Communications and Technology Blog - Tehrani.com: March 2007 Archives

Cisco's Real Strengths

March 31, 2007 11:00 AM |

Cisco’s incredible strength comes from being able to leverage its strong brand and enourmous salesforce to sell virtually every sort of product in telecom and datacom. This report makes it seem like the outlook for the competition is bleak.

It is worth pointing out however that if you focus on a niche, you can likely make better products in your specific area than a larger company with broader focus. This is basic business and has been shown time and time again to be true.

However the report should not be taken lightly. Cisco is a fierce competitor and as an acquisition machine – they do it better than any other company I have ever seen.

Having said that, the company is getting bigger and bigger and when that happens, invariably size works to the company’s disadvantage.

In addition I am beginning to hear stories about how the Cisco salesforce is inundated with new products to sell and just can’t do justice to all of them. Of course this isnt surprising and isnt even unique to Cisco. Companies with far fewer products in their portfolios have similar problems.

There was a time between 1998-2000 when Cisco competitors seemed paralyzed by the sheer number of acquisitions they had made. At more than one large telecom company over the past years I remember hearing that people within the organization didn’t know who handled other product lines at the company.

Worse, they didn’t even know how to find out! Whenever I started to hear things like this at a company I noticed the company’s stock plummeted in the following years.

Microsoft is another example of a company full of great people who are slowed down by the enormity of their organization. They didn’t need to acquire to be slowed down by their sheer size.

To date I have seen no sign of any of these problems at Cisco and I am not sure why. The company is huge and should have more problems than it does.

So when I read positive analyst reports about Cisco I agree the company is in a great position but I also wonder of the sheer size of the organization will slow it down like size has done to countless others.

So far this hasn’t happened and one wonders if John Chambers has some sort of magic formula that others have yet to understand. Is John Chambers the Jack Welch of technology?

While it is too soon to tell, I believe at some point the company will be faced with the challenge of making the massive Cisco ocean liner turn as quickly as competitive speedboats.

Intoxicating Tech News

March 30, 2007 4:38 PM |

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I just learned how Grape Networks (news) is using technology to reduce mildew on grapes in vineyards and in the process reducing labor and the need for pesticides. The technology utilizes mesh networks meaning the average vineyard will now have better wireless coverage than the Tehrani household. sad

Currently, Grape Networks' customers include vineyards such as E&J Gallo and Beringer, as well as nurseries in the Napa Valley, Central Valley, and Carmel Valley in California.

Hosted Unified Communications

March 30, 2007 9:31 AM |

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Recently Microsoft and Nortel expanded their efforts to bring unified communications to the world. In this case, they have tackled the tough job of bringing unified communications to service providers who will in turn be able to bring UC to small and medium businesses. This collaboration makes a lot of sense as I am seeing a tremendous amount of growth and interest in the hosted communications space.

Serving up UC backed by Nortel and Microsoft could be a relatively easy sell but there's a chance that service providers will brand the service exclusively as their own. Having these 2 companies working with service providers will be a great benefit to the entire market. The SMB space will likely benefit most.

It should also be pointed out that there are many companies with a number of branch offices and a hosted solution such as this fits in perfectly in such an environment. In fact a Fortune 500 company can mix and match hosted and premise-based solutions as needed to ensure they have the most advantageous solution.

This announcement is a win for the SMB space, service providers, Microsoft and Nortel. Losers here would be some of the PBX vendors. However, it is possible that the amount of money spent on unified communications will be greater then that spent on PBX purchases today, and subsequently, even if Microsoft and Nortel carve out a larger share of the communications market for themselves, the whole pie will be much bigger than it was before.

Of course giving service providers new technology is a fraction of the battle. The rest hinges on the ability of the service provider to actually sell new products and services. It is unknown how successful these companies will be in doing so.

I would imagine based on recent momentum that cable companies will make the most use of hosted UC. We may also see some pure play VoIP providers get in the game.

So as the industry gets revved up for a wave of UC solutions, it looks like they not only have CPE competition but hosted as well. Again, this is a win for the customers.

Latest JibJab

March 29, 2007 8:10 PM |

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This is perhaps the latest JibJab. It was forwarded to me today so I am sticking with this concept. Loyal readers please let me know if I am incorrect. This is media related and average in terms of humor.

