Communications and Technology Blog - Tehrani.com - Skype Archives

Pirated Music, From Napster to Kazaa and Now VPNs

2012-05-02T23:58:37Z

I was at a conference some years back where one of the panels discussed how VoIP was blocked unsuccessfully in country after country. The point the speaker made was you can't stop IP. Users and developers are always one step ahead, masking their packets in ways (HTTP, etc) which gets through firewalls and other systems designed to thwart such communications.

I remember something similar happening when Airlines provided WiFi for the first time and blocked VoIP yet Andy Abramson found a way through.

So it should come as no surprise that music sharing which started with Napster, moved onto other services like Kazaa, Pirate Bay and has now evolved to use VPNs.

Now the challenge for record labels and others looking to determine who is sharing and what has grown substantially. The downside? Well as the BBC points out, VPNs cost users 5-6 pounds per month in the UK making file sharing a more expensive proposition.

Still, when you have a motivated audience with plenty of free time on their hands thanks to record unemployment in much of Europe and the US - it seems there are no lengths they won't go through to share music for free.

Is Skype Microsoft's Only Chance for Mobile Success?

2012-04-26T17:33:59Z

If you are looking for increased competition in the mobile space, Apple’s recent and seemingly constant record earnings are bad news. Worse yet for the competition, Apple has transcended its original position of a computer and electronics maker to become a major force in the publicly traded markets and even the US economy. Its phones are status symbols the world over and its tablet is so far ahead of the rest of the market the company can charge hundreds more and consumers will pay for these products with a smile.

So news of Microsoft losing share to in the mobile space should hardly be considered news. In fact even if the company purchased Nokia and RIM the challenge of integration would far outweigh the benefits. Sadly this would be true if both companies were given to Redmond at no charge. How bad is the situation? Well between December 2006 and December 2011 the Microsoft went from having 34% of the US market for smartphones to a paltry 5%! And all this while the smartphone market in the US has been exploding with growth.

Microsoft knows how bad things are. Sadly, they were way ahead in mobile – I used to rely on the HTC/UT Starcom Verizon XV6700 and called it the near-perfect device in March of 2006. It deserved this designation because it was truly a mobile office in your pocket.

I complained at the time that different carriers selling the same device were calling it something else and moreover there was really no branding for the device at all.

I think this phone may have been the last opportunity Microsoft needed to exploit to stay a mobile leader.

Sure, they have the relationship with Nokia but it will be a really tough sell to unseat Apple and Android at this point – unless something dramatic and unforeseen (by others) happens like Android or iOS exhibiting a massive security flaw driving users into the hands of the competition.

But Microsoft still has Skype as its last hope to attain some relevance in the smartphone space. If the software company is serious about the market and we all know they have to be, there will have to be serious handset subsidization. Even then, it is unclear it will be significant player in the market.

But a simple way to subsidize is by bundling Skype credits with phones – there is a huge arbitrage play here between what carriers charge for their voice minute bundles compared to what Skype charges.

To offset some of the cost, Microsoft will have to show ads which could be powered by Bing.

The challenge of course is voice calls are becoming less important each year as consumers use social and text as their preferred method of communications.

But the window is still open for Skype phone which is subsidized heavily – one which consumers would have to consider because the price is so low. Of course the challenge here is carriers like Verizon provide a number of phones for free with a contract such as the LG Enlighten and the Samsung Illusion. So Microsoft would have to potentially give you a free phone as well as unlimited calling or some number of minutes per month, etc. Also this strategy assumes carriers won’t mind Skype becoming the keeper of the carrier relationship. Sure, many wireless providers have partnered with Skype in the past but it is unclear if they are still happy to do so.

In short, Skype may be the last chance for Microsoft to become successful in mobile – and in the US, the subsidized approach to providing phones and service may make it very difficult to find success. Skype integration may be a better option in other countries where devices are generally purchased on their own.

I don’t want to come off as optimistic mind you – this strategy will be expensive and basically bribes consumers to take a product they don’t want. It’s worth pointing out a similar strategy in the past used by Bing to gain share from Google was a failure. But mobile is so important, the company may be forced to give the idea a shot – and if so they better start soon.

Skype may not be the only hope as Microsoft also owns a significant portion of Facebook - tight integration with this social network may be another option for Redmond to attack mobile. But it is unclear that Facebook would be willing to work exclusively or even semi-exclusively with a platform which has limited appeal - unless the price is really right.

Microsoft Working on Skype Everywhere Initiative

2012-04-20T12:37:01Z

The fact that Microsoft would want to integrate Skype everywhere shouldn't be too surprising, Office/Lync and Windows Phone are obvious areas and so is Xbox. That's why news of the company looking for engineers who can delve into the hybrid world of video games and IP communications shouldn't be too surprising.

When Microsoft integrates Skype into Xbox and bundles some free calling into the solution, what's to stop them from offering a DECT phone as well? With retail prices of DECT 6.0 phones starting at less than $20, the idea makes more and more sense.

Sure, you can use a cordless/wireless phone with Skype today but if Microsoft integrates it all seamlessly and video is added for free, what happens to the business models of Ooma, netTALK and magicJack?

And what about the cable companies, AT&T and Verizon? Sure, a Skype home phone calling solution will be inferior as it doesn't allow emergency calling due to a lack of E-911 support but still, if it is part of a bundle and has HD voice support, why pay for phone company or cable calling? Especially if it has video as well and other great Skype calling features, presence, etc.

Additionally, a benefit of the Skype purchase will be potentially becoming the phone provider for hundreds of millions of consumers. Of course Skype already has hundreds of millions of users but when I say "phone" I mean the actual physical phone, not the computer to computer experience.

Moreover, if Microsoft is successful, it will be achieving what Cisco couldn't with Umi. And remember, one of the reasons I said Umi wouldn't make it was because of Xbox Kinect. I also mentioned Skype's deal with Panasonic, Sony and others as another reason. It would be ironic if Skype and Xbox together were to fulfill the market niche Umi was looking to exploit.

The challenge for Microsoft is the tablet market - which today means iPad, is eating the video game space. So the next version of Xbox better have some really compelling features to draw the gamers back. I would think they believe tight Skype integration will be one of these features.

