I came across this interesting article from Rafe Needleman about web 2.0 startups which will not make it through the economic downturn. Here are my thoughts on some of the companies on his list:

Twitter: I agree the company needs to generate revenue and showing some ads wouldn't hurt the business model that much. As I mentioned recently -- I have started to use this service regularly -- but I am not promising I will have time to continue.

Zillow: This site seems to be used by virtually everyone who owns a house -- is shopping for one or is curious to see how much their friends and coworkers are worth. You enter an address and get a home price. Cool stuff -- but at some point it does need to generate revenue. I did see an ad for State Farm Insurance on Zillow today so I am not sure this site is doomed. Then again, I don't know what the site's expenses are.

Pandora: I would be devastated if this one was to die off. The ability to play customized music based on a single song or artist is amazing. I do know the company has agreements with AT&T and Sprint to stream music for a small fee. Hopefully this along with the in-home consumer-electronics agreements it has will keep it going.

Second Life: This one could die off. I could see it happening due to the massive infrastructure costs. Rumor has it the platform will spin off an enterprise offering soon. If so, this will potentially bring in revenue as I believe virtual worlds will play a larger part in future communications.

Skype: Why would Skype go away? I don't get the thinking here. The company is growing revenue and one imagines in a slowing economy, more people will Skype than ever.

Ask: This search site keeps getting better and I try it monthly in the hopes I will like it. I never seem to like it enough to try it twice in a month though. I am unclear about how this site will do but I think it makes a nice acquisition target for Microsoft and even Oracle.

Perhaps the most important thing to take away from this article is that companies need revenue models or investors with the deepest of pockets to make it through any slowdown. Remember though that one of the reason's Google has done so well these past years is that they were busy building a search engine and investing heavily while others lost funding and abandoned the market.

In other words, when we come out of this housing/financial storm, there will be a string of new winners in a number of markets that will be really tough to compete with. It happens every time. The question is, will investors have the patience and funds to ensure these companies cross the chasm to profitability?

One of the people with a long history in the communications space is Neal Shact (pictured) -- CEO of Communitech Services. In the past, Shacht has been a distributor in the headset market and has been early in many new markets such as VoIP, call centers and others.

Shact points out it is impossible for customers to know what they want in UC. He mentions the old story that Henry Ford once said people when asked what they wanted in transportation said, a faster horse.

His point: you need a communications roadmap. Don't rely exclusively on your UC vendor to dictate what you want and need.

You want to check out this podcast as it is rife with references outside communications -- and the tie-ins are fascinating. In addition, he has a way of bringing tech and communications together.

I truly hope you enjoy it.

Recenty I heard from old friend Brian Mahony (pictured), the VP of marketing at localcasting (in-home broadcasting) company ZeeVee. Mahony has worked at a number of companies on the cutting edge of technology in the decade in a half or so I have known him. When I met him in the nineties, he was working for Tundo - one of the first IP PBX companies which like so many others, ran out of funding during the dotcom/telecom meltdown. He then worked for a number of IPTV companies including Espial and Netcentrex  which was eventually acquired by Comverse Technology.

Now at ZeeVee, Mahony is about as full of energy as I have ever heard him and he seems to be revved up by the opportunity in front of his company which is becoming the defacto way to broadcast internet-based HD content to all televisions in a home.

What Zeevee does which is different from other approaches is eliminate the premise that a standalone TV box is the answer. In other words, it does away with the notion that you need an internet-connected box on all the TVs in the house. In addition the company does away with the notion that the standalone box should be a computer. In fact, instead of putting a computer in a box and connecting it to the internet, the company's ZvBox connects to a PC in the house and broadcasts HDTV internet video content throughout the home's cable TV cabling. Thus the term localcasting.

Once connected, the user sits in front of the TV with an RF-based remote control

and watches virtually any Internet-based video content. In addition, the customer can use the box to watch locally stored movies and DVDs. This gets us to the next point which is elimination of what Mahony refers to as the digital octopus (pictured) - referring to the tangle of wires and devices which live near your television. Mahony further explains that the new televisions with their wall mounts have become like artwork and many people are not happy with the tangle of wires near their TVs.

The logic of using the PC as the heart of a converged solution is the PC can decode any content on the web. Mahony reiterates it is the best device (as opposed to a standalone box) for streaming television and videos and he is right. I should mention he says this because the PC can decode anything and specialized equipment would have to be constantly upgraded to achieve the same functionality. Basically the standalone box has to be a PC to function properly.

