," he continues. "The ViaTV was quite a success – we sold about 100,000. The problem was that we had to keep discounting to keep them moving off the shelves. And the writing was on the wall that the world was going IP, so an analog videophone wasn't going to be a long term product."

It also seemed clear that video wasn't going to be the killer app for IP communications. "Voice is still the application that people can't do without," adds Rees. With its video conferencing expertise, 8x8 was already halfway there. "Take the video out and you're left with voice," Rees adds.

The company acquired some service-side businesses so it could build an end-to-end system and started selling the technology platform to service providers in the late 1990s.

But 2001 was déjà vu all over again. "The [telecom] market collapsed and we were left with technology and no customers to sell to," Rees says.

Tacking away from the platform approach, 8x8 decided to build a service for end-users, launching one of the first consumer VoIP services, Packet8, in 2002. "Ever since we made that decision our business has been growing," reports Rees.

But plenty of other companies saw potential in the nascent VoIP business, too. Vonage, Skype and others launched pure-play VoIP services in 2003, and by 2004 cable and phone companies were crashing the party.

But if the residential VoIP market was getting crowded, business VoIP was virgin territory. Seeing a problem ready for a solution, in 2004 the company launched the Packet8 Virtual Office hosted IP-PBX, which now serves 12,000 customers and is adding about 1,000 new customers each quarter.

With a solidly growing base of less price-sensitive customers, 8x8 could skip the scramble for residential VoIP subscribers at any cost to concentrate on higher-margin services and capabilities. By 2006, the company had decided to focus on business VoIP, rather than promoting residential business.

While Virtual Office targets the small-to-midsize business, this year 8x8 extended its reach at both ends of their existing market.

In June the company built on the hosted services model with its new Virtual Trunking service, delivering IP phone service -- the dial tone -- through the existing broadband connection instead of a dedicated physical line like a SIP trunk or T1.

"We'd frequently get inquiries and when we explained that Virtual Office replaced the PBX, a certain percentage of people would say: 'But we just bought a PBX,'" explains Rees. “We were missing that chunk of the market."

Because this requires no infrastructure capital investment, 8x8 can sell Virtual Trunking anyplace there's broadband service. And customers can take advantage of VoIP without wholesale change or new infrastructure, continuing to use existing equipment and phone systems – even TDM systems.

Not only does this expand 8x8's market, it also opens the door into larger companies and bigger sales. So far the market response has been better than expected, according to Rees, and about half a dozen customers are up and running.

"The interesting thing is that size of the businesses [asking for quotes] is larger than expected. Companies with many T1s are asking for quotes. There's definitely interest in the market for these services."

The Packet8 Hosted Key System – the only such offering currently on the market, according to Rees -- extends the company's market in the other direction, replacing traditional small office systems with multi-keyed phones (hence the name) that allow several people to share a single line.

"Many customers have asked for this," he says. "Many small businesses have key systems, not PBXs. From an end-user perspective, they don't have to change their behavior.

"We now have a sufficient portfolio of solutions [that] we can literally service any size business," continues Rees. "Multi-site businesses can easily standardize phone service with a single provider – across the country and across the world."

Someday we may all be sorry we didn't buy 8x8 when it was $1.03.

* * * * * * * * * * * * * * *

Communications Direct has an excellent discussion of the Packet8 hosted key system, 8x8 Finds The 'Key' To VoIP, and the technological challenges of building this seemingly simple solution. "It's actually incredibly difficult to implement using SIP," Rees told me.

But Will They Come?

In an thoughtful post this week, Phoneboy Dameon Welch-Abernathy poses the question: Is there Money in Voice APIs? In his exploration of this question, Welch-Abernathy looks at Jaduka, IfByPhone, and Ribbit.

He writes: "But is simply providing an API to your telephony infrastructure enough to prompt the world to beat a path to your door? Don’t count on it." The bottom line is that those mashups have to be useful answers to real business problems.

FCC VoIP Ruling Good -- But Why Not Apply Them to Everyone?

In a post last week, Jeff Pulver rallies the troops around the FCC's policy of exclusive federal jurisdiction for VoIP. The provocation for this decisions was a Nebraska case where standard telephone service regulation rules to Internet based voice communication in contradiction to FCC policy."