The 7 Wireless Data Cap Losers

2012-03-06T23:08:46Z

We are in uncharted territory when it comes to mobility as this year we will see a slew of productivity-boosting 4G, quad-core smartphones like the Ascend 4D Quad from Huawei which I saw at Mobile World Congress 2012 in Barcelona, Spain. Moreover, while devices get more powerful, we will only want to do more with them and quite often this means relying on wireless networks from carriers.

The only problem is these providers are rapidly running out of bandwidth and this means they have decided the best course of action is to cap users and slow their connections once they hit a certain threshold. Their other strategy is to just charge for bandwidth being used.

This latter method of charging will eventually lead to data use bill shock. This means we can expect to see the viral spreading of news related to parents being faced with a $5,000 bill because their child viewed 2,000 YouTube videos in a month.

There is nothing worse than that nail-biting feeling you get when you try to end that important video call before your carrier starts to throttle your bandwidth

So without further ado, here are the top 7 losers who will be hurt by wireless bandwidth caps:

Cloud vendors – all of them. Regardless of business model, you will soon start to lose one of the fastest growing markets you have – mobile users. The carriers will tell you that a small fraction of users are hogging most of the bandwidth but that just may be because the majority of users have slower devices and/or haven’t discovered the really bandwidth hungry apps which they will rely on in the future. And we know that most users aren’t on 4G yet – when they do migrate they will use more data, more quickly. You want me to name names of companies who will be hurt? OK, Amazon EC2 – as so many other services rely on the leading ecommerce and cloud hosting site as well as Dropbox and of course iCloud.
Desktop sharing companies like OnLive Desktop, GoToMeeting, LogMeIn, etc. Much of the appeal of using these service has to do with working remotely and having the full functionality of being in the office. To some degree, these services actually minimize bandwidth use because if you download a huge photo and view it – you only see a compressed rendering of the photo on your tablets screen. This of course will all change because as screens get more resolution, the amount of bandwidth use will grow.
Video Streaming companies such as Hulu, YouTube and Netflix are obvious casualties – and as more tablets are sold, the problem gets bigger. And yes, video is a huge bandwidth hog.
Audio Streaming Companies like Pandora, Spotify, etc. Sure audio consumes less bandwidth than video but with streaming radio – users have a tendency to just set it and forget it.
Social networking sites to some degree have an issue but for many functions such as tweeting and/or posting status updates which don’t include video, limited bandwidth shouldn’t be an issue. But one has to wonder about how the ecosystem of apps which enrich social networks – let’s say Twitpic for example could feel a slight pinch because users may be afraid to do anything which bandwidth-hungry because they may exceed their monthly allotment of bits. Graphics-rich Pinterest may see some pain as well.
Apple could potentially have a problem as well but the company does seem to be immune to most challenges which should hurt it like the advent of $199 tablets. The challenge for Apple is newer devices tend to have advancements screen resolution – in fact the next iPad is rumored to be called the HD, not the iPad 3. Guess what? All those pixels need to be filled with information and the more pixels you have, the more bandwidth you suck. The same is of course true for Google, Motorola, Samsung, HTC and the rest of the market. Smartphones aren’t immune to this problem either so a Samsung Galaxy Note just went from a device which can straddle the smartphone/tablet market to one which could cause users to go over their data plans more quickly.
Finally, corporations have the most to lose as they purchase all these fancy tech tools for their workers with the expectation of ROI which is usually calculated based on stable metrics. And now users are going to be in a situation where at a certain point, their telepresence calls start to have jitter and latency because they are over their bit allotment for the month. And the issue will be difficult to predict in advance as a Slingbox user could eat up a month’s worth of bandwidth in a week or even a few days.

In short, bandwidth caps may cause great pain for users over time and wireless carriers should be very careful as their policy changes begin to change end-user behavior.

Cisco Underestimated Skype's Value. Acts against Microsoft Acquisition

2012-02-15T21:35:30Z

Cisco is far from the most open company in tech so it is ironic it is concerned about a monopoly over video conferencing a result of the Microsoft acquisition of Skype. The company’s Martin De Beer said, “For the sake of customers, the industry recognizes the need for ubiquitous unified communications interoperability, particularly between Microsoft/Skype and Cisco products, as well as products from other unified communications innovators.” This statement coincided with Cisco challenging an EU court over the acquisition.

One has to wonder however if Cisco underestimated Skype’s value. After all, the company has been sold twice in the last few years and the networking company didn’t close the deal either time.

The thesis that Cisco did not realize Skype’s importance is backed up by Cisco’s other actions – launching its consumer video service Umi - a Skype competitor. As you may recall I immediately said this service would fail and backed it up with ten reasons.

Here are the first three as a reminder - #1 is the most important for now:

1) Skype. Elaboration would be talking (writing) down to you.
2) Cisco's solution at $599 for the equipment and $24.99 per month is insane for a new consumer technology which has little to no network effect related to Metcalfe's Law. Oh and you need 3.5 Mbps upload speed for 1080p calls - meaning higher broadband bills for some.
3) Facetime: Apple's FaceTime is free and even though at the recent ITEXPO many people commented that using the software on an iPhone 4 is not great because inevitably your hand gets tired and falls to your stomach causing a nose-hair view of yourself to be transmitted - we can expect Apple to Facetime-enable everything they sell. Will Umi interoperate? If not, how will it compete?

And yes, the service failed shortly thereafter.

What is Cisco’s stance on video openness? In October of last year, the company responded to critics regarding its somewhat closed video ecosystem and decided to become more open. But this was five years into selling their telepresence products.

If anything, Cisco has been one of the more closed vendors in the market.

Remember what happened when Cisco announced it would buy Tandberg? Well, Stefan Karapetkov, Emerging Technologies Director for Polycom said the following:

Cisco announced today that they will acquire Tandberg, and this will have significant impact on the video communications market. It will reduce competition, and limit customers' choices, especially in the telepresence space. It will, hurt Radvision who now fills the gap in Cisco's video infrastructure portfolio.

I am however more concerned about the standards-compliance that have been the pillar of the video communication industry for years. Tandberg and Polycom worked together in international standardization bodies such as ITU-T and in industry consortiums such as IMTC to define standard mechanisms for video systems to communicate.

Cisco on the other hand is less interested in standards, and considers proprietary extensions as a way to gain competitive advantage. The concern of the video communication industry right now should be that the combined company will be so heavily dominated by Cisco that standards will become last priority, far after integrating Tandberg products with Cisco Call Manager and WebEx.

