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HD-Voice, Unified Communications, and Service Provider Panel Discussions Top the Agenda for Next Week's ITEXPO Conference in Miami

Norwalk, CT - January 28, 2009 - Technology Marketing Corporation (TMC®) today announced details - including the complete lists of panelists - for three General Sessions that are attracting significant interest at Next Week's INTERNET TELEPHONY Conference & EXPO (ITEXPO) in Miami.

Each session is free for all attendees. Registration is now open.

On Monday, February 2^nd at 4:45 PM, representatives from Nortel, CommuniGate, Interactive Intelligence, Aspect Communications and Objectworld will present their Unified Communications solutions - and position their products against one another.

Each panelist will make the case for choosing their offerings by laying out the business case; explaining their differentiators; and providing a quick demonstration of their systems. The "shootout" format provides just seven (7) minutes for each to make their case, and the session provides a detailed Q&A for attendees to dig deeper into each vendors' claims. INTERNET TELEPHONY magazine Editorial Director Greg Galitzine will moderate.

On Tuesday,February 3^rd at 9:15 AM, executives from 8x8, Inc., Broadvox, MagicJack, Telefonica, TW Telecom, and Verizon will share their thoughts on the state of the market; today's economic climate; and they will discuss how anticipated changes in Washington will impact the telecom industry.

The session, moderated by respected communications industry blogger Andy Abramson, will also provide attendees with a glimpse into the future of mobility and next-generation wireless technologies. Attendees are encouraged to bring their questions for these industry leaders who are best suited to provide the answers.

On Tuesday, February 3^rd at 12:15 PM, TMC president Rich Tehrani leads a panel of experts discussing howIP Communications solutions have exceeded the fidelity and clarity of the PSTN - and they will discuss upcoming HD-Voice solutions that will take advantage of this new fidelity.  Participants in this session include: Alan Percy (AudioCodes), Tim Yankey (Polycom), Debbie Greenstreet (Texas Instruments), Bill Bumbernick (Alteva) and James Awad (Octasic).

"ITEXPO helps attendees understand the current landscape, and provides a glimpse into the future state of all aspects of the IP communications market; it showcases all of the latest technologies, and it provides the face-to-face networking opportunities that people need to conduct business," said Michael Genaro, vice president of marketing for TMC. "We're looking forward to a tremendous show next week in Miami. Conference pre-registrations are up 27% over 2008, the exhibit hall is filled with more than 150 vendors, and the conference program looks to be the strongest that we've ever offered"

General and media registration are open.

Technology Marketing Corporation (TMC) is an integrated global media company helping clients build communities in print, in person and online. TMC publishes Customer Interaction Solutions, INTERNET TELEPHONY, Unified Communications, and NGN magazines. TMC is also the first publisher to test new products in its own on-site laboratories, TMC Labs. TMCnet, TMC's Web site, is the leading source of news and articles for the communications and technology industries. TMCnet is read by two to three million unique visitors each month worldwide, according to Webtrends. For more information about TMC, visit www.tmcnet.com.

For Immediate Release PR (for ITEXPO)

(617) 262-1968 x 101

Plantronics recently reported earnings for its third quarter ending 12/31/08 and from the call there is a good amount you can learn about what is happening in communications. It should be noted that entire markets cannot be judged by a single company but since they play in so many markets, it is worth analyzing what they see happening to their business.

On the call, the company mentioned net revenues were down year over year for the quarter at $182.8 million compared with $232.8. The company says office, audio/entertainment and contact center sales were at the low end of expectations.

The company sees unified communications as a bright spot and they expect softphone growth to drive demand for more headsets.

Here is an important quote from Ken Kannappan, President and CEO:

We expect that the current environment will delay widespread implementations, with virtually all communication infrastructure players committed to UC, we believe that most IT organizations have embraced UC in their long-term planning.

Our headsets play a critical role in the successful deployment of UC, as the PC has no effective audio I/O. The built-in microphone and speaker are not private in an open plan office in the notebook for an office environment and don't offer good audio quality. This forces a choice of purchasing a headset like a USB and handset for the PC or using an IP phone for voice calls.