All well and good. But let's look at this beyond simply what's good for the VoIP industry.

In the early days, no one would confuse a VoIP communication with a "phone call" - you made the call differently, you used a different device. VoIP operated in a different context in our lives. So the regulations applying to phone service didn't apply -- it wasn't phone service.

But when Vonage "consumerized" VoIP by marketing it as broadband phone service, the duck rule applied. If it walks, talks, and acts like a phone call it's a phone call -- as several 2005 lawsuits against Vonage over emergency 911 calling made abundantly clear.

So here's the bottom line: If current telecom regulations are counter-productive or have outlived their usefulness -- for example the Universal Service Fee underwriting rural phone service -- then let's abolish them for all service providers. But if these regulations have merit, they should -- pardon my heresy -- apply to all providers, including VoIP.

After all, what's sauce for the goose is sauce for the gander.

If You Want Toast, Buy a Toaster

If you want to listen to the radio while eating breakfast you buy a radio for the kitchen. And if you want to make toast for breakfast you buy a toaster. You don't go looking for a radio that makes toast or a toaster that receives All Things Considered.

Sound silly? Well consider -- that's what we do when we want to surf the mobile Web. We use a…telephone handset.

Am I the only person who thinks there might be a better way? You know, something designed for reading and typing – which is how we interact with the Internet – instead of dialing and talking.

Evidently I'm not alone here, judging by Taiwanese electronics company GIGABYTE Technology's sleek new M528 mobile Internet device, scheduled to launch in Taiwan in August with 3G service from Chunghwa Telecom, according to an InfoWorld report.

The M528 is part of a new series of ultra-mobile devices unveiled by GIGABYTE in June.

Slightly larger than a PDA – 6" x 3" x ¾" – and weighing in at 12 ounces, the Linux-based (Mobile Linux) M528 features a 4.8 inch touch screen – compared with the typical mobile phone's 3 inches – a slide-out QWERTY keyboard, 802.11b/g WiFi support, 4GB disk, Bluetooth, USB ports, micro-SD card slot, a 3M-pixel camera and an application suite that includes a Firefox 3-based browser, Open Office and Skype. It's expected to retail around US$750.

It also has a SIM card slot, if you want to use it as a mobile phone. No word on whether it makes toast.

UMPC portal has more discussion on the M528, if you're interested.

8x8 - Incipient VoIP Patent Troll or 21st Century Tom Edison?

Tom Keating, among others, speculates about the implications of 8x8's most recent VoIP patent. (Full disclosure: I'm a Packet8 customer).

But speculation about whether 8x8 is preparing to open a new VoIP patent trolling profit center misses a more interesting point -- not to mention the fact that there is nothing in 8x8's history to indicate an interest in trolling for patent infringements. If they were so inclined, it's unlikely they'd need another patent.

What's important about the new patent is the fact of it, what it says about 8x8 as a company -- namely, that they invent things themselves. Now, I know that inventing and building your own "mousetrap" -- or VoIP gateway -- has been out of style for the last decade. But some of us remember when "virtualization" was called "time-sharing."

Gone with the Smartphone

TCMnet's Michael Dinan  reports the incredible news that one in three iPhone subscribers are women.

OMG.

Not merely are guys at TCMnet gaga over the fact that some of the people who bought the iPhone have two 'X' chromosomes. They apparently had to have Laura M. Holson of the New York Times tell them that. No wonder you boys can't get a date. 

Here's just one of Ms. Holson's industry-disrupting reporting in Smartphones Now Ringing for Women: 

"'It’s about time,' said Ms. Milanesi, the research director. When she used to attend mobile trade shows with a male colleague, she said, 'They showed him the cool phone and showed me the phone with a mirror.'”

I don't know which shows Ms. Milanesi attends, but this is so suspiciously stereotypical that I have to wonder if this isn't yet another case of a NYT reporter saving herself the trouble of actually talking to real sources. (I can sympathize -- it's so frustrating when sources won't cooperate with your narrative.) 

