March 2009 Archives

At a time when the world is tightening its belt but still using broadband and wireless services like they are going out of style, you might imagine an increasing portion of companies would be interested in managing telecom expenses. And if you think about it - with companies cutting travel budgets and utilizing technology to substitute for air and other forms of travel, it makes sense that broadband and telecom costs could increase while headcounts shrink.

During the recession of the early nineties telecom costs decreased

more or less in lockstep with business activity and headcount. Nowadays this is far from the case as companies further look to reduce costs with hosted solutions which they used to run locally. In addition, there is an increased focus on accessing information everywhere - via phones, netbooks and smartphones. As more information is accessed in different ways such as mashups and IVR systems, broadband use increases and so can costs.

The increase in telecom use at a time when companies are looking to decrease costs across the board could explain why some companies are looking to rein in their telecom budgets by looking to telecom expense management companies.

This would explain why Veramark Technologies, one of the companies in the TEM space is adding staff. Yes, someone is actually adding people in this environment. And while TMCnet's Michael Dinan was busy writing an article about the happenings at Veramark, I was meeting with Troy McCracken the CEO and Trent McCracken the President of Spectrum Incorporated, a company also providing services in the telecom expense management space. One comment the brothers made in the meeting was that TEM solutions will save 25% of telecom expenses over four years. I have heard similar numbers from others in the industry and from researchers.

One differentiator Spectrum brings to the table is the company's focus on ensuring agents can manage customers easily through an intuitive software program. In addition they have a focus on paper invoices allowing data to be easily extracted and loaded into SQL tables.

The company has a unique way of looking at the field - they blend the help desk with sourcing and procurement, asset management, financial reporting and expense management. An important  theme in our discussion was the fact that TEM is much more than auditing and with increasing complexity of broadband services, they make a great point.

Feel free to visit the company's site for more.

In addition here are some other related and sponsored TMCnet resources for more:

One of the most maddening parts of traveling for me has to be finding hotels which have adequate bandwidth. Generally you have to learn the good properties from bad via trial and error. For those of us used to continuous and fast broadband access, having to wait for a computer to respond due to poor hotel connectivity is frustrating beyond belief. In this economy, many of us need to be more productive than ever and often work efficiency is directly related to speed of information access.

But when you think you have nailed it and found the hotel which offers the absolute best connectivity, you are often disappointed when a technical trade show comes to town and that fat pipe seems to clog pretty quickly. Especially telecom shows where it seems everyone goes to their room and downloads the Library of Congress at night.

Is there anything worse than realizing your connection is so slow, you have time to catch the evening view between email downloads?

I recently came across a post from Andy Abramson which discusses his experiences with hotels and broadband speed. He has some good tips for the road warrior as well. He closes with hotels which have good bandwidth. To his list I would like to add the Palms in Las Vegas and the Dallas and Orlando Gaylord Hotels. I am sure there are more I could add but to date I haven't really kept a good list.

Las Vegas Palms Hotel

Feel free to add your good and bad hotel bandwidth comments at the bottom of this post and maybe together we can prevent that next road warrior from a frustrating night of playing hurry up and wait with their laptops.

A nice surprise but can this be the last snow of the year please?

A shot of the Ottawa River in Canada. Click to enlarge.

It is certainly a tough time for Nortel to be trying to get a court to approve senior level management bonuses as just south of Canada here in the US, the government is focusing on taxing bonuses to employees of TARP recipients to death. The good news here is these bonuses - unlike many on Wall Street seem to be tied to cost-reduction and reducing the company's focus - or selling off parts of the business.

The question worth asking is, anyone can cut expenses at a company, how do you measure the effectiveness of what was cut? In other words, how do you ensure the things which are eliminated are smart for the long-term health of the company? Obviously there is no simple answer but this sort of incentive seems to be something which can have unintended consequences.

You may have heard the House of Representatives recently passed a punitive bonus tax bill for those working in companies which received TARP money. Specifically, The bill defines a new class of income, "TARP Bonus," that consists of any compensation payments in excess of a periodic wage and any income for such employees in excess of $250,000, or $125,000 for married individuals filing separate returns. Under the legislation, any "TARP Bonus" would be taxed at a 90 percent rate.