Clearly, the second and third options do provide the benefits, familiarity in a hand set and key pad. But the headset is more portable, hygienic, ergonomic and a practical solution for mobile usage. Furthermore, the headset allows someone to listen to streaming media for training and other growing received applications where holding a handset to listen would be absurd.

The company further expects the office and contact center to slow by 35-40% with wireless products experiencing a greater decline. According to Kannappan , "In difficult economic times, voluntary turnover declines amongst the businesses and financial professionals who are the greatest adopters of our wireless products. This dramatically reduces replacement sales. In addition, heightened budget scrutiny is extending cost controls all the way to headset purchases."

After reading through the transcript and a Q&A session with analysts there seem to be two positives here. The first is the UC/softphone market where Plantronics looks to increasing sales in the future. In addition, the company thinks it is taking share from the competition but this may be a subjective observation by management as no independent analyst firm has a complete handle on all channels of headset distribution according to management.

I find it tough to disagree with Kannappan. As we get a sense of normalcy in business - and I am not even sure how this is to be defined anymore, companies will look to improve productivity and efficiency and you just can't imagine a world of communications which is state of the art with video, IM sessions and avatars - with end-users on handsets. It just seems beyond obvious that headsets will become the rule not the exception in the global corporate and consumer world.

Until then, the companies who do adopt UC early will have a tremendous productivity and efficiency advantage over the slow-movers. And in such competitive markets a slight increase in productivity can make a huge financial difference.

Yesterday, a number of people blogged about ITEXPO and discussed what they will be doing at the show. It seemed like a good weekend project to assemble some of these posts in one place so you can join in the conversation or just keep track of some of the happenings from various points of view.

Dan York mentions on his Disruptive Telephony blog that he is looking to connect with people at the show. Here is what he has to say:

I'll be arriving Monday afternoon and then on Tuesday, February 3rd, I'll be donning my VOIPSA VoIP Security hat to participate in a SIP Trunking Workshop sponsored by Ingate Systems on "SIP Trunking And Security". These workshops are always fun to do and as they are free to anyone attending ITEXPO (even just with an exhibit pass), they are usually well-attended. I'll be bringing my recording gear, too, and the talk will eventually go out in my Blue Box Podcast feed so you will be able to hear it later.

David Byrd will also be at the show and has the following to say on his SIP and Serve by a Foodie blog:

This week we announced interoperability with Panasonic's new NCP IP PBX and we released the new IP MAN Adventure featuring AudioCodes, episode 5. The new villainess, Echo, is scheduled for launch during the week of IT Expo. It's a fun story with an exciting storyline featuring Panasonic. Like the duck paddling on a pond, our calm exterior hides the furious effort below the water line.

This year you will see new messaging, new booth skins, ads, collateral and other still secret stuff.

Why are we doing all of this?

For one thing, SIP Trunking is still the lesser-known stepsister to VoIP. Additionally, it is really unknown compared to the TDM/legacy network offerings. We have to blow our/the IP community horn loudly and often.

 No you are not dreaming, I was immortalized in the latest IP Man episode. Hint -- I am not wearing the cape.

As you may recall, IP Man was highlighted at the keynote at ITEXPO in LA -- This super hero works tirelessly with his simian companion to fight the enemies of VoIP which in past episodes were identified as noise and jitter. Future villains could even include complacency.

Here is the IP Man site for your viewing pleasure. It contains comics and videos.

Microsoft's Richard Sprague has some great comments about the show as well:

One more week and I'll be off to Miami for ITExpo East.  I don't usually look forward to trade shows, but I really enjoyed the last one and we have so many cool things planned that I can't wait to get there. 

The organizer, Rich Tehrani, wrote a nice summary of what we'll be doing there publicly, but it's actually the behind-the-scenes parts that have me interested.

There are plenty of good reasons to visit South Florida in February, but if you need another one, this is it.  Let me know, and I'll get you a free pass.

IP communications analyst Jon Arnold has some detailed comments on the show - here is a short excerpt:

TMC's ITExpo East 2009 event is quickly approaching, and I wanted to provide some updates.

First, I wanted to mention a nice gesture TMC is doing to help out those who been recently impacted by our weak economy. Rich Tehrani posted about this last week, and it's worth repeating here. TMC is offering free conference passes to industry people who are recently out of work. If this speaks to you or someone you know, please have a look at Rich's post for the details. Nicely done, TMC!