Leaving Ms. Milanesi to touch up her lipstick, Holson gilds the lily with analysis that would be blindingly obvious to the average first grader: 

“Companies need to be careful to not think that to sell smartphones they just need to be pink,” she said. “There are other things women want.”

What else could women possibly want besides a pink phone? A man who will love them in the morning? 

Excuse…effing…me.

Slightly more than half the six billion people in the world are women. Some of them have emerged sufficiently out from under the burqa to own mobile phones. Some of them – this may shock you – have even bought iPhones, reports Ms. Holson.

"In a big shift for the phone industry, women have emerged as eager buyers of not just iPhones but of all so-called smartphones — BlackBerrys, Treos and other models."

And this is All the News That's Fit to Print. I can only assume that Ms. Holson was recently sprung from a deep freeze finishing school in some bayou backwater where the little gals still dress like Cindy McCain and the underlying narrative was written by Tennessee Williams. Or maybe William Faulkner. Or maybe Captain John Smith and Pocahontas.

As for me, I think I'll go back to Tara with my Treo. Tomorrow is another day and maybe I can figure out another way to make a living.

To fork or not to fork...

Over at the Trixbox hive, it sounds like some not-so-happy bees are swarming about the recent change of direction for Trixbox, which is either a FreePBX fork or not a FreePBX fork depending a lot, it seems, on whether you're on the delivery or receiving end.

Here's the original announcement.

Doug Mohney's Requiem for VoIP

Doug Mohney's editorial in today's FierceVoIP is a trenchant comment -- maybe eulogy is a better word - on the failure of the VoIP industry, after more than 10 years, to deliver any more than hype and cheap long distance. Doug writes:

"[Jeff] Pulver wanted purple minutes, minutes of IP traffic part of an enhanced application that might include voice, data and video content. Six years later, Jeff is still looking for his honest purple minutes and innovative applications. Voice 2.0 is here, but there's been no big killer application, it's all just variations of a theme for call forwarding and voice mail and some APIs to slap voice into a web service."

Amen, brother.

More on Asterisk for Small Biz

Thirdlane CEO and founder Alex Epshteyn sent this thoughtful reply to my post Asterisk Ideal for Small Biz? Not Without Help.  

Asterisk did foster a cottage industry for packaged solutions -- with varying prices and degrees of openness. Most of these emphasize simplicity, but at the expense of one of the principal reasons for using Asterisk in the first place: its power and flexibility. It's like buying a Ferrari and only driving it in first gear.

As these Asterisk-based solutions have become widely known, the myth has taken hold that the addition of a GUI makes building a PBX “so simple, a caveman can do it.”

Yes, you can install and configure a simple PBX in an hour – but do the GUI constraints – what makes it so simple -- let you configure it exactly to your customer's needs? Not likely. Ironically, while the core of these systems is open source, they lack the customization tools system integrators need.

A side effect of the “so simple” story was that some important contributors to Asterisk's success did not receive the credit they deserved. I'm talking about system integrators – the guys who understood Asterisk’s value early, included it in their solutions and provided real world QA and "product management," driving Asterisk's development.

There's no one solution that fits all applications. When we designed the Thirdlane PBX Manager GUI, our goal was building a system that addresses the needs of systems integrators and VARs. They tell us that they need to build customer PBXs quickly, extend them to accommodate special requirements, and provide customers with tools for daily operations.

Many of Thirdlane's VARs came to us after trying other – both free and commercial – Asterisk-based systems with more "showroom appeal." Their main reason for switching to Thirdlane was that, with PBX Manager, they could always find a way to do what they needed. Their previous systems gave them only what was "in the box” -- they couldn't extend or adapt them. 

Our multi-tenant solution addresses the same needs for service providers and gives them an extensible and open platform for their hosted customers. And, they can offer customers both hosted and on-premises solutions, all within the same product family and requiring no additional training -- for both themselves and their customers.

Thirdlane is offering a downloadable trial version of Thirdlane PBX Manager. 

Skype-Killer from Telcos? Can Elephants Fly?

When I read Om Malik's "Global Telcos Plotting a Skype Rival" post this morning, one word flashed in my brain: PL/1 -- IBM's 1960s Cobol-like programming language. I learned it many moons ago, working in the IT department of a public utility. If you never heard of PL/1, there's a good reason. 