Vonage Bankruptcy Discussed

March 29, 2007 7:45 PM |

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Many people have been asking me about the Vonage situation in light of a recent stock downgrade from Citibank analyst Michael Rollins, who said that Vonage probably has a couple of years to go and at that point they will undergo a financial restructuring or bankruptcy. Recently many have been asking me what I believe the future of this company to be.

The recent Verizon lawsuit regarding patents Vonage infringed upon is probably not final if my sources are correct. Many believe the patents Verizon has are not unique and were indeed awarded based on technology which was not invented by Verizon. This of course would have to be proven by someone. I suppose Vonage did their best to do this but was obviously unsuccessful.

Still, Vonage is a young company and apparently patents are not their forte. They were also hit with a slew of patent lawsuits and the odds were stacked against them. In lawsuits it is not uncommon to throw many things against the wall and hope something sticks. In this case Verizon was successful with this shot gun strategy.

So if you take this patent issue away (and I am not suggesting it is over or close to over), Vonage will be dealing with a little less of a problem. As you may recall, damages were determined to be $58 million in damages and 5.5% royalties on any sales going forward.

Now many others have already told me they believe, as I've written in the past that the amount of money that Vonage spends annually on marketing is still toohigh. In fact, it's astronomically high for a company of it's size. They are going to spend upwards of $160 million in 2007. The New Jersey based VoIP leader can comfortably cut back on marketing and still do well.

There's a law of diminishing return in marketing whereby if you spend let's say $25 million; everything over $25 million is not as effective as the first $25 million. So they can cut back marketing comfortably and still have a bunch of money left over, which could go to the bottom line and actually make the company profitable.

In the end the company will probably have to deal with coming up with a triple-play offering of some kind, partnering with some sort of broadband provider, WiMAX or other company. So that's something for later. But for the next three to four years, Vonage is in pretty good shape from the standpoint that they have a critical mass of users – over 2 million in fact. They're a large pure play, the largest domestic pure play VoIP provider. I think their prospects are better than many have realized or give them credit for. That's my feeling about Vonage. Let's see what happens in the upcoming quarters.

Back from CTIA

March 29, 2007 4:56 PM |

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I am headed back from CTIA and am on an airplane heading back to Connecticut. A look at my watch and out the window makes me think we are in Virginia along the coast. Sometimes you luck out and have the seat empty next to you. Today is not that day. Anyway, CTIA was a busy show and it is interesting that the show can encompass so many disparate topics from mobile music to consumer applications to devices to power supplies to base stations to IMS.

In fact it almost seemed like I was looking for needles in haystacks for the areas of interest I cover. For the most part I avoided getting too engulfed in the latest gadgets as you could spend weeks just absorbing them all. Instead, for the most part I focused on companies targeting service providers or enterprise customers.

I think the most impressive technology was shown by a company named Vanu which makes equipment in the software defined radio space. This allows a base station to support multiple standards such as CDMA, GSM, EVDO, etc. The technology is very similar to what you may know as host media processing or HMP. Basically the DSPs are replaced with software running on Intel processors.

This technology allows service providers to save money while reducing time to market. I hope to cover all the companies I met with as soon as I get a moment. I am really looking forward to it actually.

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I am headed back from CTIA and am on an airplane heading back to Connecticut. A look at my watch and out the window makes me think we are in Virginia along the coast. Sometimes you luck out and have the seat empty next to you. Today is not that day. Anyway, CTIA was a busy show and it is interesting that the show can encompass so many disparate topics from mobile music to consumer applications to devices to power supplies to base stations to IMS.

In fact it almost seemed like I was looking for needles in haystacks for the areas of interest I cover. For the most part I avoided getting too engulfed in the latest gadgets as you could spend weeks just absorbing them all. Instead, for the most part I focused on companies targeting service providers or enterprise customers.

I think the most impressive technology was shown by a company named Vanu which makes equipment in the software defined radio space. This allows a base station to support multiple standards such as CDMA, GSM, EVDO, etc. The technology is very similar to what you may know as host media processing or HMP. Basically the DSPs are replaced with software running on Intel processors.

This technology allows service providers to save money while reducing time to market. I hope to cover all the companies I met with as soon as I get a moment. I am really looking forward to it actually.