On my front, I'll be quite busy at the Expo. First off, I'll be moderating two sessions:

•  Service Provider IP Telephony: Considerations
•  Driving Benefits Through Analytics

One of TMCnet's newest bloggers Allen Miller had this to say - pretty funny guy -- can't wait to read more from him.

I don't know if associating with me will hurt their credibility but - www.TMCnet.com, the Web Publishing organization that is putting on IT EXPO in two weeks in Miami, invited me to write a blog there. It's supposed to be a pretty busy site - I'm going to give it a try - we'll see if anyone can find me there.

Regards,
Allen

I am certainly looking forward to this event and moreover I am excited to learn how the nimble communications professionals who come to this show are navigating the current financial situation. I hope to learn more about communications opportunities. What are customers saying these days? What are the hot buttons? What does the rural telco need to keep them competitive? What does the Latin American wireless service provider need? What about the SMB in Georgia - the state and country or the enterprise in NYC?

There is just so much I want to get out of this show and the excitement is mounting. As always I will keep you posted from the event but to really understand the opportunities at hand and most importantly the pitfalls to avoid, you have to come to ITEXPO yourself Feb 2-4, 2009 in Miami.

One of the most important parts of any conference is the networking... The potential to meet and speak with thought leaders in numerous markets at one time in one place. This year's ITEXPO has more thought leaders than any prior TMC event I can remember.

Although I cannot duplicate the actual conversations you might want to have with people at the show, I did try to come up with a way for you to get a feel for many of the speakers and exhibitors at the show by asking them questions I think are of interest.

It is my hope you will find the people you want to interact with, read these interviews and then take the conversation from there when you are live.

There are numerous networking events at the show as well as meals, etc. I hope you use these times productively and make this ITEXPO an extremely productive one. I can't wait to see you at the show Feb 2-4 in Miami.

Updated January 22, 2009 5:04 PM

It is a foregone conclusion that the open source market will benefit as companies look to take advantage of the lower costs and productivity benefits of IP communications and collaboration while holding the line on costs. If you are a reseller, VAR, interconnect, etc and you aren't looking to sell these systems you are at a tremendous disadvantage.

If I am a VAR, I walk into a customer and say here is what IP can do for you and here are low cost solutions which can help you while saving you a boatload of cash. In this economic climate, this pitch resonates - does yours?

It is for this reason the interest in open source and more specifically open source certifications continues to grow. After all, being certified in a hot and emerging area of communications means you are more likely to get hired by a company as an employee or as an installer of  their phone system.

In response to the needs of the market TMC is proud to have a collocated Asterisk World event at ITEXPO in 13 days in Miami. In addition, we are thrilled to be the only place in the world where you can get training on Digium-based products and also those from Fonality.

If you are looking to save money while boosting sales and your resume, you simply have to be at this show.

Here is the schedule of training events and this represents only a small part of the overall open source communications content at the show.

• Switchvox, Tuesday  Feb 3, 8:30-5:00
• Asterisk 123, Wednesday Feb 4, 8:30-5:00 (This is the first time this course has ever been available)
• Trixbox FtOCC Technician, Feb 2-4

I look forward to seeing you soon in Miami.

Seriously - near-single digit temps with chills in the sub-zero range?  I had to pry my hands off the frozen steering wheel when coming to work. Ouch. It's enough to make you want to retire to Florida tomorrow. But we all know this cold spell much of the country is suffering through will be over in a few months. While we wait, I just can't think of a better place to conduct serious communications business than Miami while at ITEXPO in a few weeks. Hope to see you there.

Bring your shorts.

Reports are circulating that Nortel has declared bankruptcy and pieces will be sold off to foreign firms. Company sources say this is untrue. Here is the complete story.

In the past 24 months, global financial markets have gone from encouraging companies and individuals to take on as much debt as they can to abruptly stopping all financing and debt renegotiation. During the dotcom/telecom bubble, VCs poured money into companies, forced them to spend it rapidly and then evaporated, leaving the companies dead on the vine. Similarly, one day we all woke up and found out debt was bad and if we have it, we are in trouble.