Telling is the fact that both Tandberg and Cisco declined participating in interoperability events over the last few months.

But this doesn’t mean Cisco hasn’t done the correct things for its shareholders by being more closed than most other companies. After all, if you are a dominant provider of a solution you aren’t required to open up your product unless a government forces you to. And this is why Cisco has inserted itself into the regulatory approval in Europe of the acquisition of Skype by Microsoft. De Beer continued, “Cisco does not oppose the merger, but believes the European Commission should have placed conditions that would ensure greater standards-based interoperability, to avoid any one company from being able to seek to control the future of video communications.”

And this is the challenge Cisco faces. Last week, Microsoft had a Lync Pavilion at ITEXPO in Miami and it was mobbed – lots of attention and buying – and it will expand in ITEXPO in Austin, Texas. And this was before Skype integration. Based on what I saw, enterprise buyers and resellers want UC solutions from Redmond.

Cisco will no doubt lose more share to Microsoft in the enterprise – this seems to be a given. But when FaceTime is a fast-growing competitor and is very closed, do we need to force Skype and Microsoft to open? In fact, in five years I predict Cisco having to worry more about Apple in the enterprise than Microsoft and Skype. And good luck getting Apple to open up.

It seems Cisco grossly underestimated Skype’s value and importance. The company had been burned by failed consumer product company purchase after purchase and didn’t want another mistake. This makes sense. But by the same token, Microsoft is facing a titanic battle with Apple and needs any advantage it can get. And this doesn’t even take into account the damage done by Google in the mobile and other spaces.

In a free market – companies should be able to make the decisions they think make the most sense for themselves and shareholders. I believe it would be an error to force Microsoft/Skype to open up.

Moreover, with the pace of IT consumerization is speeding up, Cisco will no doubt be playing a very difficult game of making purchases of pure B2B companies while having to understand which B2C companies are indeed crucial in the B2B world as well.

Grandstream Launches new ATAs at ITEXPO Miami 2012

2012-02-14T22:28:18Z

Recently at ITEXPO East 2012 in Miami, Grandstream announced a new family of ATAs – an addition which shows the company is becoming a more complete player in the IP communications space. It has been a great journey watching Grandstream start with IP phones then evolve to an IP PBX and IP cameras. In fact they announced their new GXV3500 camera at the show. While the company started out making products which were sold based on low price they have gone upmarket to some degree with new offerings.

TMC’s Stefanie Mosca Interviews Grandstream’s Jorge Otero above at ITEXPO East Miami 2012.

According to Jorge we will see 3-4 new products in the IP surveillance space released this year.

Need a New Car? Win a Mustang at ITEXPO in Miami Next Week

2012-01-27T15:48:11Z

I think I may have one of the best jobs in the world. I admit it is a bit ADHD-inducing as I get involved in lots of areas from new media to the latest technologies in the market as I run this major media company which is TMC. Not only do I get help influence tens of millions of people online I also get to host live events where I meet many of the readers who frequent my blog and TMCnet - the main web portal of TMC where I am CEO.

But the most exciting part of my job comes twice a year when I give away a car to an unsuspecting attendee at ITEXPO. Next week - Friday Feb 3rd at 1:45 pm at the Miami Beach Convention Center, I get to give the next car away and it will be a Ford Mustang. In order to be eligible to win you need to pick up a card at registration and get it stamped by all the sponsors of the car giveaway.

Thank you sponsors for making these giveaways possible. If I were an attendee at a show I would want a mix of solid education, a chance to network with peers, see the leading exhibitors in the space but also to have some fun and that is what events like our various receptions and giveaways are supposed to provide.

The TMC team and I look forward to hosting you next week. Thank you all in advance for coming to our event and hats off to the TMC team who is managing not only ITEXPO but a host of collocated and unparallelled events such as Super WiFi Summit, MSP World, our SUITS technology patents event, M2M Evolution, Mobile LATAM, HTML5 Summit, Cloud Communications Expo, The Channel Vision Expo (CVx), Business Video, Asterisk 123, 4GWE, StartupCamp5, Avaya Tech on Tap, the Blackberry Hackathon, SIP trunking workshop, business development workshop, telecom reseller week, to name a few.

http://itexpo.tmcnet.com/sip-trunking-workshop/miami/

ITEXPO East 2012 Miami Schedule

2012-01-25T20:49:34Z

One of the most frequent question I get regarding TMC’s ITEXPO which takes place next week in Miami – is with all that is going on – how do you make a decision as to which parts of the show to attend. Truth be told I believe the event and its collocated conferences and educational sessions rivals just about any other tech show in terms of education.

Some of the hot topics to be discussed include not only general communications and technology but 4G wireless, mobility, Asterisk, open source, business video, the channel, cloud computing and communications, HTML5, Mobile Latin America communications, M2M, technology patents, the MSP market, Super WiFi/white spaces and much more.

The following is a list of important details you will need to help navigate ITEXPO East 2012 Miami. I warn you – this is a subset of what is happening. To keep you posted on not only these items but other important events at the show please follow @itexpo on Twitter and turn on mobile notifications – it is pretty simple – just follow the menu below. Twitter also allows you to turn off notifications at certain hours in its settings tab.

Also, please download the show directory/guide (PDF) and read through it before you get there to get the most out of the event.

ITEXPO East 2012

January 31 - February 3, 2012

Miami Beach Convention Center

If you are staying at the Loews in Miami or a hotel nearby the best route to walk is down 16^th street making a right on Washington after a block. Most concierge personnel will tell you to walk down Collins which is longer and if the sun is strong may be a bit uncomfortable.

View Larger Map

Registration counters are located in the Hall B Lobby. This is the section of the convention center on Washington Blvd., closest to the show hotels.

When you arrive, proceed to the registration counter to receive your badge. You will need a photo ID.

SHOW HOURS

Tuesday, January 31

Registration: 7:30am – 5:00pm
Workshops begin at 9:00am
POST POTS Special Sessions: 2:00pm
Avaya Tech on Tap: 5:00pm

Wednesday, February 1

Registration: 7:00am – 7:00pm
Workshops/Sessions begin at 9:00am
Free Keynotes: 12:45pm; 3:30pm
Exhibits Open: 4:30-7:30pm
Free Networking Reception: 5:30-7:30 on expo floor - Sponsored by Broadvox.

