December 2004 Archives

In 1999, years before Vonage was a company, Net2phone had an agreement with Komodo Technology to use their Komodo Fone as a broadband telephony/VoIP access device. You could make outbound calls but not receive inbound calls with this combination of hardware and service.

Agreement may be a strong word as TMC Labs had one of these Net2phone enabled Komodophones and I am not aware of anyone else having access to it. Here is the TMC Labs review of the Komodo Fone 300. We were sent a few devices and as I recall the one I received was a prototype.

This package did everything Vonage does except for the ability to have a local phone number. Somehow Net2phone didnt capitalize on what was a half-decade head start. In fact a few years ago my Komodophone which became the Cisco ATA-186 through an acquisition broke and there was no replacement technology available. The Cisco device no longer worked with Net2phone service. This is why I tried Vonage out.

I was just reading Net2Phone Expands Network Reach on TMCnet and it seems that Net2phone is positioned to be a strong Vonage competitor as they have a slew of worldwide telephone numbers now available to them. Net2phone was the first company to market Internet telephony to the masses and had a product called Yap Phone in CompUSA meaning they were one of the first companies with a VoIP product in the retail space. They stopped marketing heavily a few years back. They are now in a position to be a player once again. It will be tough to keep up with the AT&T and Vonage marketing machines and winning a features war will be difficult since AT&T is on fire launching new features like crazy.

The market however is huge if you consider every person in the world could potentially have a VoIP phone so there is plenty of opportunity for everyone. Good luck Net2phone, if you want me to give your service a try, please drop me a line or just set up an appointment at our Internet Telephony show in Miami.

Here is some very big news from the FCC about additional 3G spectrum now available. Washington, D.C. Today, the Federal Communications Commission (Commission) formally notified the National Telecommunications and Information Administration (NTIA) of the U.S. Department of Commerce that the Commission intends to auction licenses for certain Advanced Wireless Services also called 3G as early as June 2006. In a letter to Assistant Secretary for Communications and Information Michael D. Gallagher, FCC Chairman Michael K. Powell stated that the Commission intends to commence an auction for Advanced Wireless Services licenses in the 1710-1755 MHz and 2110-2155 MHz bands as early as June 2006. The 1710-1755 MHz band is currently occupied by federal government users that would be relocated pursuant to the recently enacted Commercial Spectrum Enhancement Act. That Act requires the Commission to notify NTIA at least 18 months in advance of beginning an auction of spectrum transferred from federal government to commercial use. It also requires NTIA to provide the Commission the estimated costs and timelines for the relocation of Federal entities from the bands at least 6 months prior to the auction. Chairman Powell stated, I am very pleased that the President has signed this important legislation. The spectrum relocation fund mechanism that Congress has established will result in successful auctions, smooth relocation of important government operations and, most important, competitive high quality communications services being provided to American consumers. For all of us who believe in the future of wireless broadband, it is truly a banner day. My congratulations go out to Michael Gallagher who spearheaded the Administrations successful effort to win passage. We look forward to working closely with NTIA to ensure the swift implementation of this legislation. Chairman Powells letter also stated the Commissions intention to auction spectrum at 1432-1435 MHz in July or August 2006. NTIA previously notified the Commission that there are no relocation costs associated with this band.

Yesterday in one of my blog entries, I opined about Cablevisions decision to provide some data services. The entry was titled Triple Play Becomes Quadruple and Quintuple Play. I mentioned that wireless was the missing piece of the puzzle and also that Sprint would be the likely network they should approach to resell the service.

 

Little did I know that TMCnets Johanne Torres was writing about a similar topic in an article titled Time Warner Cable to Resell Sprint Cellular Service. Sprint seems uniquely positioned in the wireless resale market as other carriers dont resell service at the moment.

 

It will be interesting to see how WiMAX service providers will change the face of competition in the wireless voice resale business. No single WiMAX provider will have the coverage area (at least at first) that Sprint has so they will have to resort to reselling their service at a substantially discounted price to compete with Sprint.

 

WiMAX phone service would be based on VoIP however so consumers using this service may or may not have to pay the myriad fees and taxes that go along with todays wireless service. If WiMAX telephony providers dont need have the same restrictions as traditional cellular providers they will be at a competitive advantage in some ways.

