December 2008

Yesterday’s 2008: The Year that VoIP Died generated a slew of interesting responses.

Jon Arnold and Andy Abramson wrote me in email to say that I had made the same points that they had.  While it’s true that I made many of the same points, my view of their meaning is perhaps different.  I don’t see a bright future for those who are in the “VoIP business”.  I do see a very bright future for communications innovators.

In 10 points about the death of Voice over IP Ted Wallingford lists his own reasons for believing that VoIP is done, including noting the fact that “Everywhere you look, former VoIP honchos are turning to social media applications as a focus area–from Jeff Pulver to Ken Camp to myself. It’s a trend. Social media is where the opportunity for innovation in unified communications still exists.”  There’s some truth in that statement, no doubt!

On Twitter, VoIPSupply’s Garrett Smith and I mixed it up, with Garrett asserting that “VoIP lives – just not how it was once thought of by the collective.”  I should clarify that I believe strongly that there will be a market for the VoIP communications devices and products that Garrett sells. They’ll be sold as “Unified Communications” products and platforms for businesses.  At some point in the not too distant future VoIPSupply will likely re-brand — away from VoIP.

CircleID’s Ali Farschian also contacted me and asked if he could repost the piece on CircleID.  It generated two comments, one agreeing  and one defending Vonage.  And, not to be left out, Ali also reposted Jon Arnold’s original piece

In VoIP is NOT Dead, Jeff Pulver wrote his rebuttal, finishing with the line “VoIP is dead.  Long live VoIP.”  Interestingly enough, in the first draft of yesterday’s piece, I alternated between using that same line as both a subtitle to the original title, and the closing line, before landing on “Ding dong, VoIP is dead”.

Andy Abramson’s one-liner in comments simply said “The real point is VOIP is NOW part of Telecom and it is now Mainstream.” Amen to that sentiment, but it doesn’t go nearly far enough.

Ken Camp declared the whole discussion boring, noting that he had written the same commentary on VoIP as plumbing at several times in the past and finished with the immortal one-liner “2009 – No bullshit. No VoIP. Be real and create real solutions for communications.” Ken then tagged the whole post “beating a dead horse“.  Lee Dryburgh agreed saying “plain VoIP is quite frankly boring. Cheap calls generally with inferior quality. Nothing to stay up on a Saturday night about.”

And we said all of this without one reference to Skype, cloud computing, or the intersection of voice and the web. More on that tomorrow. 

Keep those comments coming, and Happy New Year!

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2008: The Year that VoIP died

by alec on December 30, 2008

It seems highly likely to me that at some point in the future we’ll all look back and say that 2008 was the year that the VoIP industry finally died.  With all due respect to my very good friends Jon Arnold, and Andy Abramson, it’s about time.

Voice over IP is just a transport and signalling technology. It’s plumbing.  It may come as a surprise to some of you to know that in the late 1980’s and early 1990’s there was a TCP/IP industry as well. TCP/IP is inarguably plumbing.  As the IP stack became common on all computing devices, TCP/IP went from being a differentiator to a commodity.  The short lived TCP/IP industry was a footnote in the events that spawned the global web. The fact that a VoIP industry has existed is a similar historical footnote to the transformation of the communications industry as a whole.  The VoIP industry was a necessary phase in that transformation; John in the wilderness announcing that the real action is still to come.

And what is the evidence that the VoIP industry is at that turning point?

Where have all the pure play VoIP companies gone?  The last of any consequence still standing is Vonage.  The S&P is down about 40% for the year, and Vonage a whopping 70% save for a miraculous gasp in November at the point of the announcement of their debt having been refinanced.  The fact of the matter is that Vonage is in an impossible place.  Phone calls are cheap enough, Vonage is undifferentiated from any other phone service, and … the cable guys have television.

Will this be the Vonage’s last year for the zombie shuffle?  Or can they pull it off again, and come back from the dead once more?

VoIP events are suffocating too.  VON was a spectacular flameout, despite the best efforts of Jeff Pulver and his band of merry men to transform it from a voice only show into a voice, video and more show.  At least the Pulverites understood where the future was, even if unable to craft a profitable event around those varied interests.  There’ll be more of the same next year, I fear.  Initial reports from this fall were that VoiceCon was an understated and quiet affair.  Lawn bowling anyone?

Another sure sign of the ill health of the VoIP industry is that the feature companies are heading to the deadpool, as well.  2008 started as a year full of VoIP companies trying to make their mark with free “products” that were features in disguise.  Needing to find a revenue model, many turned to advertising and cheap minutes and ran smack into the same wall that Vonage is heading toward at light speed.  Bye bye TalkPlus, Jangl, and so many more.  And suddenly, late in the year, Jaxtr lurched back from the dead with another free calling service…

The smart vendors have learned that consumers don’t want another telephone company built around a complicated piece of technology in their lives and those vendors have done one of three things – they have transformed themselves into a platform play (think Mobivox), into a wholesale player (think Jajah) or into a full-on competitor in the traditional telecom space (think TruPhone and the build-out of their global network).  Taking their cue from BT’s $105 million buyout of Ribbit, these companies are positioning themselves as players that are part of the communications ecosystem, rather than apart from the ecosystem

Why?  Well, the big VoIP stories this year were that ecosystem of applications, and platforms. 