Thursday, February 2

Registration: 7:00am – 4:00pm
Workshops/Sessions begin at 9:00am
Free Keynotes: 9:00-11:00am
Exhibits Open: 11:00am – 4:00pm
Networking Reception: 4:00pm
StartupCamp5, featuring keynote by Terry Matthews: 4:45pm
ITEXPO Party on South Beach - Mangos Tropical Cafe: 9:00pm

Friday, February 3

Registration: 7:30am – 2:00pm
Workshops/Sessions begin at 9:00am
Exhibits Open: 11:00am – 2:00pm
New Mustang Giveaway at 1:45pm – Must Be Present to Win

Updated schedule. Visit the show site for additional details

Keynotes and Special Sessions Schedule: (Open to all attendees)

Tuesday, January 31:

2:00 pm: Special Panel Session:

Post POTS Net Neutrality & the Cloud: From POTS to PANS

============================================================

Rumors of the death of POTS are not exaggerated. To build a new model for the future we have to determine the bottlenecks. Come discuss the impact of the cloud and the migration from end to end to any to any services; about supporting access and quality of service; about Net Neutrality and Privacy.

5:00: Avaya Tech on Tap Workshop and Networking Reception

=========================================================

Kick off ITEXPO East with a special pre-conference seminar and evening networking event, hosted by the Avaya DevConnect Program. Join Avaya and our special keynote speaker Judith Hurwitz, co-author of "Cloud Computing for Dummies", as we tackle some of the most challenging technology transitions facing IT organizations today, namely cloud computing and collaboration enablement.

KEYNOTES Wednesday, February 1:

12:45pm: Michael Rouleau, tw telecom
3:30pm: Paget Alves, Sprint
4:30pm: Timothy Wagner, Samsung Telecommunications America

KEYNOTES Thursday, February 2:

9:00am: Rick Whitt, Google
9:30am: Chris Swearingen, Senseaware, Powered by FedEx
10:00am: Dirk Gates, Xirrus
10:30pm: Julius Knapp, FCC
4:45pm: Sir Terry Matthews, Wesley Clover

WORKSHOPS at ITEXPO – Open to All Attendees

Cloud Business Development Workshop

Tuesday, January 31 - 9:00am

Larry Dillon and Michael Curry will co-host the first ever pre-show workshops focused towards new business development techniques for resellers, developers and cloud-based service providers.

Asterisk 123 Training

Tuesday, January 31 - 9:00am

Come get a well-rounded and informative introduction to the Asterisk Project. All are Welcome! Whether you are managing a team deploying an Asterisk implementation, evaluating potential replacements for a legacy telephony solution that's on its last leg, or just a general Asterisk "newbie" excited to learn what Asterisk is capable of, then this talk has something to offer you.

Sangoma Vega Training

Tuesday, January 31 - 9:00am

Sangoma Technologies will host a free full day hands-on training session teaching you how to configure and troubleshoot the Vega series gateways for use with IP-PBX and SIP trunking.

Blackberry HTML5 Hackathon

Tuesday, January 31 - 9:00am

Join us at the upcoming HTML5 Hackathon to discover how BlackBerry WebWorks takes HTML5 beyond the browser. We'll show you the power and simplicity of the new BlackBerry browser

Ingate’s SIP Trunking Workshop

Wednesday, February 1 – Friday, February 3

Attendees can earn a SIP Trunking Professional Certificate by participating in the Professional Development Program on February 1. Attendees can also earn a Unified Communications Professional Certificate on February 2.

Telecom Reseller Week Presentation Theatre

Wednesday, February 1 – Friday, February 3

Telecom Reseller Week provides you with a forum for you to learn about cutting edge new solutions you can represent, to meet with many new potential partners, and to study proven sales techniques to help improve your team's performance.

MPLS University

Tuesday, February 2 - 1:30pm

MPLS University is a forum for IT and business professionals to bring their questions about network reliability, always-on connectivity, voice, regulatory requirements, security, and cost control. Join us for two FREE live MPLS University sessions at ITEXPO to learn more about utilizing cloud-based solutions

StartupCamp5: Comms Edition

Tuesday, February 2 - 4:00pm

Featuring keynote address by Sir Terry Matthews

The incredibly popular StartupCamp networking event returns. This unique forum is for early-stage entrepreneurs to pitch their communications products or services to a discriminating audience of potential investors, media, bloggers and industry influencers. The event's fast-paced, "ready, set, pitch" format brings early-stage communications companies, developers, industry leaders and investors together to network and validate entrepreneurial pitches in real time.

4:00: StartupCamp5 Free Networking Reception

4:45: Introduction/Event Kickoff by Larry Lisser

5:00: Keynote Presentation by World-Renowned Entrepreneur Sir Terry Matthews

5:45: Startup Presentations and Judging

7:00: Networking and Voting

QUESTIONS?

Contact Frank Coppola (203.852.6800 x 131)

Thank you sponsors

Diamond Sponsor:

Digium

Platinum Sponsors:

AudioCodes
Sonus Networks
Sansay
Dialogic
Interactive Intelligence
Netxusa

Gold Sponsors:

abp
Adtran
Broadvox
MegaPath
USAN
888VoIP
Panasonic
snom
tw telecom
Sangoma

I really look forward to seeing you all at the show – it will be fantastic.

Update: My marketing team has a fancier version of this document which they send in emails after you register. It has web links and may be easier on the eyes.

Trends and Surprises Regarding Google's 2011 Advertisers

2012-01-25T14:16:05Z

Google’s 2011 revenues were $37.9 billion last year and 96% of that money came from ads. Now I know what you are thinking. Where is all that money coming from? Well thankfully, the people at Wired put together an infographic that explains it all. Here are some highlights – a piece of the infographic and a link for the full graphic.

Finance and insurance totaled at $4B while retail and general merchandise was $2.8B and travel and tourism came in at $2.4B. Computers and consumer electronics came in at $2B.

Regarding individual companies the leading web retailer Amazon spent $55.3M followed by eBay at $42.8M and Macy’s at $35.6M.

On the education front, University of Phoenix spent $46.9M while ITT spent $29.9M.

