I am still in south Florida today the home of ITEXPO next month. I walked by Miami Ink while they were filming their series. I don't have any photos but maybe I'll take one later.
Blogged via wireless handheld
November 2006 Archives
I am on the elliptical machine as you can see. The news from Miami is that an armed gunman stormed the Miami Herald building. It seems he is a former employee and may have hostages.
Blogged via wireless handheld
click Play button above to play video
I had been hearing rumors of the sale of Telx for a while. Many I spoke with feared an incumbent provider would do the purchasing. As you may know Telx provides the physical location for much of the voice peering taking place in the US through their facilities in New York ad Atlanta. They own these facilities and with their association with the VPF, they have made it a no brainer for carriers and enterprises of all sizes to use their facilities as a location to peer with others. The company was just sold to GI Partners, a private equity company. The firm invests in companies with recurring revenue and asset-intensive business models in North America and Western Europe.
I believe this sale signals the beginning of interest levels increasing for similar locations such as Terremark’s NAP of the Americas in Miami and other facilities such as One Wilshire in Los Angeles. As Hunter Newby has said many times, his company has prime real estate and there is only so much of it available. Terremark Worldwide saw its stock appreciate just over 3% today, probably related to this news.
After a delay of just under an hour, we are under way. The plane to Florida has a few empty seats and I am in an exit row and am lucky enough to have no one next to me.
As I sit here, sick of reading and having looked at most of my email at least once, I ponder just how poorly airlines in the US must be doing. After all my seat pictured in blue and to the right is torn and a piece of the seat is just hanging. In addition the handle is ripped off the sun shade.
All this talk of being the richest country in the world is ironic when you fly domestically. Take an international flight and the situation generally improves.
I don't mean to bitch and I am happy to be airborne but I wonder if the day will come when US airlines will be in good enough shape to fix the airplanes. Most of us wouldn't get into taxis as cosmetically challenged as this plane yet once aboard a flight what choice is there?
I heard reports SouthWest would pick up some routes if the US Air/Delta deal goes through. Apparently the larger carrier would be forced to get rid of duplicate routes. While the news could be good for the cost conscious and the planes will likely be newer than average, we still won't get more luxurious international type flights.
Then again, speaking for myself, with a good broadband connection I would be happy to sit on crate.
Blogged via wireless handheld
Although it is delayed already and you may not be able to see it clearly; soon I hope to be leaving on a jet plane.
Blogged via wireless handheld
There is some traffic on the highway as I head to the airport. I have flown 5 times in 5 days on the same airline and am getting sick and tired of seeing the same old airline magazine. Thankfully I brought lots of reading material. BTW I am heading to Florida now.
Surprisingly Florida is cold this week but the forecast for the weekend looks great.
Have a great holiday. Stay safe and healthy.
Blogged via wireless handheld
I had some meetings in the great white north and was greeted with a dusting of snow a few times on the brief trip. Sadly EVDO doesn't work up their but Rogers has 1x technology that didn't work with my phone and was too slow to be useful on my laptop.
It is good to be back home.
Let me also be the first to wish my US readers a Happy Thanksgiving.
Blogged via wireless handheld
I spent some time in Canada away from internet connections and as such I am hundreds of e-mails behind. One of these e-mails came from Tom Keating and it points to an article which explains how spam is skyrocketing due to botnets. I for one did not need this article to learn that we are under attack. I just hope the attack ends soon as I really feel the pain of massive amounts of junk.
It would appear being in the spam filtering business is a great place to be for the foreseeable future. Another problem I have been reading about a great deal lately is spear phishing where spammers target small amounts of people and in many cases these people are located in a single company and the e-mails could appear to come from within the same organization.
One of these attacks actually told employees they were terminated and they needed to click for more information. Between the spammers and scammers, your computer is becoming the scariest place in the house.
The sucker list is a bad place to be. It is a list of gullible people who will fall for scams. Once you get on it your name gets passed around to different organizations who take advantage of you. Here is an article about someone who got on the list and what the FCC is doing to stop it. It makes good reading and shows you how even if you don’t use you e-mail you can get taken by scams.
There is something absolutely serene about clouds. On this particular flight the heating system seems limited and you actually feel like you are outside. Did I mention it is around 40 degrees out? And that's on the ground. As this posts I am on the way home getting ready for another trip to arctic weather next week.
Oh and by the way I snapped a shot of passengers with coats on. The flight attendant has one on as well.