Yahoo! E-mail

March 29, 2007 12:59 PM |

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One of the most interesting parts of the technology space is actually the hosted e-mail market, where Yahoo!, has recently done something amazing with their e-mail product allowing you to have infinite storage. Now there was a time when Google’s Gmail product was the underdog and they decided to allow 1 gigabyte of storage and was pretty big step above the 4 megabytes Yahoo! provided.

Google immediately upped the ante and now Microsoft and Google are offering somewhere in the neighborhood 2 to 3 gigabytes of free email storage. It is also worth noting that Time Warner’s AOL service has been offering unlimited storage since last summer.

I guess the scale of what Yahoo! is doing is amazing to me just due to the fact that they're giving away unlimited storage for so many of their users. In fact in February Yahoo! email attracted 243 million visitors and Microsoft’s Hotmail had 233 million.

In the same month Google had 62 million visitors to their Gmail offering. It's important to note this number represents a 68% increase from the prior year. There is a great AP story that details what's happening with the various email providers. It also shows what seems to be the future of the internet and more importantly the future of services on the internet. Simply stated, the business model being pursued by many is to give software for free and then find ways to monetize it. This is obviously what Skype has done with their product -- giving away a free voice over IP client and utilizing the reach of the client to generate an enormous amount of revenue from added services.

Google also has done a great job spending a tremendous amount of money to build the best search engine and then monetizing the search engine with advertising. So it remains to be seen what other services will be become freely distributed and ad supported. I think this trend really bodes well for consumers and at the same time makes it a lot more difficult for other providers to compete with the likes of Yahoo!. It seems the only way to join in the e-mail party now is to do something out of the box.

So hats off to Yahoo! for giving away so much. With all this e-mail competition, consumers are going to be the winners.

Packet8 and the Army

March 29, 2007 12:13 PM |

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I recently learned that 8x8's Packet8 service was awarded a US Government contract and, there's going to be an installation of 15 Packet8 Virtual Office unlimited extensions at the US Army's, Yuma Arizona facility. It looks like the voice over IP market has gotten to the point where the government has really caught on to it and is beginning to roll out installations on a pretty widespread basis.

We've been seeing the Army, and other parts of the government coming to our Internet Telephony Conference & Expo shows since about 2001. It looks like now, the various branches of the government and military are taking voice over IP very seriously, and they see that IP communications is a great way to go in terms of communications from the stand point of reliability, redundancy, etc.

It's interesting to note that, the military has been a big user of voice over IP, in installations in remote areas that needed satellites for communications. Subsequently, what they've been able to do is use high powered compression equipment to send multiple conversations, first these conversations are encrypted and then multiple conversations are compressed into packets, and send up to satellites, and then sent back down to the receiving and calling parties.

So, this is not the Army's first foray, or the military’s foray into voice over IP, but it does show that the technology's continuing to grow in our military, and hopefully it will allow our soldiers and officers to be more efficient, and more productive, just like voice over IP has done for consumers and business users.

CTIA Day Two

March 28, 2007 7:04 AM |

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I am here at CTIA Wireless and yesterday the show was quite busy. I saw many different things and I didn’t really spend too much time on gadgety things. What I have found is that mobile carriers are slow to adopt new technology. For example, IP Unity/Glenayre has had an application for over a year allowing mobile operators to send video clips to subscribers via voicemail and when the subscriber views this video they are able to purchase it. The beautiful thing is when they are in voicemail they are authenticated. Every mobile provider and even other service providers should be using such technology to boost revenue.

Perhaps the biggest frustration for me at events is when I see technology that seems to be things service providers need to make money but many times providers just don’t move as fast as I would like. Perhaps WiMAX providers and other wireless carriers based on WiFi will be the competition the wireless industry needs to move faster and experiment with various methods to generate more revenue.

Internet Fax

March 27, 2007 8:19 PM |

2 Comments

I just happened upon the Internet Fax channel sponsored by RingCentral and thought it worth passing on if for no other reason than fax seems to keep on chugging along and has if anything been revitalized by the internet. It seems the market also received a great deal of adrenaline during the housing boom as massive stores of faxes were sent from buyers to sellers to mortgage companies, etc.

As a reminder, a channel on TMCnet is a microcommunity of interest designed to educate on a certain topic. We have built over 100 of these and I continue to be amazed at the traffic levels they generate.

If you have an interest in IP fax, be sure to check the site out when you get a chance.