On the telecom front AT&T was the leader at $40.8M while Verizon followed up at $22.9M. Go Daddy on the domain name front came in at $21.7M.

Another bit of information which is interesting has to do with the price per click for some of the top keywords. For example “Self-employed health insurance” costs a whopping $43.39 per click – that tells you a bit about how profitable that business is. A good basis for comparison may be “Barbie doll” which costs $1.30. It is worth mentioning that a typical Barbie Doll costs about $15-$20 meaning Google takes 5% or more of the total cost for this item - not for a sale but just a click.

Another highly priced term is “online video conferencing software” at $35.53. Seems like a lot of money but software is high-margin so this isn’t too surprising. I did a search on the term and the advertisers at the top were Nefsis, Arkadin, Gotomeeting, fuzebox, Cisco, Webex and Siemens Enterprise.

Perhaps most surprising is the term “custom business cards” which costs $13.83 per click. Since not all the people who click a link purchase it should come as a surprise that the company Vistaprint says in its ad that they will sell you 250 business cards for $10. To me the math doesn’t add up. – Perhaps they make it up in volume . I really hope so because Vistaprint spent $26.9M on Google last year.

The data clearly reminds us of something which may be forgotten – Google is not so much a tech company as a company which is feeding off of budgets which used to be dedicated to direct mail, coupons and newspaper circulars. Many of the companies spending the most money also spend a lot on billboard and TV advertising making Google just another mainstream outlet but with obviously increased measurability.

Going forward we can expect Google to try to push more of these advertisers from search click ads to YouTube – this is happening already but with Google’s recent announcement that they server 4B videos per day there is a massive amount of inventory to sell ads on. This is a natural progression for the company and explains why they have invested in new custom content video channels.

Despite Outages, Verizon Has Record Quarter

2012-01-24T15:09:21Z

Months back Verizon sent me a 4G personal hotspot to review and I confess it is one of the most important pieces of technology I have. For example just yesterday I was at a lunch meeting for an extended period of time – and I had an iPad and keyboard with me. The Optimum WiFi network was not working well. AT&T was also having problems for whatever reason – it was very slow. I cranked up the Verizon hotspot and was able to work at lightening speeds.

But as high profile as Verizon has been with the roll out of its 4G network it has also had record outages this past month. In fact some of my initial testing was disrupted by the outages – causing me productivity as I rebooted the card frequently thinking there was a hardware issue.

But it seems these challenges didn’t have a major impact on the company because Verizon just reported record revenue growth in the fourth quarter which was fueled not only by Wireless but FiOS and professional services.

Since Verizon Wireless has a reputation for having a great network it is likely the company shook off the outages and consumers and businesses determined this was a freak series of occurrences that likely won’t repeat. Verizon certainly has to be careful to not have any more outages in the foreseeable future as it depends on the superiority of its network in the minds of its customers to enable it to charge high prices for broadband and other access.

How great was wireless growth? Revenue for the company in Q4 was $18.3B up 13% YoY while data revenue was $6.3B up $19.2%. The company also boasted it had the largest number of net retail additions in three years – no doubt due not only to the iPhone but the slew of new devices the company has rolled out lately. But before we get to gadgets, the number of additions was 1.5M including 1.2M postpaid and the company now has 108.7M total connections and 92.2M retail customers.

The real strength here is in the retail postpaid data ARPU which is up a staggering 14.3%. The good news for the company is consumers are hooked on bandwidth-hungry applications such as streaming audio and video as well as Skype. As long as AT&T gives Verizon cover by raising prices, both companies will be able to charge on a metered basis meaning consumers will have to continue spending more on data.

And I can guarantee that most customers don’t realize that at 4G speeds you can hit your bandwidth caps much much faster than on 3G.

The company also introduced six new 4G LTE devices last quarter: the Droid Razr by Motorola; the Samsung Stratosphere; the HTC Rezound; the Galaxy Nexus by Samsung; and Droid Xyboard tablets in 10.1-inch and 8-inch varieties. Earlier this month, VZW further announced that six additional 4G LTE devices would be available soon, including two mobile hotspots, (the company now calls them Jetpacks) from ZTE and Novatel; three smartphones – the Droid 4 and Droid Razr Maxx from Motorola, and the Spectrum from LG, which launched last week; and the Samsung Galaxy Tab 7.7.

In its statement the company reminded us of its purchase of AWS licenses from SpecrumCo – a JV of Comcast, Time Warner, Bright House Networks and Cox TMI Wireless. This deal is subject to regulatory approval and my feeling is regulators will be very skeptical of the deal as it is essentially an asset purchase with a condition that each company won’t compete in each other’s markets. It seems highly anti-consumer to me.

The good news is 4G is booming, wireless device growth is staggering and competition – at least from device companies is very alive and well. Businesses and consumers for their part obviously place high value on 4G and wireless in general – how else do you explain the massive growth in connections as well as ARPU? All this in a depressed economy where the real unemployment and underemployment rate is said to be as high as 18%!

Imagine what the growth of Verizon will be in a healthier business climate.

One looming challenge of course is the strain on the 4G network. My testing of Verizon Wireless and the same is true for any wireless carrier shows speeds vary widely moment to moment. If you get enough Netflix subscribers to simultaneously watch TV in one area of the country you are going to kill the tower’s bandwidth and subsequently everyone suffers.

And this is in-part the reason the wireless companies have to be very careful with pricing – they need to ensure they can afford to upgrade their networks but also not make their pricing terms so onerous that they kill the golden ARPU-increasing egg laying goose.

To learn more about 4G wireless technologies be sure to attend the 4GWE Conference, collocated with TMC’s ITEXPO East 2012 taking place Jan. 31-Feb. 3 2012, in Miami, FL. Co-sponsored by TMC (News - Alert) where I am CEO.

Can Incumbent Companies be Disruptors?

2012-01-14T10:30:41Z

Business disruption through technologies they never saw coming is fascinating to me. I have been fortunate enough to be in the technology and communications spaces at a time when the pace of change has been breathtaking.

Consider for example in the 1980s when Rockwell one of the leading ACD manufacturers collaborated with IBM to enable computer-telephony integration or CTI. As a point of reference an ACD is an automatic call distributor and is the machine that asks you to press one if you are calling about domestic travel and so on. Now the reason CTI was important had to do with the ability to pull customer data from a contact management database so the call center worker knew who was calling in advance of the call. And these systems were far from cheap – they cost millions and Rockwell and IBM had a nice revenue stream because call centers could justify these huge bills because they reduced the amount of time agents spent on the phone as data entry time was minimized.