But my frost-induced diversion comes to an end as I reflect on the following. Recently TMC has worked with some IP communications companies on integrated marketing programs and these companies have seen their stock prices double and in one case quadruple. This while the comparable companies in the customer's spaces saw their stocks drop.
When I am not spending time with my family or writing there is nothing like partnering with a company to help them grow their sales rapidly. Today I met with a company who is going to be working very closely with TMC and I can't wait to help them grow as well. It is fun to share in the success of your customers.
This weekend I hope to catch up on article and blog writing. I have 20 items I have been saving up but I just haven't had time to get to them.
Blogged via wireless handheld
Here I am in the Westchester airport in New York waiting for my flight. No coffee yet this morning so I wonder if my grammar will be OK. This airport is the best as parking to check in is about 2 minutes. The downside is a lack of flights if you need to change yours or if there is a cancellation. It is a very small airport and very close to my house which is great.
Blogged via wireless handheld
Although this really isn't a new announcement the addition to Google Maps is pretty exciting as it continues VoIP's growth into new areas and business models. Certainly click to call has been around longer than Google has but the search leader by virtue of its dominance in the search market is able to do click to call on a scale on a larger scale than anyone else.
The way the service works is simple; you type in what you are looking for and the city and state. You could put in Pizza in Fairfield, CT and you could click on Frank Pepe Pizza for example. From there you enter your phone number in a box and you are connected automatically via VoIP. The quality of the call is outstanding if my few tests are any indication. But then again your own bandwidth isn't being used (unless your phone also uses VoIP) as Google uses their network to connect the call and ring your phone.
The power behind this network is VoIP Inc and the company has been working with Google Talk for many months so this new relationship shouldn’t be so surprising.
Now the question worth asking is how this service will be monetized. For now the company seems to be happy to get customers more comfortable using Google services for virtually everything they do. I suppose the next step could be playing a brief ad to callers before the call is connected.
The company seems to be on its way to acting as a middleman between many callers. The question is how to leverage this into a business model. Perhaps the business model in this case will be what it always seems to be at Google -- another way to drive more people to the site to click on ads. In fact with revenue reaching an all time high and the stock price about to break through $500 per share, increasing ad revenue seems like a great strategy.
So we now see VoIP as a tool used by the mighty search engine giant Google to boost search engine revenue. This is truly a great new service Google offers and what's not to like? I've speculated before about all the wonderful things Google could do as your phone provider. So far they have given people a free and easy way to speak with US based businesses. Perhaps these are baby steps but in this case the baby is worth billions and the steps are being monitored closely by everyone who competes with Google in search and those who compete as phone companies.
So I am not breaking this news at all but is important enough for me to cover. I heard about this news at around 7:30 am this morning and have been meaning to write it up all day. Patrick Barnard who is part of TMCnet’s editorial team clued me into what was happening here. Canada is deregulating VoIP and the Canadian federal government has overruled the CRTC which is the Canadian equivalent of the FCC.
According to Minister Bernier, “It will mean lower costs, fewer regulatory proceedings, and more competitive markets. Barriers to entry in this market are very low. There is no reason to regulate it.”
Thanks to Greg Galitzine for covering this news and of course for Russell Shaw who broke the news on TMCnet anyway. For some time I have been meaning to write about Russell’s new blog on TMCnet called RSS - Regulations, Statutes and Standards. The telecom market is rife with regulations that change markets. The FCC mandating 911 for VoIP service providers overnight with an impossible deadline affected VoIP. It certainly made for an unfriendly investment environment. Net neutrality, the old Ma Bell coming back, etc are all things changing the entire telecom sector.
Certainly we see the telecom market is ever-changing and regulations, statutes and standards are something we need to keep an eye on.
So what does Russell write about? I am certainly glad you asked? Here is a list of recent entries:
- Conservative Senator on telecom issues: "playing defense" will be necessary
- European Commission to Microsoft:give us interoperability info by Nov. 23 or else
- Online gambling ring busted: and you won't believe the lucky break
- Specter proposes enhanced Internet eavesdropping bill
- Canada To Lift VoIP Price Controls
- YouTube attorneys send TechCrunch "cease and desist letter" over online tool
- Court absolves craigslist in housing bias controversy
- Tech groups want Congress to re-establish R&D tax credits
- Net neutrality advocate: don't give FCC Chair Martin a second term" href="http://blog.tmcnet.com/regulations/net-neutrality-advocate-dont-give-fcc-chair-martin-a-second-term.asp">Net neutrality advocate: don't give FCC Chair Martin a second term
- At FTC's behest, court shuts down malware operation
- RIAA jackboots on the march
- Study refutes AG: not as much porn on the Internet as you might think
- EU intervention sought for high roaming charges
- Key hearing this Friday on EFF-AT&T "spying" dispute
- Internet content providers to SEC: overturn NYSE fees for real-time stock quotes
- Dingell to FCC: wait on approval of AT&T/BellSouth merger
- So how will the Congressional power shift affect tech?
