August 2008 Archives

A couple of clients use GenBand. They are in for a shock today as Broadsoft announced "their acquisition of GENBAND's M6 Communication Applications Server, formerly VocalData, product line and related customer base." Broadsoft will now have 435 client companies.

On a CLEC listserv, the discussion recently was about this space - the Hosted VoIP Application Services space. Now it comes down to Sylantro and Broadsoft really. This probably means more folks will do "proprietary" systems like VOX and FreedomVoice. It is certainly an industry of smaller players who can't fork over the money for the Broadsoft system; like to Do-It-Yourself; and dislike licensing. There is the scale factor. Obviously, Sylantro and Broadsoft can demonstrate scale, but can a proprietary system or an Asterisk-based system? Probably not. But then it may not have to. Many of the Asterisk-based providers won't see an issue until there are more than 300 simultaneous calls going through the box. That means at least 1200 lines. That is a munch of customers. More than many VoIP Providers get. (Which is why the VoIP Orig/Term market is so fragmented as well).

We can discuss this more at IT Expo West in 18 days. (Join the Facebook group). Ping me about doing dinner on the 16th. Have a great weekend!

So I get a marketing newsletter today and it has an ad/referral to a new book about Startup Success. The author has been CEO of 2 companies -- neither of which has been a success. One filed for bankruptcy and one has burned through millions in investment money with little to show for it. In fact, he was removed from his position at the second company. So how would you explain success to a start-up?

This isn't the only exec like that. A Tampa telco hired a someone to be prez back in 2002 or so. He BK'ed the first company and closed the telco. I have seen it time and time again, execs in telco get to fail but land at a new position elsewhere.

I understand the whole Tom Peters concept of fail fast, but he is talking about taking risk, failing, learning, trying again - without closing the doors. I can also understand that it may in fact be a learning experience to close the doors -- once, not twice. And write a book about what you learned from the failures, but not success, unless success means making it to CEO twice.

We had the huge DNS security hole a couple of weeks ago. Now we have the BGP security flaw. What next?

Well, according to a presentation by VOIPSA, there are threats out there to target SIP. BTW, VOIPSA is the VoIP Security Alliance.

We have heard about SPIT ("SPam over Internet Telephony") and according to the presentation, "Makes for great headlines, but not yet a significant threat." Then comes Vomit and Asteroid? VOMIT is voice over misconfigured internet telephones. Asteroid is a SIP Denial of Service Tool.

It was an interesting look because I am certain that people are preying on weaknesses, but I don't hear too much from ITSP's about security, prevention or awareness. Do you?

two extra notes: The Voice Over IP Security Alliance can be found hackingvoip.com.

Nominum Solves Kaminsky Attack

The PR factories are pumping out releases working up to IT Expo West. At least, they changed it from puking on me to invitations to speak with an exec. This came in about an hour ago:

Free phone service wasn't even a thought ten years ago. New technology breakthroughs are lowering costs for providers and increased competition with new telecom startups and the growing number of Voice over IP (VoIP) users is bringing prices down. ..... Would you like to speak to Mr. Exec about when and how free phone service will be a reality as well as Company X's platform?

Dave Rusin asked yesterday where all the innovation went. And I make my clients change the pitch. It is NOT about how low can you go. It is about What Can You Do For Me?

If all you have to say is we are the Cheapest, well, join the club: Net2Phone, Voiceglo, Vonage, Skype, SunRocket, MagicJack, and yadda yadda. And we will start a Death Watch on your company. [I give Vonage until the end of 2Q09].

How about some Innovation? And I don't mean your user portal. Yawn! Remember Vertical's TeleVantage? That was the first user portal and all others are mere copycats. What about "HD Voice" or Klipsch like speaker quality? (I know mainly hardware innovation.

Service wise, it has to be about ease of use and productivity (like Broadsoft Anywhere).

The Jetsons had Video Phone long before we did. Yet BrightMind and other services rely on a video phone (Grandstream in most cases) to negotiate with a similar model. From tests by clients, ease of use isn't there yet.

I think "free phone" is becoming a stale marketing plan, but the reality is even ploys like MagicJack at $20 per year are not sustainable models.

Obama is probably the candidate with the most tech-savvy staff. Ron Paul was better, but unfortunately for the US, he is not running any more. Instead we again have two choices that make me weep. How did 20+ candidates come down to just these 2?