How did Nortel get into this situation?

Remember the heady dotcom days when people made a year's worth of mortgage payments on a week's worth of optical stock gains. This is when Nortel was acquiring companies. They certainly weren't alone but when they should have been recovering from this overvaluation feast a few years later, CEO Frank Dunn and other corporate executives who were compensated by increasing stock valuation cooked the books.

The company has struggled since and depending on what numbers you want to use - taking into account leases, etc they have up to six billion dollars of debt which means they pay hundreds of millions of dollars of interest. Couple this with pension liabilities of a company which is over 100 years old and add a dash of really tough economy, tough Asian competitors and an aversion to marketing and you have an extreme challenge in front of you. Call it a business Rubik's Cube but with 100 squares on each of six sides.

All of these problems coupled with bad earnings and reports Nortel was consulting with bankruptcy firms started a firestorm of discussion online and the business media about Nortel's fate.

With an interest payment of $107 million due soon the company took the opportunity to reorganize their global enterprise in a manner in which they will likely retain control over the process.

I should mention that the nuances of bankruptcy code are not my area of expertise but given the direction of the global markets I do fully expect to be well-versed on the topic by the end of this year. In Nortel's case, as a multinational company they have to deal with different terms and codes in various countries.

In researching this post I spent a good deal of time reading about US and Canadian bankruptcy law, articles from trustworthy sources, a news release with a quote from the Canadian ministry of Industry, a voluminous statement from the company  and I spent a good deal of time picking the brain of the President of the Enterprise Solutions Division of Joel Hackney.

In the company's statement they mentioned they are seeking creditor protection under the companies' Creditors Arrangement Act ("CCAA") in Canada. They further explain certain of the company's U.S. subsidiaries, including Nortel Networks Inc. and Nortel Networks Capital Corporation, have filed voluntary petitions in the United States under Chapter 11 of the U.S. Bankruptcy Code, and certain of the Company's EMEA subsidiaries are expected to make consequential filings in Europe. The statement further explains the company's normal day-to-day operations are expected to continue without interruption. Another important statement is Nortel remains 100% focused on serving customers worldwide through continued R&D investments and support of its product portfolio to fulfill customer needs.

Since Nortel is a Canadian company it is worth looking at what experts like PwC say about the CCAA. According to the company, financially troubled companies owing creditors in excess of $5 million are eligible for court assistance in restructuring their affairs.

The following are the details according to PwC:

The process begins in the Court system when the company applies to the Court for protection under the CCAA. The Court will issue an Order giving the company 30 days of protection (often referred to as the "Stay") from its creditors to allow for the preparation of the Plan of Arrangement. The Court can extend the Stay against the creditors upon further application to the Court by the company. Typically, the Court will continue the protection beyond the initial 30-day period if the company can demonstrate that it is likely that it will file a Plan of Arrangement and an extension of the Stay is not prejudicial to the creditors, as a whole. There is no time limit on how long the Stay can be extended. During the Stay period, the company will often continue operating, although it may commence restructuring activities at any time.

A Monitor is an independent third party who is appointed by the Court to monitor the company's ongoing operations and assist with the filing and voting on the Plan of Arrangement. It is not uncommon to see a company's auditors acting as the Monitor. The Monitor's duties include monitoring the business, reporting to the Court on any major events that might impact the viability of the company, assisting the company in the preparation of the Plan of Arrangement, notifying the creditors (and shareholders) of any meetings and tabulating the votes at these meetings. The Monitor prepares a report on the Plan of Arrangement that is usually included in the mailing of the Plan.

The Plan of Arrangement is the proposal that the company is presenting to its creditors on how it intends to deal with debt it owes at the time of the initial filing with the Court. There are no restrictions on what the Plan can entail. It is not uncommon to see offers to pay a percentage on the dollar of debt, either as a lump sum or over a period of time. Plans can include an offer of shares of the company in exchange for the debt outstanding or a combination of cash and shares. The debtor can identify a particular creditor or group of creditors as "unaffected." Unaffected creditors are included in the Plan and are not to be paid in the normal course. One of the benefits of the CCAA is that it allows for this flexibility when trying to put together a Plan.