Mahony further explained that many of the networks do not like to have terms dictated to them by cable companies and moreover do not want to share their revenue with such partners. In addition they are yearning to get more internet viewers as these viewers can identify themselves and as such provide a basis for more targeted ads which can mean more revenue.

One network has even told Mahony (he wouldn't say which) that they are now making more money online than they are on cable. This is partly because viewers seem to be more loyal online - watching more episodes and in addition, old content which is posted on websites is generating massive amounts of traffic and generating new viewers as opposed to cannibalizing existing ones from TV.

Mahony explains the box works with all content and various formats such as Amazon Unbox (now called Video on Demand), TiVo, Netflix, iTunes and others. In addition, the company has something called a Zviewer (soon to be released in Beta) which allows all videos to be watched from any PC. One of the benefits of this viewer and this solution in general is menu system which allows access to a slew of content types which are updated regularly and is hopefully easy to navigate.

The system also supports Dolby high quality audio and Dolby 5.1 is in the works.

In addition, the remote allows web browsing meaning all HDTVs now have access to web surfing. So while watching a ball game you could use Picture in Picture or PiP to surf your fantasy sports stats.

The downsides are minimal - it is possible that configuration could be a problem but Mahony says it is pretty seamless and most users shouldn't have a problem. It is also a PC-only solution for the moment. In addition, a cable company or other broadband provider could make a stink about using bandwidth and limit your download speeds. This wouldn't be surprising to me as this box cannibalizes their primary revenue generator. I hope the FCC and politicians are reading and weighing the pros and cons of ISPs throttling bandwidth and in the process reducing the likelihood game-changing technologies successfully get into the hands of US consumers.

Mahony also points out the solution may not be the best for sports as IPTV and cable solutions provide better quality sports than what is available online at the moment.

In addition, you need an HDTV to work with this system but this is a minor challenge as well. Perhaps the last drawback is the price but even though the company feels the $499 price tag may be high for a consumer electronics device, it really isn't. I say this because to get a wired solution which does everything ZeeVee does for such a low cost is a bargain. Sure, we could argue all day about other ways to accomplish what Zeevee is doing but their different approach is also embraced by the IPTV carriers who also repurpose the in-house coax wiring. I consider this a major validation of a well thought-out product.

It is also worth pointing out there is no per-month fee to use this service and the company is purposely trying not to put up any walled gardens, meaning you can access any content for free once you have the box. Still, Mahony does not discount the idea that a lower-priced box subsidized by a monthly fee and long-term contract won't be available in the future. In addition, ZeeVee is in discussions with partners who may be able to provide more flexible pricing terms and other distribution models. I wouldn't be surprised if the networks themselves started subsidizing these boxes.

From my perspective this is a very intelligent and elegant solution to bringing the best of the web to the TV. There are certainly many ways to accomplish something similar but the combination of web access on the TV and the ability to access many types of media seamlessly from any HDTV in your house make the ZeeVee solution a real winner. I can't wait to try it myself.

Kontron seems to be growing by leaps and bounds in not only market size but expertise. The latest acquisition made by the embedded computer solutions company is the Intel Communications Rackmount Server business.

For Intel this move makes sense as it allws the company to focus more on its chip business and for Kontron the move is logical as well as the relationships the Intel team has are valuable and in addition the new 70-person team has working knowledge of how Intel operates and the relationships needed to be successful.

TMC's Zippy AKA Richard Zippy Grigonis has more detail and is certainly something of an expert in this area.

As a major supporter of open source -- especially in the communications market, I cannot be more thrilled to announce that Digium will be co-hosting Digium/Asterisk World at ITEXPO this February in Miami.

It is well-known that open source companies consider ITEXPO an important event and one where they come to meet service providers, resellers and other companies looking to deploy open-source solutions. This news solidifies TMC's commitment to open source as a solid choice for companies looking to not only purchase today's solutions but to resell and develop tomorrow's breakthrough products.

Mark Spencer, founder and CTO of Digium and original creator of Asterisk had this to say about this news. "Hosting Digium|Asterisk World at ITEXPO East 2009 will allow us to share the vision and power of Asterisk with a broad set of customers who might not be familiar with open source. By giving them their first taste of Asterisk, we empower them to not only save money but to use and create new technologies that never existed before."

For my part, I salute Mark and his company which has brought open source communications so far, so quickly. The entire open source communications market has gained massive credibility due to Digium and the many other pioneers who supported Asterisk over the past years.

As always, all members of the open source community are welcome at all TMC expos and to learn more about this news, please visit the Digium/Asterisk World section of the ITEXPO site.

We looking forward to seeing you all February 2-4 in 2009.