CTIA

March 27, 2007 11:25 AM |

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I am at CTIA this year and have my usual set of meetings followed by meetings. Thankfully I have some space on my schedule today as I am not booked as solid as usual. I have some time to see some exhibits and get an idea of what is really exciting. The event seems pretty big – perhaps as big as Vegas and the attendance is unknown so far. Our booth is in the back right at number 4782. Come by and visit if you have time.

PS: The Internet access is very slow for me so you may not hear from me for a while.

Trolltech

March 27, 2007 7:28 AM |

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I spent a few minutes on Wikipedia today searching for information on Norway. I wanted to learn more about this country I had never been to and while searching I discovered the country is a Kingdom in fact and was settled about 12,000 years ago. I really got into learning about Norway until a coworker told me that Wikipedia is about as accurate as the water cooler gossip you might hear at work.

Ever curious I asked for details and was told about a recent fiasco regarding comedian Sinbad who was inaccurately portrayed as dead on the site. If you don’t remember, Sinbad appeared in – well I can’t recall either. Perhaps he had a TV show or something. I may have even laughed at his jokes back in the day.

But wait a minute – how did I get on the topic of Sinbad? Wasn’t I focusing on Norway? That in fact is much more germane to technology, right? Well not really but I started my Wikipedia adventure after a conversation I had with a Norway-based company called Trolltech who was founded in the 90s to focus on cross-platform support for applications using C++. So basically an object-oriented approach to write once, run everywhere sort of coding.

Companies like Adobe and Google use Trolltech platforms to reduce development time across computer platforms such as Linux, Mac and PC and more recently the company has become a major player in the mobile space taking their write once, run anywhere philosophy to devices on the go

As these devices on the go learn to communicate with WiFi access points and begin to think about using Skype, the company saw an opportunity to get involved in the Skype ecosystem to allow ODMs to develop devices which will run Skype on a variety of mobile platforms.

The 250 person company has recently been chosen by Skype to connect the Skype interface to the operating system of Skype Certified WiFi handsets. This is a pretty big deal for Trolltech and in talks with the company I learned there are a slew of interesting device possibilities in the works.

We can expect to see interesting concepts in Skype and mobility like location-based services, multiplayer games, devices devoted to allowing the elderly to easily videoconference, etc. Moreover we can hope to see implementations of advanced IM applications, music servers and more.

In short when you work with Trolltech you have to worry less about cross-platform development and can spend more time on product development. This seems like the ultimate win/win and technology like Trolltech’s will keep the Skype ecosystem alive for years to come. Let’s hope Sinbad lasts just as long as I just can’t wait for him to star in the various sequels to his original hit movies. wink

Octware

March 27, 2007 6:23 AM |

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Sounds Great, Less Filling

Octasic is well known in the world of echo canceling – a market which is not discussed too often but is important for enabling crystal clear, echo-free conversations. The company is known for providing echo cancellation for devices, IP PBXs as well as high-end echo cancellation boards with fixed function DSP-based hardware.

Recently the company realized there is a whole world out there of smaller companies who enjoy the benefits of echo-free conversations (sounds great) but who aren’t fans of paying for hardware which is basically overkill for their small company (less filling).

In fact hardware-based echo cancellers are typically 16 channels at a minimum and if you need less then you have basically wasted money. So a software solution makes a great deal of sense and this software-based solution will come from a new Octasic subsidiary known as Octware.

Software-based echo canceling is an economical $10/port and works with Asterisk-based systems. The only negative to this approach is for systems that are underpowered. Asterisk is CPU intensive and echo canceling is as well. Still, if your hardware can handle it, a software-based solution may save you some money without sacrificing quality. And in this case, less filling really does sound great.

TrixBox Appliance

March 26, 2007 10:08 AM |

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The rage these days seems to be that of communications appliances as installing software seems to be so last year and plug-and-play seems just so 2007. To that end Trixbox has a new – you guessed it – appliance for the masses. Formerly Asterisk@Home the Trixbox appliance is based on Asterisk open-source PBX software and as I just discussed, Trixbox marketing tells us this device makes installing an open-source PBX both fast and simple.