But less than ten years later Microsoft and Novell the leading OS vendors at the time decided they would telephony-enable their operating systems through protocols named TAPI and TSAPI allowing an off the shelf server to do CTI.

In less than a decade customers benefitted not only from Moore’s Law which reduced prices dramatically but from a shift from proprietary to open systems. Rockwell’s leadership position which they held for more than a decade was gone overnight. And although the company tried to be competitive by launching a PC-based phone system, they were never able to overcome changing market forces.

Interestingly Rockwell’s pain was Dialogic’s gain as the company made DSP resource boards the essential components allowing communications systems to be integrated into servers and PCs. These high-margin boards sold like hotcakes in the nineties as companies used them to build all sorts of solutions such as of course ACDs and international call back systems – where an international caller would make a call to the US and hang up after the first ring. At that point a US originated call was made enabling the caller to connect to their party at much lower US rates.

Then one day an Israeli company VocalTec decided to take these DSP resource boards and use them to construct VoIP gateways and this development took the communications market into uncharted territory as Intel saw all the ruckus and decided they needed Dialogic and went out and purchased them. The theory was DSP resource board technology could be integrated into the CPU.

Along the same lines HMP or host media processing was born allowing the processor in the server to do the job once only made possible by a standalone board packed with DSPs. Moore’s Law as you know is a powerful force and eventually multicore CPUs made short work of large-scale VoIP.

So we took a sophisticated hardware problem and turned them into software. Whenever that happens we generally know margins erode quickly. After all if a college kid can make a social network in his dorm room that about a trillion people are using – anything and I mean anything can be done with software with far less resources than hardware.

So we went from DSP resource boards for computer telephony which eventually enabled IP-telephony to IP telephony running on processors which eventually led to Skype.

Let’s summarize what happened here. Open systems helped decimate the margins in proprietary ACD market and Dialogic benefitted. Then Moore’s Law coupled with VoIP helped reduce the need for dedicated boards. Skye for its part made VoIP easy and became a multibillion dollar success.

The question is whether or not a rapidly evolving tech environment is one in which old leaders can remain at the top of the pack in the new world. Microsoft for example made serious inroads into the mobile phone space yet Google and Apple annihilated it there in short order. On the other hand, it is still trying to compete with its Bing search offering and yesterday in fact the blogs were abuzz with important people in the blogosphere saying they will switch from Google to Bing.

Bing is by no means a serious threat to Google but at least Microsoft is in the search game as a result of this offering and over time Bing could become a player in a market where Google is currently a monopoly.

It is my belief that corporate culture and marketing myopia contributes to the death of companies at the hands of disruption. In this piece on TMCnet the author goes on to describe how the “dictatorship of the customer” leads to corporate death. Moreover companies no comprehending how broad a market they are in face death. In other words railroads are in the transportation business not trains. There is a big difference.

For example Kodak saw years back that it was going to have to have an online photo service to offset its declining film revenue. It purchased Ofoto and really didn’t make it a much better platform. It didn’t expand it into a video sharing service for example. It could have developed YouTube and Facebook combined if it had the vision to see that photo sharing was just the beginning. But to Kodak its core business and culture was all about making money from the printing of photos not advertising supported content storage.

Moreover as Kodak began to expand into the online photo realm its retailers such as the pharmacies started to revolt as they now saw the photo processing company as a competitor.

Disruption is fun but its results on an industry are brutal.

Moreover in technology the disruption comes from everywhere. Tablets are hurting PC sales and more or less killed the netbook market. At CES this week the Samsung Galaxy Note turned out to be a killer product merging the best of a tablet and phone into a single device. Basically it takes two market segments revolutionized by Apple and disrupts them both with a “tweener” device.

I’d like to add that it is insanely difficult to predict the next big thing and even when you do timing is even more of a challenge. The first wave of VoIP companies perished, likewise the first laptop company died and the first successful social network was sold for less than $40M recently.

But there is an opportunity for executives to become more strategic in their thinking. After all, a laser like focus on customer satisfaction didn’t help the Wang Company when the PC was invented. On the flipside the tablet could have killed the Kindle but Amazon came out with a Kindle Fire and sells it at a loss allowing it to retain control of the book market and expand into new spaces.

Let’s be a bit more specific. Are newspapers in the business of selling ads or ensuring that advertisers get the best ROI on their investments? Seems to me they are in the business of connecting buyers and sellers – yet it doesn’t seem many of them think this way.

Are retailers in the business of having concrete stores with high rents or selling more products profitably to their customers than the competition? If it is indeed the latter then where is he global network of retailers allowing them to pool warehouse space and other assets to more effectively compete with Amazon? Where is the collective alternative to Amazon Prime which Macys, Wal-Mart, Target and others belong to?

As I have said before, it is better to be quick than right but I would add that if you are able to think strategically and then act decisively – without worrying about cannibalizing existing businesses you will have the best chance of surviving the eventual disruption you will face in your markets.

So yes, incumbent companies can be disruptors but only the best run companies who have tremendous vision and the ability to acquire, integrate and execute.

CES, Ultrabooks and Lowered Expectations

2012-01-08T20:40:43Z

It has been a few years since I have been to CES and I have to be honest, I have never seen the kind of lowered expectations for an event. There have been numerous stories from mainstream publications this past week telling us not to judge the future of the industry based on what the hot product at the show happens to be. For more see the end of this article.

While on the one hand this is good advice backed up by lots of flops like the Microsoft and HP tablet of a few years back that was supposed to be an iPad killer but was never released.

I’m wondering if it is just me who is skeptical about new technology in general. In other words CES or not you never really know if something is going to be the next big thing. Even when we are sure as an industry that a technology will take root, we have seen timing and other factors are more important than being an early player.

So just because 3D technology which was a hot trend at CES a while back is not mainstream it doesn’t mean it won’t be. Skype was way late to the VoIP game – MagicJack even later but both became successful examples of IP communications technology – a space left for dead by the majority of investors after the nuclear winter in telecom of late 2000.