I have been getting more and more questions on where the communications market stands in light of macroeconomic conditions. It is a constant in my frequent conversations. In most cases, when I get this question, people tell me their business is good but they wonder if the housing market problems will trickle down into the telecom space.

The answer is simply, I do believe there is risk to all sectors of the global economy. For the first time in my memory, US and other political leaders have come on TV and mentioned the term global crisis on a frequent basis. This sort of talk shakes confidence. This is simply the way it works.

The question we need to ask is how do we benefit in such a scenario or at best, how do we tread water so our sales, revenue, income does not decrease?

Most importantly, you need to focus on areas which save your customers money and make them more productive. UC, telepresence, workforce automation, FMC and other technologies pay for themselves quickly. In addition, SIP trunking is a natural in this market... You save your customers money and get a recurring revenue source if you are a service provider or reseller.

Subsets of the communications market are on fire. Mobile banking and WiMAX are a few. Emerging markets and rural America are ripe for wireless broadband.

In fact, these markets are ripe for all forms of communications and penetration in many cases is extremely low. Of course this equals tremendous opportunity.

In a slow market there is pressure to purchase less but we have crossed the chasm of mobile web browsing these past years and we will see more devices with mobile broadband and this leads to the increased use of the internet on the go. As this trend continues - the opportunity for wireless services increases as well. This leads me to the mobile application market. You need to have an application which works on the iPhone, RIM devices and eventually the Gphone. Don't forget about Windows Mobile or Nokia by the way.

I have seen many recessions in my day and the telecom space is one of the few which saw something called a nuclear winter between 2001-2003. What I learned from these experiences is that every slowdown ends at some point and customers do not ever stop buying - they may slow, they may delay, but they don't stop.

In other words, even if things slow down in our space, they will speed up again. The strategy for making sure you come out the other end of a slowing economy in a better position than you are in today is as follows:

Conserve Cash: This is obvious but how you do it is crucial. If you cut your PR, marketing and R&D, where do you think you will be in a slowing market? None of these areas can be cut by more than a few percent. If you have to cut a bit more, R&D is the area to cut incrementally from. The reason is that the feature wars most companies fight are less important than explaining to customers why they need to buy your products.

Keep in mind, every company you sell to now has to go through more internal scrutiny before they buy. You need to reinforce sales with more marketing and sales efforts. In order to last in a slowing market you need to ensure you are still selling. If you are too heavily R&D focused and don't do marketing and PR effectively, hire an agency to help you immediately.

Become More Productive: Every company needs to operate at 100% efficiency. Cut off your dead wood. Do it today. It is time to let the complainers and high maintenance people go. If they aren't happy, you are doing them a favor. Believe me; it will work out better for you and for them.

Rally the Troops: Explain to them why they need to work smarter, harder and faster. Customer service is key. Don't lose customers because of bad service.

Hire PR/Marketing People: If you aren't strong in these areas, you have to hire an agency or top people who can help you market more effectively in slow times. I have witnessed many millions of wasted marketing dollars in my life. Spending a marketing budget and spending it wisely are totally different things. A million dollar marketing budget can be blown stupidly with 10 newspaper ads or used much more effectively in focused media vehicles where your potential customers are actually looking for your products.

Market Analysis: There are hundreds of small companies which are engineering driven in the communications space which do not know how to market. Companies founded by engineers are typically the worst run from a marketing perspective. (Remember - I am an engineer myself so no insult intended - we aren't sugar coating here). These companies - where the engineer runs marketing are likely going to have trouble selling products in a slowdown (or any other time for that matter). Keep your eyes open for acquisitions or weakness in the markets you serve. Keep your ear to the ground. One of these small companies about to go under may have good ideas for products but just no clue how to sell them. You may determine developing a competitive product/service to one of these small companies makes sense.

Speed: It is better to be fast than right. After all, you can't be right every time but if you are fast, you can adjust and become right faster than the other guy.

Optimism: Be optimistic. If you are smart and run things well and your entire team works together to support you, your company can come out of any downturn stronger than it went in. Sure, be cautious --but in the end, business is cyclical. It just is. That is the nature of the beast. Work harder, faster and smarter and you will be rewarded.

Remember, things are still generally good in the communications and technology markets and if you follow these rules you should make it out the other side of any slowdown in better condition than you are in today.

How do you celebrate one of the worst days for the US stock market in years? Simple -- you go out and buy a yacht with 26,000 square feet of sales. Oil money at work you think? Nope. Credit goes to VC, businessman and early HP employee Tom Perkins a founder of Kleiner Perkins Caufield & Byers.