Here is part of my Internet Telephony Magazine Publisher's Outlook December 2006. It is is in addition to Cisco Systems Rockets Ahead, Beats all Estimates" href="http://blog.tmcnet.com/blog/rich-tehrani/ip-communications/cisco-systems-rockets-ahead-beats-all-estimates.html">Cisco Systems Rockets Ahead, Beats all Estimates which was posted earlier today:
------
A few months back, TMC’s Greg Galitzine broke the story on his blog that Zultys had ceased day-to-day operations. From there I wrote about the company closing down on my blog and later updated the story when Zultys founder Iain Milnes told me the shut down was temporary. A few days later Iain told me and I reported that Zultys was back up and running.
It turns out that if the company was indeed back up and running this was only the case for a short while and a bankruptcy filing took place shortly thereafter with a bankruptcy auction in the works for the future. While this situation took place TMCnet and I reported on the happenings. Out of the blue I received a phone call from a Zultys reseller who told me how big his sales pipeline was and moreover how big the pipeline of other resellers was. He had nothing but amazingly positive comments to share.
I shared the comments of this reseller who requested anonymity under a blog entry titled Zultys Reseller Update. It was at this point the fireworks began. Dozens of commenters were either supportive of Zultys or berated Zultys and even me for having the nerve to write what a reseller told me. Well the reseller was insulted so many times in the blog comments he decided to divulge his identity and from there more people joined in on the dialogue. I received many calls and e-mails about this single entry and it blew me away that a single blog entry became the general source for the Zultys community to get its moment by moment information on the happenings of the bankruptcy proceedings.
The comments on the blog started to wind down once the announcement was made that Pivot a company supported by Telrad Connegy, an Israeli-based PBX manufacturer with a 50-year involvement in the global telecom arena had purchased the Zultys assets and hired many of their engineers.
About a week or so after the auction I received an e-mail from Iain Milnes who told me he wanted to talk about the real facts regarding the ordeal and he went on to say a tremendous amount of misinformation had been spread. He wasn’t able to discuss any of this until we spoke recently.
I had an hour-long conversation with Milnes for over an hour and what emerged is quite interesting. He started off by saying he believes the new management is acting very stupidly as they are closing down sales offices throughout the world. Many Zultys resellers around the world have complained to Zultys that they have not been contacted. Iain went onto explain there are eight times more people in China and India than there is in the US. He spent years building up sales and partnerships in these areas and now the new Zultys/Pivot management has destroyed it all in four days.
Milnes went on to say that 60% of the company’s business was international and there were offices in Bangalore, China and throughout the world. As Iain went onto say at Zultys they were shooting for the stars and the goal was to make the company an international force in a short amount of time. Many Zultys customers were international as well so they required their communications partner to be the same.
Iain mentioned the international customers will not be happy with service and support going forward but they love the product.
Iain and I discussed the fact that an argument can be made the company is where it is because of a failed strategy that needs to be changed. To this he replied the new management seems to think you should grow domestically and then expand overseas. He sees this as a flawed strategy as you aren’t able to sell multinationals in this manner and now the channels are already built. Office in UK and Australia are deserted and China is winding down and relinquishing their lease.
Iain reiterated the point that even if you think international expansion was a flawed investment, Now it has been made. “Homologation in China took 2 years,” he said emphatically. It has been made and done and now the office had big orders from major institutions and was profitable. As he said, “Even if you say Milnes did a bad job with international expansion, not retaining it is a more stupid mistake.” In his opinion the company doesn’t understand why the company has failed. He believes if you are in the PBX space and aren’t in China and other parts of the world today you can never break into these markets.
So why did the company fail? As Iain tells it, Zultys started with a strategy of making the company hundreds of millions of dollars. He says he didn’t think they could put Cisco or Avaya out but they thought they could be in the top 3 or 5. He mentioned Zultys was number 3 this summer in PBX sales.