 

This issue once again boils down to what the government is going to do about taxing and regulating VoIP. Please see VoIP, Vonage, The FCC and Regulation The Voice over IP market is booming today, I wonder how much more growth the market could support if we didnt have to worry about the regulatory landscape changing on a regular basis.

Vonage Holdings is really paving the way for a slew of VoIP service providers as they fight regulatory battle after battle. In a lost appeal to a recent Vonage win, the Minnesota Public Utilities Commission argues that VoIP phone service should be regulated as phone companies are. There is still the chance that states will be allowed to tax VoIP. We will have to wait and see how this plays out but in the mean time there can be no more damaging problem for a new industry than having court cases and FCC commissioners making new rules as we go along. We need to put the matter to bed once and for all. VoIP is one of the few technologies driving the worlds economy and it has the potential to save billions of dollars for consumers around the world. The fact that we need to really play the industrys future by ear is ridiculous. I call out to our regulators and politicians to figure out how you are going to deal with VoIP once and for all and put an end to legal wrangling that in no way benefits the industry or serves the common good. Here is more news on the topic if you are interested.

I love the Internet because it is so democratic. What I love even more is that it is a self-documenting mechanism and nothing gets thrown away. I was researching for a blog entry that mentioned Y2K and came across the following site and post where I am personally trashed. I am not only trashed but an entire community of scholars chimed in.

They were all wrong of course. Please enjoy the following correspondence.

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000cCY

One of the recurring themes in mainstream press reporting of Y2K seems to be a sort of blinders approach. Writers or speakers tend to view and expound on the subject from the selfish perspective; how it affects them and never mind anything else. The banker is concerned about the bank and not the grid; the power company spokesman speaks of the grid but knows nothing about water treatment; the insurance person understands the possible effects on that industry but is oblivious to possible problems with chemical plants. My opinion was buttressed this morning after reading an article in CTI magazine by publisher Rich Tehrani. The magazine reports on the computer telephony and call center industries. His column this month is entitled "Why Everyone (but him) IS Wrong." While his writing is pretty good, his approach is that we will spend our way out of the problem, and while he addresses his industry, he completely ignores possible problems and disruptions elsewhere. Link
-- Vic (Roadrunner@compliant.com), March 16, 1999

 

Hi All,

Rich Tehrani here. Sorry I started all this controversy. I went out on a limb, made a prediction and was 100% right. Not to brag but it takes guts to against the grain on such a potentially catastrophic issue.

Here is the article for your review.

http://www.tmcnet.com/articles/ctimag/0399/0399pubout.htm

What I see as most interesting about my writing is that I predicted what most every financial analyst said would not happen, a financial boom. While analysts (I am not sure what logic they used) argued that spending would slow and there would be an impending economic doomsday, I again predicted the opposite would happen. I walked the reader through the logic and was correct.

I am not always correct btw but when I go against virtually every expert on the planet and am right, I feel like I should take some credit.

I already blogged today about my optimism for some of the future technologies worth watching. What I didnt mention is that I havent seen activity like I have this week ever before. What I am referring to is the week between Christmas and New Years which is the deadest time in our business.

It you look at the last few years in reverse order, 2003 was terrible as we were about to go to war. 2002 was terrible because of the bubble bursting and lasting effects of 911. 2001 was obviously terrible due to 911. 2000 was slow because of Y2K fears.

So getting back to this week, the orders are pouring in and it is unprecedented. This is important because TMC is an optimism barometer for the contact center/CRM and VoIP markets. When business is good for us it is a sign that the industry as a whole thinks the future will be bright.

We are gearing up for an amazing Q1. Internet Telephony Magazine is by far the fattest magazine in its market because we not only attract lots of new customers but we are keeping more of or past advertisers than ever before. We just increased our circulation by over 30% to 40,000! The magazine is now available internationally and we have a larger international circulation than any competitive magazine.

The upcoming Internet Telephony Show in Miami is going to sell out and the show hotel will sell out very soon as well. This will be the third exhibit hall and show hotel we have sold out in a row.

Customer Interaction Solutions Magazine is doing well and has the highest marketshare in the category and we anticipate healthy growth based on the past quarter as well as the orders coming in this week alone.

So when you toast your change glass on Friday, please make a second virtual toast with me and the communications market. Here is to a healthy, happy and financially prosperous new year for all.