In order to be able to vote on the Plan and receive any distribution under it, a creditor must file a Proof of Claim with the Monitor. The Proof of Claim sets out what is owed to the creditor and is reviewed by the Monitor and the company. Any discrepancies between the creditor's Proof of Claim and the company's records are investigated by the company. The Plan will outline the procedures for dealing with disputed claims.

Ultimately, the company files its Plan of Arrangement and forwards it to the creditors/shareholders. A meeting of the creditors (and shareholders, if applicable) is called to vote on the Plan. For the Plan to be binding on each class of creditors, a majority of the proven creditors in that class, by number, together with 2/3 of the proven creditors in that class, by dollar value, must approve of the Plan presented to them. If a class of creditors approves the Plan, it is binding on all creditors within the class, subject to the Court's approval of the Plan. If all of the classes of creditors (and shareholders, if applicable) approve the Plan, the Court must then approve the Plan as a final step. Upon Court approval, the company continues forward as outlined under the Plan until it has satisfied the requirements under the Plan.

If a class of creditors or the Court does not approve the Plan, the company does not automatically go into bankruptcy, but the Stay is lifted. However, once the Stay has been lifted, the pressures that caused the company to initially file for CCAA protection from its creditors will likely return and, accordingly, it is quite likely that the company will be placed into receivership or bankruptcy.

US bankruptcy law is similar (at least to me) and if you have morbid curiosity, knock yourself out.

Nortel CEO Mike Zafirovski said in a prepared statement, "These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry that its people, technology and customer relationships show it ought to be. I am confident that the actions we're announcing today will be the fastest, most effective means to translate our improved operational efficiency, double-digit productivity, focused R&D and technology leadership into long-term success. I want to reaffirm Nortel's dedication to delivering world-class solutions and services to customers."

It is also worth mentioning the company's affiliates in Asia, including LG Nortel and in the Caribbean and Latin America, as well as the Nortel Government Solutions business, are not included in these proceedings and are expected to continue to operate normally.

Nortel is a huge Canadian employer and a tremendous source of pride for Canada. One would expect the Canadian courts to look to Nortel as favorably as possible.

In my conversation with Hackney he confirmed that a number of acquisitions at premiums contributed to the company's woes. Moreover, he reiterated the prepared statement that the company has 2.4 mbillion dollars of cash on hand.

According to Hackney, "Nortel is still very much in business." He went on to say they continue to be 100% focused on driving results for their customers. To understand why I can say this confidentially, you have to understand some of the details according to Hackney. He mentioned they announced a comprehensive financial restructuring of the organization to address significant liabilities which have been plaguing the corporation and are now compounded by the current economic environment.

This process which has different names in different jurisdictions allows them to address the debt load and pension liabilities which have been built up over the years. Hackney mentioned this restructuring is a decisive move by the board of directors to deal with the cost and debt burden and effectively restructure its operations.

Hackney reiterated the $2.4 billion allows the company to stay in business and support customers while restructuring the capital structure of the corporation. "This move keeps customers from further risk" he said.

Hackney also reiterated the company has struck a deal with Flextronics, the company who makes much of Nortel's gear. This was done to ensure continuity of products to Nortel's customers. Hackney concluded by saying, "While this is a difficult decision, it is the right decision and the best chance for Nortel to come out of this process much more focused, financially sound and competitive."

In response to an article in the Canadian newspaper Globe and Mail mentioning Nortel will be chopped up and sold to international competitors Hackney said, "We will not speak to rumors and the Globe and Mail is very effective at selling newspapers."

He further went on to say the strategy he has discussed with me in the past is still the company's strategy and this [action] is the best way of delivering upon that.

We spent some time on our call going over the nuances of what is bankruptcy and what is not and it seems to me more important to point out that through this process it seems likely the company will be in control of its destiny and I further I expect Canadian law to be quite flexible with Nortel. It remains to be seen what happens in other parts of the world.

Obviously there is increased risk in such a process but we have seen companies enter bankruptcy before and emerge stronger while doing so in a fairly seamless way to customers.

A point worth making is if the company is about to divide into 10 pieces and sell them, he can't legally tell me. But realistically, Nortel itself is the result of various mergers with companies such as Bay Networks who were substantial equipment manufacturers at one time as well.