Worried about your job? No need. With this many square feet of sails and a yacht of this size, Perkins alone could be responsible for thousands of new US jobs.

Please note this post was written approximately one week ago -- before the news of the bailout bill failing began to spread fear in the financial markets. Stay tuned to learn how the financial markets will affect communications and technology.

Many people asked me recently at ITEXPO West 2008 Los Angeles, what I see happening in the communications market from an economic perspective. Let's just say that on the way to the show, I was watching TV as the stock market plunged and there was talk of another Great Depression. When I got to the show I must say I was unclear how the financial markets would affect the communications space.

After speaking with many people in our markets, the end result is most people believe the space is very strong and in fact some companies are seeing increased sales of their solutions as a result of travel cutbacks and high fuel costs. It seems if you sell products which increase productivity when corporations are belt-tightening, you are in good shape.

In fact the attendance at the show was very strong. I feel we would have had even more traffic if there wasn't as much fear in the financial markets. What really made it an interesting week was when I turned on CNN; I thought I was on CNBC. The coverage was 100% financial, all the time. In such an environment, people probably have trouble leaving the TV. Even the news anchors on CNBC who typically leave in the late morning were at their desks until after midnight.
Certainly TV stations feed on this viewership and seem to ensure they position the news in such a way to ensure it is self-perpetuating - but this is a topic for another day.

The tremendous focus on negative financial news from the general media led to the stories I heard of hedge fund redemptions leading to lower industry stock prices. In addition, a general theme in our markets and beyond is companies pausing more before signing contracts. There is more indecision than at any time I remember. Companies want to reinvest in their businesses but they seem to just be waiting more than they used to.

In my opinion, in order to counter this delay in contract signing, we have to work harder and/or smarter, making more sales calls and doing more marketing. Sales after all is a numbers game when all else is equal. Now is when companies who are good marketers will take share from those who are good engineers. It happens every time the economy slows and this time will be no exception.

In fact, companies who used to rely heavily on existing companies to fuel their growth by supplying solutions to a growing workforce are going to have to shift to customer acquisition. Companies are not adding as many employees as they used to which means growth has to come through competing for new customers.

If you work internally, you need to spend time selling the productivity benefits of the solutions you propose purchasing. In some cases, vendors will work with you on financing (assuming there are banks left when you read this) who can ensure a positive ROI from day one of the investment.

So my final response to financial question in our markets is that if I had a choice of industries, I would want to work in one where our products help companies save money. Moreover, I would want to work in an industry which has little excess and has already seen its bubble burst years back. I do believe communications is a great place to be and new technologies like UC, mobility and telepresence make companies stronger and more productive and in a slower market, these are the things companies desperately need.

I am traveling today so blogging activity may be lighter than usual. In the mean time, here are some stories which my be worth reading. I don't know about you, but it seems the news flow in the communications and tech spaces has been greater than ever these past weeks. For someone like me this presents many opportunities to compare and contrast how companies see the future. Expect more analysis from me when I get a chance to sit at a desk.

» Cisco Intros New Unified Communications Solution

» NEC Intros New Unified Communications Offerings for SMBs

» Digium Recognizes Asterisk Innovation

» Konftel Launches SIP-Based Conference Phone

» Digium Switchvox SMB 3.5 Receives 'Best of Show' Award at ITEXPO West 2008

» D2 Technologies Software Platforms Powering IP Communications

» Eyeball Networks Continues to Innovate with NAT Traversal Solutions

» deltathree Focusing on VoIP Hosted Communications Market

» Quintum Honored at INTERNET TELEPHONY Conference & EXPO

» Konftel Launches SIP-Based Conference Phone

» Communicado Aiming to Help Resellers Offering UC Solutions

» OpenPeak Uses Intel Atom for New OpenFrame IP Media Phone

» Adaptive Rolls Out Concourse 3.0

» Cyberhand Releases VoIP and Speech Recognition Mics

» Patton Releases Carrier-Grade BRI VoIP Adapter

» OpenPeak Intros OpenFrame IP Media Phone Platform Using Intel Atom Processor

» AireSpring's Best Practices for Voice Network Utilization

» Voice Mobility Introduces New OCTel Migration Solution

» SecureLogix Intros VoIP Security Assessment Tool Suite

» Chicago Business VoIP Launches New Service

Huge news out of Astricon 2008 -- Skype and Digium will begin to collaborate. I will have more details soon but for now this likely means easy integration between phone systems based on Asterisk and the Skype network. I have talked about Skype trunking before -- this news will likely mean that there will be native Skype trunking in all Asterisk boxes.