After investing $67 million dollars of his own money into the company Iain decided to seek a round of funding in the fourth quarter of last year. In the first quarter and second of this year they had more orders than they could deliver. He needed money to put into building product to fulfill expansion. They spoke to 5 investment bankers. Citigroup courted them and got the business as they thought there were good fundamentals, distribution, and the press and analysts were talking highly about the company.
Everyone figured it would take only a few months to get the dollars they needed to keep going and to continue their expansion. Citigroup wanted to be part of the IPO which everyone believed would be a few years away. The investment bank spoke to 97 investors on their behalf and at the end they had one investor. Verbal terms were then agreed upon a few days later when they expected a term sheet they instead received a rejection.
According to Milnes, “There was no plan B and that was the problem.” They never thought they would fail. They seemed to sincerely believe they would get the money and that others would see the value in what they created and did.
In addition the company had spent money manufacturing overseas but the products never ramped up enough to make it an intelligent investment. In other words for the amount of product sold it would have been cheaper to make them in the US. Iain seems to have toyed with the idea of laying off the engineering team to save money in order to get them through the tough times but this didn’t seem like a wise idea while the company was seeking investors.
- Iain went on to recount the reasons for failure. The list reads as follows and seemed more like a confession than an interview.
- They should have been selling more
- They should have worked out why they were having the problems they were
- He understands it now
- He was the head of the company and it was a team effort
- They didn’t market as well as they could have
- They didn’t engineer fast enough
- They made lots of mistakes
- The guy on top – him – did not really how to take this through with a plan b
- They should have planned more carefully
Iain believes if the company had $10 million and working capital Zultys could have been a great company. He will go to his grave wondering why no one wanted to invest in Zultys he says and he thinks perhaps PBXs have been around 100 years and are not sexy.
Milnes went on to talk about all the international success Zultys experienced and how resellers are now sad they have to go to more complicated systems from the competition.
He doesn’t think the software engineers have a clue how to run accompany. He did point out he started out [on his own] 20 years ago and wouldn’t deny the opportunity to anyone. The challenge as he sees it is picking up a living breathing organism. “They are out of their depths,” he said. He went on to say “They Have no clue how to run a company or what is required to sell, service and support a product.” In addition he feels a few of them have stabbed him in the back. He mentioned that some people currently at Zultys feel the same way and many of these people are looking for other jobs while collecting a paycheck at the company.
Iain went on to say he is sorry to the suppliers, resellers, customers and employees. He is very sorry for causing so much havoc. He knows he affected lives of employees. He made a mistake and he thinks he knows what he did wrong and what he would do right in the future
I asked Iain what is next for him and he said he will be forming a new company. He doesn’t know what it is going to do but Milnes said, “I think I know a bit about communications and running accompany.” He said Lots of people have come to him and want to work for him. He is still looking for ideas so if you have any Iain asked you let me know and I will forward them to him.
I have known Iain for about a decade. The last company he worked at was called Zarak and it used to make testing products. One of these product lines was called abacus. The company was purchased a number of years back by Spirent and I mentioned to him that Spirent is still selling the Abacus product. At this point he told me that China sales in mushroomed after Spirent purchased Zarak.
He recently went to dinner with a former salesperson for Spirent who told him in China they love the Abacus product. He was hoping to achieve this with Zultys products. Zultys was into some pretty big accounts. He thinks they could have been very dominant in another 5 years
Iain said, “The loss of international emphasis is the gain of other companies who can capitalize on it.” He went on to say he was working so hard and putting in the money. He said he should have stood back and looked at he market. He believes he should have hired a good CFO one year ago and this wouldn’t have helped. He mentioned he wasn’t looking at the numbers
Iain summed it up by sawing he saw the success but did not see the need for cash until it was too late. They wanted to believe they would be successful in raising it. He did not keep the eye on long term cash flow. That was the fundamental problem in his opinion. Iain went on to say they could have sold more, had better engineers, marketers and sales people. He reiterated it was team effort. He asked, “Why was Zarak so successful?” He said they had excellence in everything they did. He felt they needed more excellence in Zultys. He summarized by saying he blew it and he is terribly sorry – to everyone.
------
Don’t Forget About ITEXPO January in Florida
I love Florida in January and experience has shown the world’s buyers of VoIP and IP communications come to ITEXPO East in Ft. Lauderdale. The brochure is now available for this show and the conferences will be better than ever before. Don’t forget about the collocated IMS and Call Center 2.0 events. Check it out at www.itexpo.com and join us January 23-26 in 2007.