Are we back? Is it true? I have seen the stocks of eBay and Google rocket ever higher and now this, Amazon logged orders at a rate of 32 items per second over the holiday season! This was their busiest Christmas in history. I read about this amazing achievement in the BBC article titled Amazon Trumpets record Christmas.

Yesterday, TMCs newest blogger Al Bredenberg also blogged this story titled Amazon's 10 Years: E-Commerce Revolution Continues. In the entry Al talks about how many people thought Bezos was crazy when the Internet first started out. Now these people are all jumping on the Internet bandwagon.

From an investment standpoint it seems that the Internet stocks that made it to this point for the most part are going to grow and grow. There is obviously more investment coming back into this space as well.

I just wonder when we will know if we reach irrational exuberance again. A glance at the stock prices and valuations of Sirius and XM will tell you that the market seems to have an appetite for high flying tech stocks that dont make profit.

Will it be different this time? I think it may as there is talk about profitability whenever analysts talk of these companies. We now hear about P/E ratios and the other metrics that we didnt mention during the dotcom buildup.

Still one needs to be careful as some bad habits seem to be repeating themselves. For example the whole celebrity endorsement game. Whoopie Goldberg and Donald Trump were just two company pitchmen I remember from the dotcom days (besides of course William Shatner). Last night I saw Dennis Miller pitching NetZero. Are we back to the glory days of celebrity endorsement overkill?

When will we see Britney hawking Lingerie.com or her husband for Walmart.com or Kirsty Allie doing an ediets.com commercial? How about Winona Ryder for Overstock.com? Jaylo could promote Froogle, PeeWee Herman for Netflix, Imelda Marcos for Zappos.com, Michael Jackson for Disney.com, and Jay Leno for Cars.com.

I digress. The point is that there is amazing potential on the Net and it feels like we are back in 1999 but this time the companies are making money in staggering numbers. Are we overvalued now? The answer is probably yes but it seems that high-flying tech stocks demand super-high valuations. This is especially true when you realize that many dotcoms have much lower costs than their brick and mortar counterparts and as such can charge less and dont have to reinvest in new locations to expand market share.

In the VoIP space the future is also bright but there are threats that need to be taken into account such as Skype and Microsoft. These two companies alone can change the face of VoIP. It is too early to tell what impact these companies will have on the market but if you are looking for investment ideas, I point you to my VoIP 2.0 article (PDF). If peering really does take off the way I believe it should, session border controllers focusing on this market will do very well. Vonage and AT&T have tremendous VoIP mindshare at the moment and it will be tough to dislodge them without massive marketing expenditures.

Companies in the SIP and WiFi telephony markets are poised to do exceedingly well and WiMAX service providers will take the world by storm unless they cant get spectrum. This is an issue you dont hear much about but spectrum needs to be allocated in such a way that there is healthy competition. Aside from Skype, Nimcat Networks and Popular Telephony seem to have the p2p VoIP client market sewn up. I expect healthy growth in this space.

There are many more technologies worth discussing so keep reading my blog for future updates and feel free to add your comments.

Cablevisions Optimum Online recently announced they will add in antivirus, firewall and parental control features. If the triple play is voice, video and data and wireless turns this into the quadruple play then we are surely at the quintuple play mark when service providers continue to give more and more services in a single bundle.

A company like Cablevision needs to now resell wireless service as well to stay competitive. Eventually this may be done via WiFi telephony or WiMAX telephony but for the time being the most frequent network that gets tapped for such jobs is Sprint PCS. AT&T Wireless and Virgin Mobile both resell and rely on this network.

Well AT&T Wireless is a GSM network you say and has nothing to do with Sprint PCS. Yes that is true but AT&T Wireless is now part of Cingular and AT&T is by contract allowed to relaunch a wireless service if the name AT&T Wireless is not in use. Lots of confused customers are just waiting to be created when they dont understand why their GSM phones wont work on the AT&T network. Maybe it wont be so bad as we seem to be throwing away cell phones more frequently than even spouses as a country.

But I digress. Sprint PCS is in a great position to help service providers become quadruple players. I wonder when we will be able to use push to talk VoIP to communicate with Sprint PCS Nextel customers. I am sure it is just a matter of time.

I am not a fan of push to talk but many others are. Some of the really interesting features that can be provided over an IP network are the ability to monitor push to talk conversations or to log them and keep them as translated files for archival and later search.