It had all the earmarks of something that was designed by committee. It was big and unwieldy, and it did everything -- almost. That was the problem. It almost did what you wanted, but not quite. 

That's the picture I get from a dozen or so telecos trying to build a VoIP client to compete with an established, easy-to-use tool that's compact, efficient and honed for its intended purpose. It's likely to be as successful as PL/1. I doubt Skype has anything to worry about from that quarter. 

Yahoo! and Jajah: Match Made in Heaven or Been There Done That?

This week's announcements about Yahoo! marrying Jajah – maybe they're just cohabitating – and AIM Open Voice APIs have everyone going gaga, racing to be first in the blogosphere with the news, and singing the industry-disruption Hallelujah Chorus.

Pardon me for being the one suggesting the emperor just might not be wearing pants.

If you think I'm being missing the boat here (and I'm fair enough to admit that's possible), take a walk with me down memory lane: Yahoo! buys Dialpad. AOL announces VoIP rollout. eBay buys Skype. Google buys GrandCentral. All of them earthshaking news at the time, or so it seemed from the laudatory tone the press took:

"Skype chief executive Niklas Zennstrom, who will join eBay's senior management team, said the deal would help 'revolutionise the ease with which people can communicate through the internet'." -- BBC News September 12, 2005

"Google's buy of the small Unified Communications (UC) tech company GrandCentral is a sign that voice communications will soon become a big part of Gmail." – PC World, July 3, 2007

"We're very excited that we'll be scaling our IP-based technology for the benefit of millions of Yahoo users," he [Dialpad CEO Vincent Paquet] said. "It will bring the ability to bring IP-to-PSTN connectivity for current and future Yahoo services." – InternetNews.com June 5, 2005

And the industry-disrupting results were…?

I'm waiting.

When was the last time you made a phone call with AIM? Or Google Talk? Or clicked-to-Skype an eBay seller to ask if those hot red Steve Madden pumps were new or worn?

And even if you did those things, making a phone call isn't exactly industry disruption – we've been doing it for 100 years.

While I'll 'fess up to a cat-like contrarian streak -- I'm still not much impressed by anything about the iPhone except its design – I think there's a serious question here: Why can't Internet companies do anything much with voice? It's not like they haven't had time or resources.

It's not a technical problem – if it were, Silicon Valley's bright boys and girls would have solved it. No, it's a paradigm problem.

Internet companies are all about helping people do things on the…Internet. They're about clicking, not calling. They're more about searching than finding.

Looking up "Italian restaurant" on Google gives you 5,730,000 search results, including Luigi's in Spokane, WA, Orlando's in Lubbock, TX and House of Kebabs in Sunnyvale, CA.

ATT, on the other hand, gives you the Yellow Pages -- with a list of under 100 close-by Italian restaurants and their phone numbers.

Local online search tools just add more steps to something that's pretty simple with a phone book. For example, Google Maps gives me 45,827 results for "Italian restaurant near Santa Clara, CA."

So I'm not going to start having hot flashes over Yahoo! and Jajah until I see something that's actually new. They might start by putting click-to-order-a-pizza in the search results.

carolyn schuk

Get Smarter About Smartphones

OK, this isn't about VoIP. But it is about phones. Sort of.

Last week, driven by desperation at the ever-increasing entropy of my life, I took People On-the-Go's Accomplishing More workshop. The brainchild of software engineer and e-marketing pioneer Pierre Khawand, People On-the-Go looks at personal organization and productivity with a view to first, keeping it simple and, second, using technology in a way that makes your life simpler, instead of more complicated.

One of those technologies is, of course, the smartphone.

A few years ago Khawand decided that he would try nine leading smartphones for nine days each. Last year he published a book, The Smartphone Experiment, a day-by-day report on his nine-by-nine experience. What makes Khawand's review more valuable than others is that his perspective is from a business user's POV. He even covers usability while driving -- not something that teen-targeting marketing considers.

The jury is still out on whether I'm more productive. But at least I'm less worried. Then again, I'm not sure that's a good sign. 

Truphone Poised for World Domination?