The bill now needs to be passed by the Senate and President.

I am in pain - two conflicting Rich Tehranis are killing each other in my brain. On the one hand there is the Rich Tehrani who is horrified that anyone who was partially responsible for the current financial mess get any bonus at all. The other Rich Tehrani is horrified that if the companies who received TARP money from the government can't give bonuses which match the industry they will lose the best people.

Then there goes the other Rich Tehrani who wonders exactly who on Wall Street, AIG, etc. had a brain to begin with. Then the other Rich Tehrani comes in and says there must be a few good people in all these companies - we can't paint them all with the same brush - right?

In the end, corporate America pay is out of whack. If your company loses money and you get a bonus more than $250,000 IMHO you are getting too much money. Then again, why would you deserve a bonus at all if you lose people money? I say this as a business person and a fair human being and as a shareholder.

I hope that compensation boards rework pay packages in such a way that CXOs and other executives get paid bonuses only when they make the company money in the short and long-term. I also hope we see more pseudo-clawback provisions using escrow accounts to ensure there is no incentive to use fraud or questionable accounting to get a quick bonus.

Let's take the time to rework executive pay packages across the board so we reward only the people who contribute to making companies successful.

But in the mean time we have to be careful as a country not to make the companies which owe us so much money go bankrupt because they lose all their best people. The trouble is this crisis makes both Rich Tehranis wonder what "best people on Wall Street" means.

I had a chance to speak with David Mandelstam the CEO of Sangoma about his company's new ADSL 2+ networking card the S519 which provides an internal solution for people looking for DSL access sans modems. Asked why the card is needed, Mandelstam explained that one of the primary reasons for this product is its use in inverse multiplexing connections or being able to take disparate DSL lines and combining them together to become a single virtual broadband connection.

This new device compliments the current S518 ADSL card the company supplies but as you can imagine the new card allows greater broadband speeds. As Mandelstam emphasized to me the A in ADSL stands for asymmetrical and subsequently means that the upload and download speed of such service varies. Of course in a situation where you are looking to transmit many VoIP connections at once, you may need more bandwidth than what a single ADSL2+ line can provide.

So if one ADSL2+ line can give you a theoretical 24 megabits per second down and 3 megabits per second up, three combined together give you 72 Mbps download speed and 9 Mbps on the upload side.

David explains the low cost of ADSL let's say $50/month allows you to get a good amount of bandwidth for a combined $150/month. And if you have an aggregate upload speed of 4-5 megabits per second you can transmit about 30 VoIP calls at once.

Need other reasons to purchase an internal ADSL card? Mandelstam explains the limited buffer size of external devices can be improved upon with internal solutions where the internal RAM can act as a virtually limitless buffer. Obviously this functionality is great for VoIP and video applications.

One final reason to look for an internal broadband solution is when you don't want the complexity of an external product and although David didn't mention it, I would think an internal card would save power as well since no separate and wasteful power supplies are needed. And when customers buy and install Sangoma cards 10,000 at a time, a little power and complexity saved per install can add up quickly. Sadly, ADSL2+ is limited in the US but those of my readers in Europe, Canada and other parts of the world will be happy to know there is now a new way to get inexpensive, aggregated bandwidth for whatever applications they need to run.

Please excuse the self-promotional plug but I thought it worth mentioning that on March 31, 2009 there will be a TMCnet webinar focusing on the top 10 BlackBerry troubleshooting tips for enterprise activations. The growth of the RIM platform continues at an incredible pace and as companies look to become more efficient it makes sense to be as educated as possible on the various errors and problems you might encounter.

