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Voice 2.0 A Year Later

When I wrote the Voice 2.0 Manifesto about a year ago, it envisioned an application-centric communications world; a marriage of telephony and the web, leading to new models for communication, and new business models for service providers. Users would regain control, and there would be a richness of services available that simply doesn’t and can’t exist under today’s telecom oligarchs.

The customer experience predicted by the Voice 2.0 Manifesto is not of a single carrier, but rather of three classes of entities — access, directory, and applications.  As a customer, you’ll pay to be part of the network, you may pay for an identity (and this is an idea who’s time will come, although it’s hard to see today), and you’ll pay for applications that that help you communicate in a diverse number of ways.  This is a very different model from the traditional, vertically integrated, communications network.

As a vendor of each of these services, you may have multiple relationships with other providers of other services.  You may provide wholesale services from some vendors, and retail your services direct to the customer.  Or, you may be the wholesaler, selling through another vendor.  Or, you may leave that choice to the consumer.  Services may be offered bundled, or unbundled.  It really doesn’t matter.

Twelve months later, that vision of Voice 2.0 is as vibrant as ever, and some of the things which the Manifesto predicted are already here. 

Today, for instance, you can buy originations and terminations from any number of service providers, ranging from the local guy I use (Unlimitel, here in Canada) to Nufone (the guy I use to terminate my US calls), Level 3, XO, Worldcom, and many many others.  Some vendors only sell wholesale; others will sell retail. You may obtain identity services from MSN, Yahoo, AOL, Google, or Skype. In those networks, your identity is wrapped tightly with presence and instant messaging.  All provide API’s, however, for third parties to access that identity, and build applications dependent on that identity. And, if none of them suit you, may choose to participate in one of the emerging identity standards, like XRI.  In addition, there are a number of interesting new applications which have hit the market like  GrandCentral,  iotum, hullo, Jangl, and many others. 

Unsurprisingly, the biggest stumbling block to the Voice 2.0 vision is the incumbent service provider.  Not only do these folks move at glacial speeds, but most regard the Voice 2.0 model as a threat, rather than an opportunity.  Today’s service provider aggregates identity, access, and applications and presents a single bill to the customer.  Today’s billing mechanism is tied to the metering of access to the network, which is the service providers physical asset.  The service provider is in control.

In a Voice 2.0 world, control is with the customer.  I buy the services I want, from whom I want.  It’s a competitive market!  In the Voice 2.0 world, the value stack, if you want, inverts. Where the primary means of monetizing network assets in the incumbent’s model was a toll on voice, in the Voice 2.0 model, the primary means is the application.  The access network provider, and the identity provider, are selling their services to the applications provider.  You, as the consumer, choose the applications you want, not just those provided by the company that delivers you access. Voice 2.0 is about you and me, not the network.  For an incumbent, that’s a scary idea.

stack inverts

This world isn’t going to all come about at once.  At VON this past fall, Jeff Pulver took us to task on the blogger’s panel for believing that tolls would ever disappear. He may be right. Myself, I believe tolls will go the way of the dinosaur, but it will take time, and arguably today tolls aren’t an issue anymore.  As many folks have pointed out this past week while critiquing Jajah and Rebtel‘s respective models, in a world where voice is already cheap who cares if it’s a little cheaper?  On many networks, voice is already cheap, but it’s not yet cheap everywhere.

Perhaps the most important step forward on the road to Voice 2.0 this year was AOL’s very gutsy developer play.  By opening their network to third party applications, AOL has said to developers “share your applications with us, and we’ll share our access and identity assets.” Unlike the Skype or SipPhone developer programs, AOL has given developers access to the network itself.  Although developers have called for a “naked” Skype, none has been forthcoming, which makes AOL’s move far more significant.  SipPhone’s initiative appears to be a clone of the Skype initiative, but addressing a smaller customer base.  And, unlike Skype or SipPhone, AOL has a shared revenue model, which insures that the applications developer and AOL are aligned around a common goal, and that AOL can participate in the success of the developer.

Think about that for a minute.  As a developer of applications, you do not need to source terminations and originations.  AOL has done that for you.  You do not need to build the network infrastructure.  AOL has also done that.  All you need do is focus on your application.

We need more AOL’s.  There have been attempts, but they have fallen short, or been terminated.  Google’s model is great, but provides only a core identity and presence service.  TelTel’s ISIPTN initiative held lots of promise, but ultimately died for lack of management support.  We need many more service providers to open their networks, and offer those services to developers as platforms.

Speaking from personal experience, it was this lack of platform that caused iotum to focus so much attention on Asterisk, and subsequently AIM Phoneline.  These platforms presented an opportunity to reach the customer, without having to deal with ILEC business processes.  We run a large hosted service which can attach to any network the customer wishes, via an XML-RPC or SOAP interface.  We use the identity and presence information you have already by interfacing with AIM and MSN today, and tomorrow any IM client you wish.  We simply provide the applications layer.  Until recently, this pure Voice 2.0 approach has been way ahead of the market. 

So, it’s easy to sympathize with both Ken Camp’s frustration that GrandCentral requires him to have yet another telephone number, and Craig Walker’s decision to provision new numbers for GrandCentral customers. Ken’s right — none of us need another phone number.  But the infrastructure that a Voice 2.0 player like Craig needs in order to deliver his application to his customer does not yet exist, except at AOL.  In all likelihood, GrandCentral was in the latter stages of delivering their application when the AOL program was announced as well.  They were probably already locked and loaded on their plan to provide new numbers.