Point being, product lines with customer bases almost always find buyers who want to keep customers happy and will continue to support and improve these products over time.

So regardless of what we call this - creditor protection, Chapter 11 protection, bankruptcy protection etc - what is happening behind the scenes is the company running today the same way it did yesterday.

The next obvious question is the company's burn rate because $2.4 billion in cash on-hand seems like nothing in these days of TARP funds and frequent industry-wide bailouts. To this Hackney mentions that the major items contributing to burn rate will now be reduced or go away and this is the most effective way to address it [the debt load].

Hackney says he spoke with five large CIOs of multi-billion dollar companies before our conversation today and he says these are savvy businesspeople who understand the need to restructure Nortel's capital structure. These customers said they need Nortel and were appreciative of being advised of the situation. They further requested to know what they can expect going forward.

Hackney says all earlier commitments to the partner and customer base will continue. He says this with confidence because they were doing these things with the significant debt burden they previously had. The issue for Nortel of course is does the stigma of Chapter 11 reorganization scare customers away or not. Obviously competitors love this sort of news but in today's environment, having financial difficulties and needing billions of dollars you don't have seems to be a common theme across many industries.

Hackney couldn't comment on what he thought this news would do to sales and mentioned forward visibility in this economic environment is uncertain.

When asked about how new customers should look at Nortel, Hackney replied, "We have always sold customers on the product capability, our technical support capabilities and our ability to save them money and make their companies more competitive." Hackney says this will continue to be the message and he is confident he can continue to demonstrate this fact.

He reiterates in a tough financial climate this will be a challenging objective but says his capabilities to add value to customers are as strong as they ever have been.

It is obvious Nortel will lose sales and share as a result of this news. That is a dead easy one to predict. How will the company respond? In the future, if sales do drop off more than expected we will see more job cuts and even salary reductions which we have already seen in the communications and automotive spaces.

Hackney assures me there won't be any more big announcements in the next few days (referring to negative news I am sure). He also wants to reassure customers again - it is business as usual.

In summary, I am comfortable with what Hackney is saying and am shocked there are no layoff or salary reduction announcements as part of this news. Nortel has done lots of things wrong and right over the years. What is important to keep in mind is they still have a huge line of products and customers, suppliers and partners who depend on them. The company will not evaporate overnight. Expect me to be keeping in touch with Nortel and passing along whatever I find out.

Recently Glowpoint put out the news they had record call volumes and I thought it made sense to learn more so I interviewed the company's CEO Michael Brandofino. The company plays in spaces which have been resistant to the slowing economy - namely videoconferencing, telepresence and contact centers.

I should mention Glowpoint has a market cap of just under $15 million as I write this article but in the last year, its performance has been down 33% which is better than down 36% for Cisco.
 

Why do you think your company had record call volumes?

There is a combination of factors that are driving increased video call volumes for the overall industry - and for Glowpoint in particular. There is a perfect storm that has developed and points to video communications as the solution for many of the concerns facing businesses today. Concerns such as the global economic recession, global warming, terrorism, erratic fuel prices, and the desire for corporations to be global in order to be competitive. These concerns have persuaded companies to view video communications as a critical tool for everyday business.

Glowpoint has especially benefited from this perfect storm because customers are increasingly turning to service providers who can support - and manage - their video communications needs. We reported during 2008 that we had achieved record sales in the third quarter, due to valuable telepresence customers. In fact, a majority of customers had locations activated in November and December, which resulted in increased revenue, as well as increased usage.

Did this equate to record revenues?

Glowpoint's core revenue is broken into two main areas: Contracted monthly recurring, and usage-based. About 70 percent of our revenue is monthly recurring revenue, and it's tied to contracts typically with terms of one, two, or three years. Usage-based revenue consists mostly of multi-point conference services, and one-time events, in which customers use services on an "as-needed" basis.

The great thing about a recurring revenue model like ours is that we can grow on a consistent basis, assuming that churn remains low. We have had more than seven consecutive quarters of growth in our recurring revenue, thereby achieving record revenue due to the increased volume and new customer activations.

Are prices/margins being squeezed in this environment?