This could potentially give these open source platforms a huge advantage over companies like Cisco, Avaya, Nortel, Etc where an external Skype trunking gateway will be needed to communicate with the Skype community.

This can be huge news for telecom markets as the price to make calls will drop substantially from Skype devices and software to Asterisk-based open-source PBXs.

One other point -- the Skype gateway market may now become based on Asterisk appliances/software. This means we could see more interoperability between the Skype network and SIP and other standards.

Update:

My theories were accurate. You will now be able to treat Skype calls like any other protocol on Asterisk systems. What this means is you can forward them, transfer them and make and receive Skype calls on Asterisk phone systems.

With Skype For Asterisk, customers will be able to get access to many of the Skype features coupled with the capabilities of Asterisk. For example, the beta version of Skype For Asterisk will allow customers to make, receive and transfer Skype calls from within Asterisk systems using their existing hardware; enable inbound calling solutions like free click-to-call from company websites or virtual offices; and manage Skype calls using Asterisk applications such as call routing, conferencing, phone menus and voicemail.

What this means to Skype is the company has finally found a way to get into the enterprise in an easy way -- partnering with Digium/Asterisk which has great traction with developers, resellers, carriers, SMBs and more. Expect more enterprise use of Skype and as this happens, Skype should see more revenue from business users.

For Digium, this partnership allows the company to leapfrog the larger telecom players and gives the company major momentum and also makes them a magnet for more leading-edge deals. I wouldn't be surprised if Microsoft approaches the company for a UC partnership soon if they aren't talking already.

For the communications community this collaboration means more flexibility and lower cost calling for consumers and businesses worldwide. Finally, Skype users should be able to call companies over native Skype and for free. This news could become a major game changer if companies integrate Skype click-to-call functionality on their websites.

Further Update:

In a call with Digium CEO Danny Windham and Stefan Öberg, vice president and general manager for Skype Telecom and Skype for Business, Caller-ID will work with a Skype In number and if you choose you can set your mobile number as your Caller-ID number. This is subject to SMS verification over a few day period.

The companies envision a Skype client running on a desktop with a mirrored desk phone utilizing a Skype name. Although configuration options are flexible, this would allow both phones to ring together.

Any call type can be connected to the Skype client. This means you could get a call over the PSTN or a SIP trunking connection and this call will be answerable on your desk phone and Skype client.

Asterisk version 1.4 and 1.6 and beyond should be compatible with the Skype Connector for Asterisk but prior versions will likely not be. Derivatives of these products should work as well. Resellers should have a tremendous retrofit market to go after.

Businesses can assign Skype Names to Asterisk calling queues allowing a company to give customers a service Skype ID, a sales Skype ID, etc. This allows Skype to become a company's global 800 number. Moreover, agents can log in via Skype and be connected from anywhere to a calling queue.

After a limited beta, Skype for Asterisk will be rolled out into a wider beta and finally a public product. The commercial product will support Skype presence but there is no release date for this product as of yet. In addition, it will eventually support video and every other Skype feature.

Skype chose to work with Digium instead of other PBX companies because both companies support affordable communications solutions. Skype's Öberg feels the companies have a great deal in common.

Skype appliances allowing things like Skype trunking are not scalable according to Öberg and this partnership should allow Asterisk to be a good choice for companies looking for large scale Skype trunking/connectivity. This is because the native Linux Skype client which these boxes are based was not designed for scalability.

Carriers may be able to take advantage of this collaboration -- and in fact some carriers have allowed their wireless customers to connect seamlessly with Skype. Still, Öberg reminds us the target of this collaboration is the small business.

Once the Skype for Asterisk module is installed, unlimited calls to Skype names can be made. To call a phone number via Skype you will be able to use Skype credits. There will be business packages allowing premium support which will include chat and voice.

LCR (least cost routing) will now include Skype -- allowing a  system to utilize Skype as a way to connect a phone call if the price is lowest.

Skype devices such as standalone Skype phones cannot transfer calls and thus cannot connect to Asterisk like a typical Skype client.

In addition, the Skype Connector does allow clients to be associated with a company and managed centrally.

You can assign Skype names to numbers allowing easy access to a phone directory of Skype names.

In short, this collaboration is unprecedented and brings the flexibility of the open-source Asterisk platform together with the size of the massive Skype user base. Now things like global 800 numbers are possible for free for companies and consumers.

Going forward, we may see Skype support as a must-have feature in the PBX/communications server wars. I am sure the industry is watching closely to see how much traction there is in the Skype integration market.