This brings us to Ultrabooks – a topic I cannot be more delighted to discuss. Without a doubt this will be a major theme of this event and moreover I am writing this post on an ASUS Zenbook Ultrabook and love this device. How much? I am out here at CES this week and when I leave the room and don’t take it, I leave it in the safe.

The Asus is like a piece of jewelry – a fine watch as they say. In case you didn’t read my last post on the matter the keyboard is something I haven’t totally adjusted to – it lacks travel and forces you to hit it harder than normal to ensure all your letters appear on screen.

For a few years now we have heard the term consumerization of IT and to me this means bringing in really cool and trendy devices such as iPhones, Android smartphones and tablets into a company – and merging this with a wave of new software and applications designed to take these consumer tools and make them business tools.

While Ultrabooks are pretty much powerful laptops in sleek packaging – nothing new in terms of operating system or even software for that matter, they perform a slightly different function. They bring the power of desktop computing to tablet form factor. In other words these devices are the MacBook Airs of laptops. Having spent a fair amount of time in various Apple stores – my most memorable time was at the one on Greenwich Ave in Connecticut where a father gave his daughter a choice between the MacBook Air and the iPad.

I spent some time watching her go back and forth as she made the decision.

We all understand that there are big differences between these devices – one has hundreds of thousands of free apps which run on it from the app store – many of course have been written because the same tablet device doesn’t run Flash. The MacBook for its part is more powerful, has a bigger screen, etc.

But the point is the Ultraboook is the PC version of the MacBook Air meaning that if the MacBook Air is a serious competitor to the iPad then the Ultabook is the biggest threat to tablets in general.

Now the Asus I am using costs just a bit less than $1,500 and an Amazon Kindle Fire will set you back only $200. A big difference. Still there are worthy Ultrabooks on the market from the likes of Toshiba for $800. In fact the Toshiba is thinner than this Asus but the lack of bluetooth and less impressive screen resolution may be deal breakers for power users.

So to me this week at CES where a number of new Ultrabooks are expected is about not only innovation and design but competition.

I have spent my life in technology and have seen how competition has driven down prices incredibly – especially when Moore’s Law is thrown into the mix. In high school I wrote all the programs for TMC’s computers – they were all on a proprietary UNIX system but when it came time to migrate to a more powerful computer I hand-built a PC with an AMD processor running SCO UNIX – the price was much much lower and this new server was a monster in terms of disk space and processing power. The company which had sold us the proprietary UNIX system was named ZILOG and closed in the eighties at some point no doubt because proprietary has a tough time competing with open.

We are seeing the same thing happen in the Android ecosystem – it happened in the PC market, with laptops and numerous other spaces.

And it will happen to Ultrabooks. In a year a Zenbook equivalent to what I am using now will likely cost $899 or less.

So yes, trends in tech are tough to nail down – especially when it comes to timing. But the Ultrabook is evolutionary as much as it is revolutionary and as great as tablets are they really stink at doing things you need a PC for – they aren’t wonderful for content creation for example – switching windows on an iPad is still tedious as compared holding the Alt button and hitting Tab repeatedly.

And then there are the websites – how many times have I tried to complete an ecommerce transaction on a tablet from RIM or Apple only to find the formatting is not designed for a tablet and I have to wait to get to a PC to do it right.

The price discrepancy between a Kindle Fire and Ultrabook is massive a 4x differential or in my case 7.5x.

But we are at the beginning of a new subcategory of product and unless you believe the consumerizaion of IT is just a fallacy you better realize and quick that your executives will be asking about Ultrabooks soon. Moreover a gift to corporations may come in the form of more users buying their own Ultrabooks and bringing them to work – saving companies who allow foreign equipment into the mix a good amount of money.

So sure, lower expectations all you want. But from where I stand, Ultrabooks are a must-have at this price point – just wait until the competition heats up this week at CES.

For more see articles relating to products unveiled at CES and how they have failed:

The 'CES curse?' Gadget show has poor record, AP, Peter Svensson
CES not always the greatest guide for commercial success, CNET, Roger Cheng

Zennstrom Onto Next Big Thing: Wrapp

2012-01-03T17:09:39Z

Niklas Zennstron is on to the next big thing – the intersection of mobile, social and local – by investing in a new company called Wrapp which allows users to send gift cards via social networks. In a nutshell, you see it’s a friend’s birthday on Facebook and then send a gift card. They receive an email and the store scans it.

The twist here is companies could potentially offer free gift cards for sending, allowing you for example to send someone $10 which the store would in theory book as a referral fee/coupon meaning this fee becomes a marketing/customer acquisition cost. Obviously this makes the most sense if the lowest cos item in the store is far north of $10.

Zennstrom is a brilliant entrepreneur and has great timing. He launched P2P company Kazaa which became a huge player in online music and movie sharing. From there Skype and then Joost for online movie watching. This last venture didn’t work out most likely because content providers watched how Skype really hurt the phone companies and didn’t want to see the same thing happen to them.

Now with this new investment, we will see if Zennstron’s track record will continue to see more wins than losses. At least one thing is for sure – he is in the right spaces.

Julius Genachowski Makes Brilliant Move at FCC in Hiring Henning Schulzrinne as CTO

2011-12-29T17:48:30Z

Earlier this month, FCC Chairman Julius Genachowski announced the appointment of Henning Schulzrinne as Chief Technology Officer – a major move forward for the FCC and the US communications regulatory environment. This move was made in-part because the FCC has had to keep up with fairly rapid changes in the communications and networking worlds. Telephony was once a circuit-switched service provided by a handful of large telecommunications companies and a number of regional players.

It was relatively easy to understand and regulate. But when VoIP and other forms of IP communications came on the scene, the world became less defined. Vonage didn’t own the “pipes” to people’s houses but they provided telephone service. Thus the move from circuit switched communications to packet switched was underway. This raised issues of net neutrality but also changed the way communications service was to be regulated. Moreover, the FCC under Kevin Martin decided that VoIP providers had to rapidly deploy E911 service just like LECs and CLECs. This additional cost caused some VoIP players to go under but as Martin told me in a keynote interview at a recent ITEXPO – it wasn’t anything personal but a safety issue which needed addressing.

Fast forward to recent times… You know I have spoken about the death of the PSTN in this space and moreover I decided to dedicate a keynote lunch panel to the topic at ITEXPO as well. Although we are a number of years away from the inevitable death of the public switched telephone network, it will happen. Moreover, much of the technologies and standards to make this transition aren’t yet in place.