We haven't seen any significant pricing pressure for our services, because we provide an unlimited usage model that represents a significant savings when compared with the two common alternative ways of pricing video communications. One is a phone service called ISDN, which essentially involves special phone lines requiring at least six simultaneous phone calls to support video. ISDN usage is extremely expensive and results in local - and long distance - charges that can run up hundreds of dollars per hour. The other way is building your own network and video infrastructure, which can be extremely expensive if you consider the equipment, network, and human resources required to support such a service. Our customers generally enjoy a savings of 50-to-70 percent by outsourcing their video needs to Glowpoint.

What sized companies were the biggest customers these past months?

Glowpoint has increasingly been winning contracts from large, multi-national companies. Towards the end of 2008, Glowpoint closed deals with two U.S.-based companies that had annual revenues exceeding $1 billion USD, in addition to a European-based energy company that had annual revenues in excess of $23 billion USD.

When do you expect to get your company to profitability?

Our management team has steadily improved all of Glowpoint's key metrics, while continuing to drive innovation and surpass the competition, since we took over the company in 2006. Our goal is to achieve positive operating income in 2009, but we have not provided specifics on exactly when we anticipate achieving that goal. 

Do you believe your company's market cap is an accurate reflection of your value?

No, we do not. We feel our market cap does not adequately reflect the value of our company, if you consider that approximately 70 percent of our revenue is driven by a diverse portfolio of customers tied to contracts with monthly recurring revenue commitments and that our overall gross margin has grown to approximately 43 percent.

And also, we averaged more than $6.2 million in quarterly revenue through the first three quarters of 2008 with seven consecutive quarters of growth in subscription revenue.

Combine these performance metrics with the fact that the surface of the market opportunity for video communications services has barely been scratched and I think it is clear why we believe we are currently undervalued at this time.

How is telepresence doing as a market segment?

The interesting thing about the telepresence space is that the lines are becoming extremely blurred regarding what telepresence specifically "is." Originally, telepresence referred only to the high-end rooms in which the entire room was designed to create an immersive video communications experience. However, Cisco and other companies have extended this to include simply high-definition (HD) videoconferencing systems as well. Either way, telepresence has had a tremendous impact on the video communications industry because it has increased the awareness of the extraordinary quality, and functionality that is available. And it also validates that video communications can be valuable, everyday tool. Much of the new business that we won during the second half of 2008 was related to telepresence and HD, and we believe that business will continue into 2009.

How about video call centers?

Our initial implementation of our video call center solution was tailored for the banking industry; in fact, our initial customer was one of the largest banks in the world. Given the recent challenges facing the banking and finance sectors, a number of the opportunities we were working on have been put on hold. As a result, we have put less emphasis on this solution, and more emphasis on driving managed services for telepresence.

Tell me more about your Telepresence inter-Exchange Network (TEN)

TEN is one of the most exciting new developments that we have been working on. The best way to describe TEN is to go back to what people really understand, such as the audio world. When you install a phone system, you always install a circuit to the carrier, and that provides you with the ability to dial, and call off of, your private business network - in a secure manner. No one can call you unless you give them your number, or if you list it in a directory. It allows you access to services, such as long distance, in addition to the ability to call people on other networks, such as cell phones or on private phone networks. So even though you are in your business, and I am in mine, we can still talk to each other. That's a service provided by the audio carrier.

"TEN" is the video service equivalent. When a company purchases video equipment, they can connect to a video communications interface. They get a dialing plan with access to features and services, such as video multi-point calling, video mailboxes, and user portals to manage their accounts. It's about being part of a global video community, and having access to web-based global scheduling, so that you and I can schedule video calls together because we are both connected through TEN. Or we can even make a direct video call on an ad-hoc basis. It also offers secure network connectivity so that people can leave their private network to call another private network - safely. And it's about operational services because, just like an audio bridging service, similar services must be available for video communications as well.

Think of it as a global video community similar to the popular business network called LinkedIn, or the social network called Facebook. We are not replicating their model or brand, but the analogy is great way to explain the concept. If I were linked to you, I could send you a message and say, "Let's do a video call." You could approve it. And then, even though we are both on separate, secure networks, the video call would be automatically connected. TEN is about maximizing the value of video technology - by making the use of it frequent - and easy.