Now you may be confused about all these different open-source PBX companies – many of whom are based on Asterisk and at least one is indeed Asterisk. Chris Lyman the CEO of Trixbox likes to explain his products versus the competition as follows:

Asterisk is the raw materials – the hammers, nails and wood if you will. If you are a construction company this is how you go about building your dream house.

Trixbox is for those non-construction companies out there. Chris likens Trixbox to Home Depot. The way to build a house for the rest of us if you will. To continue the analogy – this is great for the handyman allowing you to build a house quickly.

PBXtra is Fonality’s commercial product and Chris likens it to a prefabricated house.

Chris continues by saying all three products are critical to the construction and open-source telephony markets. He went on to say Fonality has 2,000 Asterisk deployments to date with over 50,000 phones sold.

To continue with analogy-palooza, Chris says he wants his company to be the Red Hat of the Asterisk space. To that end he backs up his ambitions comments with numbers like the million downloads Trixbox has had. In addition he claims 65,000 downloads last month and 80,000 from the month before.

Moreover Chris went on to say that based on an article in Forbes where Mark Spencer the CEO of Digium was interviewed -- Trixbox has double the downloads of Asterisk.

As appliances seem to be all the rage these days, it is worth noting Trixbox has thrown its open-source hat into the ring and has introduced a 3U Trixbox appliance which is strikingly green in color. The system includes the Asterisk GUI from Asterisk Now.

They differentiate their appliance from the likes of Digium and Linksys by saying they believe their device can scale to 500 users. Chris says that since Asterisk is CPU intensive and 1 GB is not enough voicemail storage for more than 25 users, Trixbox has dual redundant hard disks as their voice mail store and a Pentium-based architecture.

You can opt for 2 power supplies of you so choose and there are no power switches to accidentally hit. Continuing with this batter safe than sorry design methodology, there are no buttons on the front to accidentally hit and change the configuration of the device.

The appliance consists of cards from Sangoma which the company says are an excellent choice due the echo-cancellation afforded by this solution.

The open-source PBX space is generating more and more interest among resellers and corporations alike. It seems the move from software to appliances is a good one and I expect the uptake of open-source communications products to be greater than ever.

Also see Asterisk Appliance.

Asterisk Appliance

March 26, 2007 9:58 AM |

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Once of the more interesting areas of growth in the VoIP market has been that of open-source appliances. I had a chance to see the Asterisk Appliance from Digium which they deem is a full-featured and cost-effective way to provide the under 50 user SMB with VoIP – or as their press release espouses, Internet Telephony. The appliance is about the size of a typical home router.

Some of the functions included in the $995 device include:

Complete Asterisk server
Support for VoIP and analog phones to allow customers to use the legacy equipment they already own
Full-featured PBX, interactive voice response (IVR), voicemail, conferencing and automatic call distribution (ACD) software
Administrative features such as a setup wizard and autoprovisioning of Polycom IP phones
Call queuing functionality
Hardware-based echo cancellation
Compact flash card or MMC to support voicemail and wireless applications with no major parts
Craft port for debug for field technicians
Five Ethernet ports (1 WAN, 4 LAN)
Built-in router ideal for small offices
Eight analog ports supporting a mix of foreign exchange station (FXS) and foreign exchange office (FXO) interfaces to standard telephones

My take? This is a great idea. One of the hot button areas of the communications space in the last few months seems to be appliances. Apparently people are not thrilled with having to deal with pesky hardware configuration.

These devices will likely make business owners feel secure as they look like routers and hubs and any other sort of networking equipment you may find in a small office.

In addition, from a marketing standpoint, these appliances look great. Asterisk, Applianx and other communications appliance makers seem to have learned from Apple that the look of a product can have a dramatic impact on its uptake.

In case you are interested in a bit of history, the first few companies in the communications space with designs worthy of Apple were TouchWave’s WebSwitch IP PBX which was purchased by Ericsson and the ORCA from Nuera – now part of AudioCodes.

Back to Digium – Mark Spencer and Co. tell me we can expect a range of Asterisk Appliances in the near future. Stay tuned.

March 2007 Archives

Cisco's Real Strengths

Intoxicating Tech News

Hosted Unified Communications

Latest JibJab

Vonage Bankruptcy Discussed

Back from CTIA

Yahoo! E-mail

Packet8 and the Army

CTIA Day Two

Internet Fax

CTIA

Trolltech

Octware

TrixBox Appliance

Asterisk Appliance

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