SER has some great technology that checks for profanity in a call center. It is called SERTAINTY. I wrote about the SERTAINTY Quality Assurance Platform recently. What a great tool to add to push to talk in an enterprise. Imagine if you knew every time someone on your team swore or used language that was potentially discriminatory or harassing or mentioned your competitor.

Sure this is all big brotherish but in a litigious society such as ours corporations will need services like these to protect themselves from lawsuits.

So as the triple-play expands, there seems to be no limit to how many services tomorrows service providers can provide and charge for.

A few service providers have already asked me about triple play coverage at Internet Telephony Conference and Expo this February in Miami and yes, the triple, quadruple and quintuple play will be huge part of this event as it is an integral part of VoIP 2.0.

I received a call from an old friend in the contact center business. As you know these are the types of companies that are deploying VoIP like crazy as they are able to save a tremendous amount of money and at the same time change their entire business model.

A company like West for example launched an entire Home Agent strategic differentiating division that runs over a managed VoIP network provided by Level 3.

Getting back to events, my friend wanted to know how the different events stack up against one another. These days, every show on the planet seems to want to be a VoIP show. Knowing we launched the first event in this space focusing bringing in buyers, not industry insiders he asked my how I would explain our conference was the best one for his dollars. This is what I wrote him.

This is now our 11^th Internet Telephony Conference and we consistently hear from past conferees that we have the best conference program out there. We dont recycle the same self-promotional speakers that are friends or business partners of the conference chairman who subsequently give you a perspective read (sales-pitch). We have great speakers that are there to educate you and we dont invite the sales people back. This is why our VoIP show has a satisfaction guarantee. You dont have to come to our conference, but if you go to a competing one, please ask for a guarantee in writing before you spend a dime.

Another exciting development is that this event is the only one in the world focuses on VoIP 2.0. Here are the topics that encompass VoIP 2.0. From VoIP peering to p2p VoIP clients to enterprise VoIP to developer and reseller opportunities, this show has it all.

So cutting edge and unbiased content as well as the best and only conference guarantee in the industry.

The case is closed.

My friend signed up for a Diamond plan and is sending 5 people from his company. He would have signed up anyway but sometimes your best friends are the ones that make you think.

The best reseller opportunity in the world is still VoIP. Resellers are making a killing. In fact a recent article in CRN quotes Doug Bowlds a Cisco reseller in Vienna Va, tripling his sales!

Here is an excerpt:"We're looking at a three-fold increase in growth just on our VoIP business next year," said Doug Bowlds, vice president at AAC Associates, a Cisco Systems partner in Vienna, Va., whose IP communications division represents about one-quarter of its $15 million in revenue. AAC Associates has seen widespread acceptance of VoIP among its education, local and federal government customers, Bowlds said. "We have a whole lot more success stories to point to." Growing interest in applications that add video to converged networks is also driving sales of IP telephony to customers that previously wouldn't consider moving to VoIP, Bowlds said. "Video is helping us extend it to other areas. For example, police [departments] typically have stayed away from VoIP, but once we start showing what they can do [when we add] IP video surveillance, they start getting really interested," he said. Bowlds said his biggest challenge for 2005 will be finding enough VoIP engineers to fill the open spots on his growing staff. He currently has 15 VoIP-specialized engineers and is looking to add 10 more during the next 12 months. "You can't put an ad in the paper to hire a VoIP engineer. We'll be doing a lot of in-house training," he said. While some solution providers see 2005 as a year to bulk up their IP telephony practices, others plan to jump into the market for the first time. "We probably will be investing this year to get involved [in VoIP], adding people, getting people cross-trained," said Steve Thorpe, president of Adaptive Communications, a solution provider in Portsmouth, N.H. Thorpe estimates Adaptive Communications will have to spend $250,000 to ramp up an IP telephony practice for sales opportunities he expects to see in the next two to three years. "There has been a lot of industry buzz over VoIP in the last couple of years, but now we see our customer base getting ready to take advantage of the technology," Thorpe said, adding that VoIP would complement his current security focus. Adaptive Communications has been talking with vendor partner Nortel Networks for 18 months about jumping into IP communications and will move ahead with Nortel when the time is right, he said. In addition to security, another technology that complements IP telephony sales is wireless, said John Freres, president of Meridian IT Solutions, a Cisco partner in Schaumburg, Ill., that expects the volume of its VoIP sales opportunities to double in 2005. "The whole concept of mobility is absolutely becoming pervasive in accounts," Freres said. "Customers are starting to leverage their networks to get greater productivity," he said. VoWLAN remains a niche technology today, but more customers will adopt it in 2005, Freres said. Research shows that VoWLAN deployments are on the rise. The VoWLAN phone market for the first three quarters of 2004 climbed to $37.9 million, up from $19.9 million in the first three quarters of 2003, according to Synergy Research Group. "It's going to be as mainstream in our accounts as wireless has been," Freres said. "Once you get a few people using it, it becomes a huge productivity tool," he said, noting that his own company uses VoWLAN technology internally to showcase its possibilities for customers. While many customers are keen on VoIP's promised productivity gains, for others the most compelling argument for the technology still is old-fashioned cost-savings, said Scott Klemm, vice president of operations at Distributed Computing Inc. (DCI), an Avaya partner in Baltimore. One DCI education client in Pennsylvania, for example, shaved $12,000 per month off its telecommunications bill by moving over its 30 office employees and 100 field employees to a VoIP system, Klemm said. "It was costing them $150 to $300 per month per employee in the field," he said. Even customers that aren't candidates to deploy IP telephony now are buying VoIP-capable phone systems for the future, Klemm said. "Only about 20 percent of customers say they don't need it at all. It probably was the exact opposite a year ago," he said.