While others in the VoIP-sphere are speculating about whether Google will buy Skype, Dameon Welch-Abernathy at the VoIP Weblog has several interesting posts about Truphone's "plans for world domination" enabled by its purchase of SIM4Travel and US$32 million in new investment.

Asterisk Ideal for Small Biz? Not Without Help

Beware of journalists bearing glad tidings about the Next Big Thing.

Today I happened on another pitcher of open source kool-aid promoting Asterisk for small businesses. In a post on bMighty.com yesterday, Matthew Mckenzie says that Asterisk is one of the "truly exceptional [open source] success stories." I started to write a comment and it turned into an essay, so I'm taking the liberty to post an expanded version here.

Yes, Asterisk is one of the VoIP industry's greatest success stories, but before you elevate it to paradigm-shifting status I suggest asking the insurance company down the street about it. Dollars to donuts they never heard of it.

But even if a massive publicity campaign was mounted, there is a good reason why small businesses should be careful before jumping on the Asterisk bandwagon: Asterisk is notoriously difficult to use and implement. The Asterisk eco-system had its genesis in that fact (see my 2005 article Asterisk Breeds a Cottage Industry).

Enter the Asterisk-in-a-box solution. But the problem with many packaged Asterisk systems is that the only player who gets the open source benefit is the vendor, because many systems are as closed as the old style proprietary PBX.

Once you install them, you're locked into the vendor for upgrades, enhancements and equipment. Plus, typically users don't get access to the full Asterisk feature set -- which is what makes the open source PBX so attractive in the first place. So customers end up with the same old siloed communications problem when they want to do something that's not "in the box."

The argument for this limitation is simplicity. But the ultimate simplicity is not to have an on-premises system at all -- which is likely to be the preference of many small businesses. And here's the place where Asterisk may be most likely to play in the small and home office space.

Of course, that moves the Asterisk usability problem to the service provider -- who has other things on his plate besides becoming an Asterisk authority. And if Asterisk-in-a-box solutions are limiting for end users, they're doubly so for service providers.

One system that does deliver for service providers is Thirdlane Technology's PBX Manager. One of the first Asterisk management systems, PBX Manager is also the only one that supports multi-tenant installations. Further, Thirdlane uses standard Asterisk and Linux formats and tools so that it's extendable for unified communications. Plus it can be used with any IP phones so customers don't have to replace perfectly good equipment when they want to upgrade.

Bottom line: Don't believe all the snake oil you hear about open source. Check under the hood.

XO Beats the Phone Tag Game

How much of your productive time disappears into the black hole of phone tag? I can tell you, for me it's too much. That's why I was interested in Paul Korzeniowski's writeup in bMighty today about XO Communication's new XO Anywhere. It builds on unified communications to turn any phone into a "desk phone" -- ideal for those of us that don't work in "the office." Feature highlights:

- One number
- Simultaneous ring as many as 10 different devices
- Remote office functions
- "Click to dial" integration with Microsoft Outlook and Web browers
- Browser-based user interface

HelloSoft Converges on Nokia E-Series

Given that all I really care about is making a phone call, I like HelloSoft because they're greasing the skids for making phone calls without worrying about where the call actually happens. So even though I don't have a smartphone running Symbian -- at least, not yet -- I was excited by the company's news tonight about its HelloMobileCommunicator-FMC for Nokia’s E-Series handsets. HelloSoft's technology delivers seamless handoff between any access network -- Wi-Fi, WiMAX, WCDMA, EVDO and HSDPA/HSUPA. I know because I've used it.

With Nokia owning the largest single market share -- about 40 percent - of the mobile handest market, this promises a huge advance for end users. "We've leveraged Nokia's E-series to give the market more choices for Fixed Mobile Convergence," says Ron Victor, HelloSoft Vice President and General Manager for Business Development.

Expect to hear more from HelloSoft in coming months.

Earth to Digium....

It was interesting to read today that Digium is partnering up with PhoneFromHere.com to "improve and commercialize the embedded Java softphone created by Digium engineers."

I confess that as a writer I'm fascinated with this press release, which is one of the finest examples of obfuscation that has come my way in a long time. It will surely find a well-deserved place in a writing class as a 'how not to do it' example.