This particular webinar will focus on a slew of important topics from device issues to the server to integration with Exchange/Outlook and carrier issues. Here are the details and registration information:

Last month I reached out to Greg Gianforte the CEO of RightNow

Technologies regarding how his company is doing. Why? Well the hosted communications/call center/CRM market seems to be doing better than others as a result of reduced CAPEX budgets and I know some others in the space are growing quickly. This was his response:

RightNow had record sales in Q4. For the year, our revenue was up 25% Y/Y and we generated nearly $15M in cash from operations while returning to GAAP profitability. We gave guidance for 2009 to grow recurring revenue an additional 10% - 15% in 2009 while expanding profit margins.

I believe this growth is due to the continued adoption of SaaS and the need of companies to keep the customers they have while reducing costs. One new customer last fall, a multi-billion dollar retailer, was able to eliminate 50% of inbound customer email and 18% of phone call volume in three weeks using our eService capabilities.

I believe we will see a continued increase in the adoption of SaaS and a continued focus on Customer Experience initiatives in the current environment.

This is great news for others who provide SaaS and moreover it is gratifying to see companies taking the time in a slower economy to focus more on customer acquisition and retention. During the last slowdown in 2001 many companies took the opportunity to offshore their sales and customer service which didn't always meet with increased customer satisfaction. This time they are investing in technology to keep current and existing customers happy.

For more from Greg check out our podcast from last winter.

For a good look into what Cisco is trying to do with the new Flip line of video recording devices it announced it will acquire today, check out this great article written by TMC's Michael Dinan who recently interviewed Charles Carmel, Cisco's vice president of corporate business development. The company's Linksys division will be "headquarters" for this product line and there is already talk about how the best of current Linksys products can be combined with the best of Flip. Like I surmised earlier today, adding telephony to these popular devices may give the iPhone and other mobile devices a real run for their money.

Personally I am looking forward to seeing if the integration of this new consumer electronics company changes Cisco's marketing for the better -- meaning more use of celebrities in the company's telepresence and other ads. 

For decades Dell took advantage of the commoditization of the PC market by being the low-cost leader but they need to do more if they want to increase their earnings. The PC and Laptop markets are under pressure from netbooks and PCs in general are getting real competition from Apple. And if you're Michael Dell, you have to kick yourself on a daily basis when you realize Apple, the company you once suggested should be shut down is not only taking marketshare from your company, it is doing it with products which do the same thing as yours but cost twice as much.

You see Dell has done such a great job becoming the low-cost leader that in the mind of many, their brand equates to cheap, cheap, cheap. And in a market growing rapidly this is not a bad reputation to have. The problem of course is if the PC market does not grow in double digits and gets more competitive, it is tough to find more revenue and of course earnings.

So my advice to Dell would of course be to move up market. Go after Apple head-to-head. Give those people who want an ultra-thin Mac laptop a way to get the sleekness of a Mac with the ability to run Vista.

And they have done exactly that with their new sleek and expensive Adamo Laptop introduction. The Texas-based company has done a great job branding the device in a way that exudes fashion, style and sleekness. This is why I read with interest comments from Chris Dawson over at ZDnet which basically made fun of the new Dell branding and emphasized the economy is not ready for a laptop which is so expensive.

While Dawson makes great point after great point, his takeaway is wrong in my opinion because Dell needs to do something, anything to boost margins. This strategy has worked very well for Honda when they launched Acura and Toyota when they launched Lexus and Nissan when they launched Infiniti.

Can the same thing be done in the world of computers? Yes. It already has as a result of Dell purchasing Alienware. It is also working for Sony which has higher margins on its Vaio line than many other PC makers because they have Mac-like designs. Also notice the Sony URL for this brand is "sonystyle." I think Dell did the exact right thing by announcing this computer and yes, Chris, this is a terrible economy for this new product but Dell needs a boost to its margins and history shows us that launching a high-end brand is the way to make this happen.

With all the opportunity to sell more products in the data center and the consumer electronics space, a company like Cisco can afford to simultaneously attack both markets. To that end, Cisco recently announced its entry into the blade server market and today purchased Pure Digital Technologies for $590 million, the company behind the Flip Video brand of pocket-sized video recorders.