These a great article from a site called rednova. I never heard of this site but this article gives great insight into Verizon and their VoIP plans. The article consists of an interview with Stuart Elby, Verizon Network Services vice president for Network Architecture.

One of the more interesting quotes attributed to Elby is:

"We're throwing as much out there as we can to see what's going to take,"he says.

It is great to see an entrenched player experimenting. In some ways VoIP makes it easier to play around with new services such as IP Centrex. The article also gives a unique view into the problems that todays VoIP service providers face when rolling out service.

Many people have predicted AT&Ts demise. Industry insiders told me that the stock is a definite short since VoIP became popular in 1999. You figure with all this new IP telephony competition around, how could they survive? Well the truth is that now in 2005, AT&T is doing an amazing job fighting off VoIP competition with their CallVantage service. They are very late to the game and Vonage has amazing mindshare for a start-up but AT&T is a strong number 2 player. The company has so much more potential however and that is why they are partnering with Intel in a technology alliance that taps into a virtually unlimited number of products and services. First up is a WiMAX chip named Roseville and soon we will see chips for other technologies such as HDTV, VoIP and even e-mail. One of the key visionaries of AT&Ts strategy is Hossein Eslambolchi, AT&Ts Chief Technology Officer. He has a clear vision for the future of AT&T and is a figurehead that is emerging in more of the popular press. He has become a cultlike figure within the business tabloids. It is soon to see how this relationship will turn into sustainable sales and profits for AT&T but from a buzz perspective. AT&T is on the right track and is gaining more and more mindshare as a serious communications player across a broad range of technologies.

I received this e-mail today and thought it worth responding to.

Interesting read for biology/technology buffs.

Tom Keatings blog entry today titled Cablevision Optimum Voice could have just as easily been titled Cablevisions Optimum Profit as he details how the company claims they have established themselves as value priced leaders but at the same time they are perhaps the highest priced VoIP provider around.

 

So should they listen to Tom and lower their price? No, in my opinion. I say this because the company has access to a virtually unlimited supply of remnant advertising. They have likely spent the equivalent of 100 million dollars this year alone based on my TV watching research. (I think I finally found a way to expense my cable bill :-)

 

In addition, customers want one bill and this is a way to provide that. They also want minimal support issues and dealing with a single company is easier than dealing with more than one.

 

Finally, a price war is good for consumers and bad for an industry. You want to ensure VCs will run away from VoIP screaming then mention a price war. You want to make sure that top talent doesnt decide to develop products in VoIP, then mention a price war. Prices will decline over time as new entrants are pouring into the space.

 

In my opinion Vonage and CallVantage are crazy to engage in any cut-rate pricing because they have established themselves as premium brands. BMW and Mercedes dont get into price wars. Market share is great but profit is what separates the adults from the kids in this game.