OK, back to business. Here's the explanation of what precisely "improve and commercialize" means here:

"PhoneFromHere.com gives Web users the opportunity to leverage person-to-person (or person-to-group) speech within the context of a Website" – commonly known as a conversation -- "increasing its traffic and stickiness by delivering worry-free, live voice chat opportunities."

But wait, there's more: "What makes PhoneFromHere.com different is that Web users are not required to download any software, surrender personal information, or even use a phone."

Duh? Exactly how do you make a phone call without a phone? Oh, with your headset! When was the last time your 85 year-old grandmother made a phone call with a headset? I thought so.

Clearly the PhoneFromHere team, UK-based Westhawk Ltd., is made up of visitors from the planet Remulak. If you think I'm being facetious, consider this from the corporate website: "Our research has shown that the web is evolving into a social environment. People like to talk." Really? Let's consume vast quantities…

However, we must take note when the company that gave birth to Asterisk decides that something is important – regardless of how badly they write. And the message here is that integrating the phone call into the website – or any other -- interaction is where the action is now.

But there are many players in this space, with a better command of earthling-speak than PhoneFromHere.com: BoldCall, eStara, IfByPhone, LivePerson, Mexuar, RingCentral…And that's just for starters.

The important point is: What's your business objective?

Letting online gamers chat with each other (although, as the parent of one, I can tell you that if 17 year-old gamers wanted to actually talk to each other they would call each other up on their cell phones) is a different goal than making it a no-brainer for people who need an electrician now to schedule a service call.

In other words, it’s the goal, not the journey.

Carl Ford at Pulvermedia is right on in his recent post describing Voice 2.0 as Communications as a Service -- CaaS. It's all about 'what' instead of 'how' and it's what The Phone Company has been doing for a century.

Admittedly, being on the 'how' side of the product curve makes for more exciting conferences. But the 'what' end of of the continuum is where the money is made because most people only spend money on end results, not methods for getting the result.

A while back when I was talking to HelloSoft's Ron Victor about the company's dual-mode handset technology, he talked about why WiFi phones never really caught on. No one cares how the call is carried, they just want to connect. So why would you want a $200 phone that can essentially only accomplish the same result as a $40 landline?

Bottom line: VoIP is now where telephony was a hundred years ago and that's a good thing.

Reflections in VON's VoIP Eye

By now everyone has heard the buzz about VoIP's pioneering conference may be joining Webvan and Pets.com in the dustbin of tech history. If you missed it, here are the reports from Marc Robbins and Om Malik. 

However, as of this writing PulverMedia still appears to be in business and the buzz looks more like the same two stories repeated hundreds of times across the VoIP blogosphere. But then, think of all those links pushing them to the top of the Google list. It's profitable as well as easy for facts to become casualties.

In the meantime I've been reflecting on Spring VON. Yes, it was very much a VoIP trade show – I think it was the "bottle blondes" in hot pants that set the Shriners Convention tone.

But as exciting at the early VON conferences were, most of us wouldn't settle for the VoIP call quality of ten -- or even five--years ago. There's something to be said for a business that's solved the basic problem. Good sound quality on phone calls isn't a bad thing.

Driven by my compulsive need to find narrative – as well as avoid honest work – I picked up on several everything-in-a-box products designed with the very small office in mind.

First up is British Columbia-based Sutus' office-in-a-black-box, Business Central. According to the company, the 12 x 12 x 3 box replaces your PBX, firewall, router, file server, wired and wireless LAN, email Server, VPN remote access support, PSTN and VoIP gateways, automated backup and even office collaboration tools. Quite a mouthful.

In a quick demo, I was able to set up a company very quickly with the GUI and make a phone call. However, some people I spoke with are skeptical that you can really put all that in a box and have it all perform at business-class levels. However, if you're operating a small office with a phone system from the 1980s and a consumer-grade Internet connection, it seems like this would have to be an improvement and a quick way to transition to VoIP.

A Business Central box costs $4,000 for 1 to 9 users and $5,500 for 10+ users, with no annual subscription fee. It runs on Windows and Mac and supports any standard Polycom IP phone.