One who is a tired old candidate that, I think, is out of touch with where we are and what the major issues are.

The other is a cult figure, if by cult you mean people are looking at him like he was an albino alligator. By that, I mean, people are fascinated with his campaign and his persona, but I'm not certain that many buy into his platform.

The platforms... Yeah. The issues that are important like Energy, Economy, and Healthcare. These issues should have been tackled by DC ten years ago. And the folks running have been in Congress ignoring these issues for the last 8 years -- so because they move up the street, we can expect them to solve something? It doesn't work that way. Ask Hilary. Congress passes bills into law. Bills get presented IF they can make it out of the political quagmire we call Committees. And you need Juice for that. Lobbyist and Power and Leverage (you know, Blackmail and Dirt).

Obama picked Biden. (I tell you this in case you live under a rock, and missed MSNBC interrupting an Olympic gold medal match to tell us). Biden's tech record is being examined. Guess what? Pro-RIAA. Pro-FBI (read wiretap).

Now I'm not a file-sharing nut, but do you really want Congress regulating Network Management? Have you seen what the DOT does to highways???? Ever travel I-95 in the summer? Enough said. If the F-Agencies (FTC, FCC) would just enforce current laws, we would be fine. Enough on that too.

Anyway. We head to Colorado to the Democratic Convention - at the same time as the US Open. What were they thinking? And AT&T will bring you there. See here. You will laugh, but they aren't joking. The largest telco as the largest patent troll in the world. Just great. Thankfully its 5. I need a drink. If you are attending IT Expo West, give me a shout. I promise not to talk about this stuff, until after 10 PM.

In-Stat's study on hotspot revenue, according to Communications Direct:

The number of hotspots providing public wireless LAN access continues to grow globally and more people are using them, reports In-Stat. But access revenues do not appear to be keeping up with the growth in use, the high-tech market research firm says.

My favorite part is the summary that makes some obvious conclusions, as we see here:

1. According to an In-Stat consumer survey, people are increasingly using hotspots for personal reasons.
2. Survey respondents are showing an increased reluctance to pay for hotspot access. Nearly 50% of respondents said they would only use a free hotspot.
3. Access revenues will start to decline due to increased competition and users' reluctance to pay.

So no one wants to pay for wi-fi access. This is what EarthLink learned in its Muni Wi-Fi experiments. Consumers will pay for EVDO, though. On blogs and at conferences, people complain about the daily rate for Internet Access, even though they know it is expensive to provide. It makes no sense to me, but I would like it if it was included in some room rates or I could trade reward points for free access. It used to be $9.95 a day, but in Boston at the Westin Seaport it was $12.95 per day. That's why people don't buy it. Under $10, sure. Over $10, wait! What?!

But if no one wants to pay, then revenue WILL drop. Duh!

I see that The Mozilla project has added functionality to Thunderbird, the email client I use. With Sunbird calendar and Lightning plug-in. "Since it's an extension, Lightning is tightly integrated with Thunderbird, allowing it to easily perform email-related calendaring tasks." My question: Is anyone using this combo as a replacement for Microsoft Outlook?

My Outlook pst file is about 1GB and email contents date back to my start in telecom in 2000. Can T-Bird run with 1GB in email, contacts, hundreds of folders, thousands of calendar items and hundreds of tasks and reminders? Any input would be appreciated. Thanks.

If you Google Lightyear Wireless, you will get 400K+ entries. Everyone looking for instant riches via multi-level marketing is looking at Lightyear's new deal to deliver cellular services via Verizon Wireless. Telecom folks don't pay attention.

This is an MVNO deal, which is when a provider buys cellular minutes and resells it under its own brand. PNG tried this. Even Embarq quit being an MVNO. Earthlink and SK Telecom dumped $275 Million into Helio before it was sold to Virgin for $39M in stock.

Two of the biggest brands - ESPN and Disney - both launched MVNO projects and closed them.

I understand that people buy into MLM schemes - Amway, Talk Fusion, YTB - because everyone wants a shortcut, but the money just is not there. Handset fulfillment on top of billing and marketing make it an uphill battle. And how do you pay up to 10% of monthly compensation?