Similarly, one of the reasons I am so bullish on Jajah (and there may be reason to be bullish on RebTel too, but I don’t have enough knowledge of their business plan to comment intelligently), is that Jajah articulates a similar platform vision.  Spend a little time chatting with Roman Scharf.  You will learn that they intend to provide web widgets for a variety of presence and click-to-call applications.  You will learn that their model is to build an ecosystem of partners all delivering services through their network.  Who cares if Jajah is a minute-stealing play today?  Where will they go with it?

Jajah, and AOL aspire to the same vision.  They’re both seeking to build a large community of users, and to expose that community of users to third party developers.  That’s so very Voice 2.0!!  Jajah’s recent mobile announcement is just one more step on that path.  They’re going to grow their community of users dramatically with this step, in part because the minutes are very cheap (except, perhaps to American customers who are already accustomed to cheap minutes), and in part because it’s completely transparent to use the service.

So, to Ted Wallingford I say “Rome wasn’t built in a day”.  These are all concrete steps to getting to Voice 2.0.  And to Ken Camp, “you’re right, it’s about the customer!”. 

Have patience, we’ll get there.  It’s a big vision, and it will take time to be realized fully.

Further to that point, here is a quote from the first draft of the iotum business plan, dated October 26th 2003:

Iotum Corporation is an Internet-based communications service provider. Iotum’s service suite offers consumers the ability to control how, when, and by whom they can be reached. Iotum is a set of integrated broadband voice services, combining multiple offerings in a self serve format at a lower price than traditional carriers. Iotum offers new merged communications capabilities, enabling a vision of always-on real-time accessibility (AORTA) for subscribers — wherever, whenever, however communications, independent of network service provider. Iotum is also a platform, allowing third party solution providers to build sophisticated voice applications and plug them into the billing and operations infrastructure that Iotum exposes.

That’s Voice 2.0!  I didn’t call it by that name, but the vision has remained the same.

Ultimately, at iotum, we chose to focus only on the iotum Relevance Engine, concluding that the vision of Voice 2.0 was too large for us to execute ourselves.  As many potential investors told us, it’s hard to boil the ocean when all you’ve got is an electric kettle. And none of them were willing to provide us with anything more than an immersion heater… Two years later, in October of 2005, I wrote the Voice 2.0 Manifesto in an attempt to articulate that vision for our industry. My hope was that you might believe the same things that I believed, and that by enrolling a multitude of others in that vision, as an industry we could move forward to a common goal.

What I wrote about in October 2003 is finally happening today.  It’s happening because Jajah, Rebtel, AOL, GrandCentral, iotum, hullo, Jangl, and a slew of other great companies are focused on building the next generation communications experience.  It’s happening because AOL, Microsoft, Google, Skype and Yahoo are opening their presence infrastructure.  It’s happening because you and I can go and buy our originations and terminations from my friend Stephan Monette at Unlimitel, or from Alan Noorda at Nufone, or anyone else that we like.  We all, finally, are beginning to have choices. 

For me, and I hope for you too, that’s cause for tremendous optimism.

{ 8 comments… add one }

  • chad allen September 30, 2006, 1:10 pm

    I like reading your article Alec. But how much is AOL paying you? It'd better be a lot.

  • Alec September 30, 2006, 1:18 pm

    Yeah — I wish it were so! At this point, we're banking on service revenues from our mutual customers, rather than any payment from them.

  • Michael Cerda September 30, 2006, 11:29 pm

    I couldn't agree more with this post. You're right, it's all about the customer. And Ken's right, people don't want yet another phone number (and I say they don't want yet another voice mail box either). The reality is, among all the Voice 2.0 companies, everyone is choosing their beach head. Some are modernizing smart number services, some are doing find me/follow me, some are doing long distance arbitrage, some are doing asynch messaging, some are doing group messaging, some are doing free voice mail boxes, and some are doing control and private identity stuff (that's us). Some will get more traction than others, and those lucky ones will have an opportunity to perform their follow on act to their respective visions. Among those, as long as everyone keeps in tact the notion of being carrier agnostic, access agnostic, and device agnostic, we're going to have a very interesting dynamic in the market place. We'll ultimately learn what consumers want, and in what order. Some things will make better sense to consumers than others. Some companies will innovate better for consumers than others. Some may win the hearts of millions of users, some will power partners, some may consolidate and some may fail. To that latter point, time is on our side, so we're all better off pushing our agendas now than we would have been in prior times. Hang on everybody.

    -MC

  • Alec October 1, 2006, 4:39 am

    Well said, Michael!

  • The VoIP Service Blo October 11, 2006, 11:10 am

    Rather than criticizing their approaches, Jajah and Rebtel should be commended for using the price factor as a motivating force to sign up new customers. And since neither of them use a subscription model, they will be forced to come up with new value added services. We are only seeing phase one of their operations, and we should be seeing more good things to come from them and other startups. Every new startup that chips into the profit margins of the telecom dinosaurs is a win for consumers. Alec, your quote is right on: "Who cares if Jajah is a minute-stealing play today? Where will they go with it?"

  • Alexander Straub October 13, 2006, 12:13 pm

    The article somehow does not mention the movement of the VoIP SIP community to mobile phone telefonie. I believe this has been neglected and is the biggest movement to eliminate the astronomical high charges the MNO's levy on us. I believe (( truphone )) to be the leader with the support of the Nokia E-Series, E61, E60 and E70. Romours is the N80 will be supported next by truphone.

  • David Beckemeyer October 13, 2006, 1:35 pm

    The "infrastucture" for Grand Central to provide their service on your existing number is there. It's called PhoneGnome.

  • Alec October 13, 2006, 4:12 pm

    Indeed, Alex. There needs be a way to attack cellular charges next. Truphone is a great example.

    David — I would love to see PhoneGnome do a deal with Grand Central.

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