And to make matters worse it is only a matter of time before special interest groups get into the action and make statements about how the evil government and phone companies want to take away grandma’s telephone service.

So when the switch happens… It needs to be absolutely perfect. Flawless in fact.

This brings us to the news of Schulzrinne who has played an absolutely crucial role in the standards process and advancement of IP communications. Recently he was chair of the Computer Science department at Columbia University as well as co-chair of the Internet Technical Committee of the IEEE Communications Society. Perhaps most importantly he co-designed the Session Initiation Protocol which we affectionately know as SIP. Also the Real Time Streaming Protocol, the Real-time Transport Protocol and the General Internet Signaling Transport Protocol.

Schulzrinne has spoken at past TMC events and been an important part of the content we have created over the years – going back to the early days of Internet Telephony Magazine which launched in February of 1998. Here is a search (with news feeds) on TMCnet where you can see some of the mentions and coverage related to Schulzrinne.

The FCC is a government agency which generally means it is bogged down by bureaucracy, red tape and politics so a logical question is how much change can one man bring? I am unsure. But this move is a stroke of genius by Julius Genachowski and I give him the highest marks for his foresight in choosing Henning for such an important position at a time when the nation’s communications network will be experiencing absolutely revolutionary technological advancements.

Verizon MiFi 4510L Mobile Hotspot Review

2011-12-21T21:15:12Z

Recently I was emailing with one of my contacts at Verizon asking what the hot devices are from his perspective and during our conversation I mentioned I have Verizon 3G in my laptop but haven’t had a chance to try Verizon 4G. Without a beat he offered me a 4G MiFi Mobile Hotspot to test and review. It’s funny really, I am not starved for connectivity but this device made my business life much easier… It is an essential device for the cloud-based world we are moving to. After all, if all your apps live somewhere else and you don’t have the best connectivity possible, you really aren’t able to leverage the cloud. Makes sense, right?

I typically travel with an iPhone and iPad 2 on the AT&T network as well as a Dell laptop with a huge external battery which has a built-in 3G modem on Verizon. So like I said, I generally have connectivity wherever I am but the Verizon MiFi 4510L made life much much better.

First of all there is the battery issue – when you have multiple devices and have over a thousand e-mails a day, stream video, consume massive amounts of news and listen to the radio, etc you drain batteries fast. And if you don’t have WiFi access, you drain even more battery as your devices have to communicate to towers which are far away. With a mobile hotspot which has its own self-contained battery all your other devices can use WiFi allowing the battery drain to the tower to hurt just one device. And with a life of about five hours you don’t have to worry too much about the Verizon-connected device running out of power.

Then there is the network coverage aspect of this device. Verizon has a great network – especially in New York and New England. It connects in many places where AT&T does not. In fact I keep the MiFi in my coat pocket and turn it on when I leave the office. More than once I used Skype on the iPhone over Verizon 4G because I couldn’t get an AT&T signal.

Then there was the cruise – I recently went on the Norwegian Jewel to the Caribbean directly from Manhattan. One of the comedians on the cruise summed up how Internet on a cruise works… He said there are many Internet plans available on this ship… I bought the 15 year adjustable. (rim shot please.)

And yes – the most economical plan was about $25/hour meaning I didn’t stay connected for the whole cruise. Moreover before we got deep into the ocean I tried all my devices to see which ones worked – trying to stay off satellite until I needed it. Interestingly the iPad and iPhone did pretty well with respect to connectivity when land was in sight. The Verizon connection on my laptop outperformed the MiFi – most likely because of the integrated antenna.

But really, none of these solutions was great when land started to fade into the distance – or the ship was going in a direction where my room was on the far side of the boat.

Where the Verizon 4G network did shine was when we hit land and this particular cruise left on a Saturday afternoon and by Monday we were in Cape Canaveral, Florida – where we jumped on a bus towards Orlando to hit Disney World’s Magic Kingdom Park. I took this time to answer e-mail, download important attachments and perform many other data-intensive tasks. It is worth noting that 4G worked closer to Orlando and not close to the east coast where it had 3G connectivity. Once at Disney, there were many times when Verizon was a life saver – especially when I wanted to churn through email while waiting in long lines. But AT&T was good while at Disney as well.

Still, it is worth pointing out that by using an external device connected via WiFi to your iOS gadgets you can break the 20 MB limit which iTunes imposes while on the cellular network. In other words if you want to download Mark Levin podcasts from iTunes which are typically more than 20 Megs you can’t – unless you use WiFi and that is another great plus to using an external device to access the Internet via a cellular connection.

If there is any downside, it is that when your MiFi unit is far from a cellular connection or out of range it gets hot and uses more battery while trying to connect by boosting its signal. This happens with phones as well. Moreover, I experienced some outages in early December with the device and it turns out the Verizon network had problems. Having used Verizon for many years, until the two outages this December, I can tell you outages have been few and far between.

The other challenge was I had to reboot the MiFi a few times – this may have had to do with the outages Verizon was having but I’m not sure. Interestingly the problem presented itself only when I travelled and never in Norwalk, CT where TMC headquarters is located.

Regarding speed I was happy with the download speeds of over 10 Mbps while uploads never exceeded about 1 Mbps. It is worth noting that in tests in New York, Connecticut and Florida, these were the best speeds I saw and on repeated tests the results varied. None of this is news – cellular is a shared technology and if 5 people next to me decide to download HD movies that kills the available bandwidth for a while.

This of course is one of the reasons Verizon is buying spectrum like crazy and AT&T wanted to purchase T-Mobile USA.

Is it worth the $50 subsidized price with a monthly charge of $50/month for 5 GB or $80 for 10 GB? That is certainly a personal decision but you can use the MiFi instead of the internal cellular option in your tablets and cellphones. You can even decide to go 100% VoIP and use this device in conjunction with a cellular modem-free device like an iPod Touch and a VoIP provider which gives you a telephone number. The beauty of this solution is that when a faster cellular solution comes out you can upgrade your MiFi unit.

We are all doing more with our devices and cloud-computing as well as video are two major categories which require faster connectivity. The Verizon MiFi 4510L proved a great business productivity tool these past few weeks and I have no problem recommending it highly.