What can an Obama administration do to increase American competitiveness?

As a CEO of a small business, I am keenly aware of the challenges facing businesses that are trying to compete in a global economy, especially small, publically traded companies. The burdens related to taxes and regulatory requirements are a hindrance to our ability to invest in creating more jobs and remain competitive. Small companies, like Glowpoint, thrive as a result of the entrepreneurial spirit that allows management and employees to benefit from their hard work, ingenuity, and resourcefulness in the form of options and stock grants. However, due to excessive income and capital gains taxes, that entrepreneurial spirit can be stifled should workers feel penalized if they are successful. The Obama administration should look for ways to encourage business owners, and management, to invest in expanding their businesses. The administration should even consider incentives for growing revenue, and stock valuations, without penalizing success with higher taxes. 

Where will your company be in 5 years?

Our visionhas always been to be the "de facto standard" service provider for video communications - on a global basis. I believe this is needed, and many in the industry feel the same. We are stepping forward to hopefully become the central video service fabric, and global interconnect, through our TEN offering. It's really akin to what AT&T used to be for long distance telephone. Everybody's long distance service passed through AT&T as recently as probably 30 years ago. For the foreseeable future, that's going to have to happen in the video communications industry for it to truly become a mainstream communications tool. Some central guiding body is going to have to drive video communications between companies. The vision for Glowpoint, and I believe the vision for the industry, is to have someone like that. We believe that "someone" is Glowpoint.

Therefore, in five years, I would like to think that Glowpoint will become the primary "providers' provider" of video services, as well as their underlying service fabric globally.

We are a visual culture, as shown by the popularity of things such as You Tube, and cameras on almost every cell phone. So it stands to reason that video communications is here to stay.

We are in the very early stages of the adoption of video communications - and the upside potential is substantial. We feel we are in the best position to benefit as video adoption continues to grow in the foreseeable future.

Based on these responses it seems the video call center market will evolve more slowly than some thought and moreover it is good news to see there doesn't seem to be much pricing pressure in what seems to be a deflationary economy.

I am also very interested in seeing how the company's Telepresence inter-Exchange Network (TEN) evolves. Will it become the global video community the company hopes. Is there room for a single major video service provider in the world? I say yes. Will it be Glowpoint? We will see.

What is certain is the future of video seems bright based on a variety of factors and companies which learn to leverage it in their businesses will be more productive and those companies such as Glowpoint that can become essential video suppliers should fare well as the market grows.

According to Jon Arnold an analyst who gets paid handsomely to share his thoughts on the future of communications, SIP trunking is a must for companies not only looking to save money but for those looking to reevaluate their processes to ensure they are as efficient as possible.

To read more about what Arnold thinks, check out this interview with Greg Galitzine and be at ITEXPO to check out the session SIP Trunking: Everything You Need to Know which Jon will moderate.

It is definitely worth pointing out that even in the toughest economic environments; some companies believe the telecom space makes a great investment. Witness the recent ADC investment of $33 million by Citadel (which some call daring) and today's news that Intel Corporation's strategic investment group, Intel Capital, as well as DFJ Esprit and Eden Ventures will put $11 million into Tribold to help company's position in the enterprise product management space as it relates to carriers.

The company offers their SOA-based Tribold Integration Services Framework which provides the necessary product data management infrastructure to interface product and service data to BSS and OSS applications. Examples include CRM, billing, order management, SDP, provisioning and  online portals. The company further focuses on making carriers more efficient and in this economic climate they seem to have the right product at the right time.

The money will be used to bolster sales and marketing as well as product development.

From my vantage point the service provider market has never been at a better and worse point. If you are supplying legacy voice equipment and/or products you will have a tough time but if you have equipment which helps carriers provide wireless data, or save/make money, you are in a great area of the market.

For the foreseeable future, many segments of wireless will be most resistant to a downturn and the jury may be out on WiMAX for now. In fact, well-known 4G analyst and TMCnet blogger Paul Kapustka is the only person I know who figured out Clearwire, the king of WiMAX is hedging its bets on LTE.

Still, there seems to be insatiable demand for wireless service and one can only imagine how much more spending there would be by global consumers on wireless devices and service in a good economic climate.