  • Irv Shapiro’s IfByPhone ingeniously connected IVR and Google Analytics, allowing deep measurement and statistical analysis of call center traffic. 
  • Mashup king Thomas Howe demonstrated over and over that with the right tools, building communications applications can be as simple as building web sites. Tom stood on stages in front of audiences, built applications and won contests and plaudits by concretely showing that voice is now just software.  The subtext?  The magic of software lets you embed voice into any application that you like.
  • Like Tom, we at iotum used modern platforms to release Calliflower in record time. We can turn around code on a two week cycle not because we’re smarter than everyone else, but because of the tools we use to do the job. 

Building communications applications with today’s infrastructure compared to what was available even five years ago is comparable to digging a ditch with a backhoe instead of a pickaxe. 

Most interesting, perhaps, is the fact that the service provider and the equipment manufacturer seem to be blurring at the moment.  As the equipment industry has become mired in the complexities of defining and delivering a common application standard (think IMS), carriers are starting to go their own way – BT’s acquisition of Ribbit is an obvious case, but what of Orange’s developer camps (now in their third year) and the way in which the mobile industry has rushed to imitate Apple’s success with iPhone, both platform and store.  These moves betray an understanding that the future is in software, in applications, and in building products that deliver end user value rather than shaving the corners off pennies.

And what of the companies that are failing to make that transformation?  Pity the Nortel shareholder as Nortel has seen over $250 billion in market cap erased in the last five years. 

Ding dong, VoIP is dead.  Let’s dance on its grave and get on with the business of transforming communications in the twenty-first century.


SquawkBox December 9: InnerPass

December 19, 2008

On December 9 we talked with InnerPass Executives Steve Parsloe and Bill Trail about the launch of their Inner Pass “Share, Collaborate, Communicate” Certified Skype Extra – a web-based persistent document sharing service that supports conversation and collaboration activity by invoking Skype voice services and Instant Messaging (chat) as well as screen sharing.

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Nokia IDEAS a little thin on … ideas

December 9, 2008

Nokia’s latest experiment with social media is online.  Called IDEAS it’s billed as “an interactive conversation about connected commerce and culture.  It’s a new way to interact with thought leaders and their ideas.”  The idea (pardon me) is for visitors to play the short video clips or read the material supplied on topics ranging from […]

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Mobivox’ move in voice CRM

December 8, 2008

Under CEO Peter Diedrich’s guidance, Mobivox has been slowing transforming itself for some months.  Beginning with their announcement of the Mobivox|PL voice services platform in September, the company has revealed an impressive series of customer wins. And now the next phase of their evolution is being revealed.  In Telecom CRM 2.0, Diedrich makes the case […]

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Microsoft’s confusing file synch story

December 7, 2008

Image via Wikipedia Microsoft sent mail to Foldershare users late in November to let them know that an upgrade was finally coming.  Foldershare is the folder synchronization tool acquired from ByteTaxi in 2005, and except for minor updates, it has remained mostly unchanged since then.  In December, however, it will be renamed Windows Live Sync, […]

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Get 20% off on your eComm ticket.

December 7, 2008

Interested in the future of communications? Then you won’t want to miss the annual eComm “Emerging Communications” conference happening March 3 to 5, 2009.  Organizer Lee Dryburgh has put together a really impressive agenda and speakers roster with topics ranging from open spectrum to social communications.  For three days there will be a heady mix […]

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The Shockwave Rider is here today

December 6, 2008

In Thieves Winning Online War, Maybe in Your PC the New York Times’ John Markoff writes of the growing threat of botnets.  Increasingly sophisticated, modern worms conceal themselves in varying ways, mimicking legitimate software on the PC, and then hunt down personal information on your PC — passwords, financial information and so on — or […]

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Email bankruptcy? No sirree!

December 4, 2008

I can’t claim to be the fastest follow-up on email.  There are all kinds of circumstances which prevent me from getting all of the emails in my inbox cleared out, not the least of which is that sorting email tends to take a second priority to just about everything else in business.  Sometimes it can […]

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Nokia unveils their real iPhone killer

December 2, 2008

You may remember that a few months ago Nokia announced the MusicXPress 5800, their first touch screen phone.  Many thought that was their response to the iPhone, but perhaps not.  Nokia announced the N97 this morning at Nokia World.  Thank goodness, as the N96 has been a dud, demolished under the tidal wave created by […]

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