Linksys continues to evolve their VoIP devices, packing more and more functionality into what's, literally, at hand. The $115 WRP400 broadband wireless router includes a high performance processor to handle data, voice and video; builds in the ATAs and security; and lets you run two networks. All in a package not much larger or heavier than my four year-old Palm Treo.

In the cute department, the SPA 962 includes a photo album display, which, when you're not looking at pictures of the grandkids, can be used for RSS feeds, IM chat and SIP text messages -- handy for those of us who find ourselves cooking dinner with the laptop at hand to IM our kids when dinner's ready.

For the more serious, the $160 WIP310 wireless phone comes with Linux and the SIP stack built in, and operates seamlessly with all Linksys routers.

Communigate has been busy as a clan of beavers erasing the distinction between the desktop and the Internet with the new release of its Pronto unified communications dashboard. Pronto is based on Adobe technologies and the new release adds Adobe AIR for unified multimedia and highly interactive – Web 2.0 -- applications.

Last but not least, I finally found a reason for a Skype phone to exist. IPEVO's $170 SOLO Skype desk phone is ideal for your grandparents. It comes with the Skype VoIP client built in – no computer required – and plugs directly into a broadband Internet connection. IPEVO also offers a $30 Skype USB handset.

Open Source VoIP Hitting Mainstream?

Small biz newsletter bMighty has a story today about open source VoIP -- a clear indication that the idea has percolated into the mainstream. But small businesses, which typically don't have extensive in-house technical resources, need to look carefully at open source solutions.

Asterisk, the first and best-known open source IP-PBX, is notoriously difficult to use and manage -- sending users looking for an interface to ease the pain. But too often the interface turns Asterisk PBX into another closed system with all the drawbacks of a proprietary PBX -- high cost and limited choice. In this scenario, the only party that benefits from the open source is the vendor who is able to jump start his development with free source code. 

eComm - An Eclectic Snapshot of Communications

To describe the flavor of Lee Dryburgh's debut Emerging Communications conference this past week in a few words, I offer this vignette:

In the lobby internetworking philosopher Bob Frankston and Microsoft sociologist Marc Smith were talking about -- well I'm not sure what – when I overheard one of them say, "You have to have naturalism before you can have Darwin."

This is not your typical business conference conversation. And that's what makes eComm an interesting place to be. It's not the usual suspects saying the usual things.

Take IfByPhone CEO Irv Shapiro on the Mobile Phone Mashups panel Thursday afternoon.

In a crowd of folks who are certain that we will want to use that device we quaintly still call a "phone" for everything imaginable and as yet unimaginable, Shapiro is definitely something of an iconoclast.

He thinks that lots of people simply want to use a phone to…make a phone call. IfByPhone's business is expanding the phone's usefulness by doing smarter things with the call – not the device.

"If you use voice and touch tones you can reach 100 percent of devices – including rotary phones," he says. "I'm not proposing they read a newspaper on the telephone." But you can get a lot of discrete information from that phone call and do a lot of smart things with it – none of which require anyone to buy a $400 iPhone.

At eComm you could also catch Homebrew Mobile Phone Club co-founder Meadhbh Hamrick tinkering with his R-Phone ("our" phone) which looks like…a circuit board in a yellow box with a touch screen.

Hamrick started building his own mobile phones three years ago when "it became very obvious they [PalmSource, where he was a technical lead] weren't going to make anything I wanted any time soon."

So he started building his own open phone that could be programmed to do anything he wanted.

"I was building it at the time I came to the 30th anniversary of the Homebrew Computing Club," he says. "And all of a sudden it started to make sense: They didn't have access to mainframes to they built their own. [in the same way today] People would have to pay a lot to get access to systems like Symbian. So decided to see if anybody else was interested in building cell phones."

It was only after the club has been meeting for a while that Hamrick had his Aha! moment about the commercial potential all this. People starting coming to the club, telling Hamrick that the phone was "just what I need" for some very specific, niche applications.

"The open software is key for niche markets," says Hamrick. "These are small communities, but high margin businesses."

Who knows? Maybe that niche gizmo could even make -- dare I say it? -- a phone call.