Cisco's efforts in the consumer electronics space have not been nearly as successful as its accomplishments in the enterprise but the company seems to believe if it sells enough products in the connected home, sooner or later it will become a preferred provider in the consumer setting. They could be right but the problem for the industry today is the threat from Apple who will continue to own more and more of the home network and consumer electronics market.

Which leads one to wonder, what if Cisco started adding really cutting edge phone and computing technology into a next-gen Flip Video device...? Would it have enough consumer appeal to boost Cisco as a consumer brand? Maybe.

And moreover, can it pull off a strategy which successfully attacks the high-end and low-end of computing simultaneously? If they do it will be a shocker to many as few if any companies have ever done so. But then again, Cisco has shown in many ways - especially when it comes to integrating new companies that it is able to pull off what few other companies can.

After $500,000 in development costs, FreedomVOICE has abandoned the Beta test of Newber, an application which blended the best of VoIP and location awareness to allow users to direct calls to various phones. The app even allows you to swap calls from phone to phone mid-conversation.

Newber was submitted to Apple on October 2, 2008 and after 165 days, Apple has not approved the application and worse it won't tell FreedomVoice anything. Interestingly Apple did approve the company's other application IQ Voicemail in about a month according to the company so there is something about the Newber app that Apple doesn't like.

Eric Thomas the CEO of the company writes about the situation and pins the blame on a middle manager at Apple. While I can't verify who is responsible for putting the approval process in limbo I surmise that there is fear in the company that this application will take revenue away from AT&T and thus reduce the amount of money it can make selling service on the phone which in turn reduces the subsidy Apple might receive on each device.

I feel for FreedomVoice and I think what Apple is doing is terrible to developers who end up in the no man's land between approval and denial. I also think that Apple lock on the App Store stinks for end users. But on balance, the iPhone/iPod Touch platform has tens of thousands of applications and no other device even compares.

So the question worth asking is can Apple please give developers some sort of playbook before they start spending their money to better the iPhone? The fact that Apple doesn't do this makes you wonder if there is something Apple/AT&T are worried about - perhaps their comments on why an app doesn't fly can be used against them in the future by the EU, DOJ or in a class-action suit? One wonders why Apple would want to endure any bad press with such a successful product.

Had an early breakfast meeting in CT and now heading into the city.

SuperComm had been the nation's largest carrier event for decades and over the last seven years or so the show split into two and even three events. Some of the other names the show went by (or partially went by) were TelecomNxt, Globalcomm and NxtComm. Recently the two warring association factions the TIA and USTA made up and the show became SuperComm again which took place last June in Las Vegas.

I have kept these rumors to myself for weeks but as word is slowly leaking out I thought it worth mentioning that I understand the new show dates will be in October (although who knows if this event can even happen with a postponement so close to its original dates).

As companies reduce their travel budgets - they still have the challenge of conducting business without being face-to-face. Of course by now my readers have heard me discuss countless solutions to how you can conference using technology. One of my more recent encounters with companies in this space took place earlier this month in a meeting with Greg Plum of The Conference Group, a conferencing company specializing in audio and video and selling through wholesale and retail channels. Both agents and resellers are targets of the company's wholesale approach and they are currently servicing the US, Canada and have some partners in the UK.

Plum tells me to differentiate themselves, by allowing recordable conferences which are turned into podcasts. These can be subscribed to by RSS readers which means you can keep people informed on happenings in a new way. In addition the company offers toll-free conference call numbers in 60 countries allowing customers to seem as they have an international presence.

I asked about competition from free services and Greg mentioned Skype and DimDim are the biggest competitors - but they differentiate by offering multipoint service and he said with his service you don't get solicited by other callers such as "sexysamantha" referring to the spam you get on services like Skype.

He further explained his company has focused on the quality of their calls which he says are better than that of free services. I haven't had a chance to use the service myself by will certainly cover it when/if I do get an account.

Greg thinks his company is positioned well in this economic downturn as the competition in the business space is the cost of first-class round-trip tickets abroad. Moreover the company seems to have a great strategy on focusing on keeping agents, VARs and customers happy.