Mainly, I think the money will come from "agents" paying to be an agent. That's right, you have to pay to sell Lightyear Wireless and pay (like $39 per month) to have a website to sell LYW on. (You can see the whole compensation plan on video here - while it lasts). LYW also has to come up with cash to subsidize the handsets for its customers.

If you really want to sell cellular, why not become a VZW agent and get paid $250 per contract? It would be easier. $1 per month per subscriber is not going to make you rich, especially when paying monthly for the opportunity. And especially when most of the MVNO's fail.

Qwest sent me an invite to a webinar: PCI MOVING FORWARD: Best Practices to Achieve and Maintain Compliance.

PCI compliance is a constantly changing security requirement for all businesses that process, store or transmit consumer credit card information. Shifting parameters, looming deadlines and increasing responsibilities all pose a challenge to becoming compliant and staying that way. This joint webinar between Qwest Business and Cisco Systems will introduce ways to reduce risk and shorten the journey to compliance.

Date: Wednesday, September 10, 2008

Time: 10:00 a.m. Pacific/1:00 p.m. Eastern

Register here: www.pcinext.com/partner

Metaswitch landed a big gear sale to Embarq. In doing so, it avoids going the way of the CopperCom. You need a big carrier to be a vested customer so that you can sustain the R&D and tech support departments.

When you look at the numbers, the companies winning the consumer VOIP battle appear to be the cable operators. Ike Elliott has a post about Over-the-top VoIP Providers dying in the residential space. Vonage is spending $65M per quarter to maintain its subscriber numbers at 2.6M. It's churn is barely being replaced by new customers. Cheap folks are flocking to Skype and its look-alikes, MagicJack (don't get me started!) and T-Mobile cell & VoIP plans.

8x8 decided wisely a year ago to focus on Business customers, which have an average of 7 lines and $252 in ARPU. That beats the sub-$40 ARPU of Vonage.

MagicJack is $20 per YEAR. I don't see how that will work out. Plus talking to folks on it sounds like there is tissue paper being crinkled on the line. It doesn't stop people from using it.

SunRocket imploded. ATT CallVantage is on hold. deltathree is tanking. Over-the-top Consumer VoIP is almost over. I think UC and Hosted PBX is a better play - and it is what people will pay for. One number. Find-me. Unified voicemail box. VM-2-email. Combined address book. And I guess calling International often, but that's what calling cards are for.

All-you-can-eat cellular plans are also going to be a landline replacement, as RBOCs are learning. T-Mobile is hoping so with @Home.

Not everyone cares about the call quality - as you can see from the number of folks that spend all day on cell phones and the millions that use over-the-top VoIP. Also, Skype and other PC-to-PC and PC-to-phone apps. If I am trying to make a connection with a prospect or solve a problem for a client, I want to HEAR it. Give me a POTS line or my CallVantage line any time.

That was the slogan that AireSpring was using at the Channel Partner show in Boston - "Just SIP it!" The problem, as I see it is, is that 85-90% of the Agents have any idea what SIP is.

I sat through the VOIP/SIP BootCamp that FreedomVoice sponsored. People just can't wrap their head around VoIP and SIP.

I sat through the Covad presentation on their Integrated Access product, which i sreally SIP Trunks with call paths. However, they just call it a dynamic T1. It is easier for the agents to grasp, I guess.

Some of it is that Sales Folks know it all, so won't admit (in public) that they are ignorant. Self-education on SIP and VOIP is tough, because even some of the education coming from the Industry is vague and erroneous.

Now that Qwest, AT&T, Paetec and Level3 are clamping down on short term TDM traffic (dialer traffic that lasts less than 1 minute), TDM LD minutes of usage will start to shrink. Call Centers will be looking to swap to SIP Trunks to replace those LD T1's. Agents will be hard pressed to figure out what carrier to use and what the implemantation will look like. Unlike a PRI, which has two set standards nation-wide and inter-operates with almost any PRI card in any PBX or similar equipment, SIP Trunk is not a standard but a spec. There isn't universal inter-operability, so more education and research will be needed by the Agents. When carriers are thinking about training, they should do it in stages. Simple stuff in a short webinar to handle the basics for the first chapter. The second chapter should explain what SIP Trunking is, what it is not, and where it fits. Chapter 3 should be about provisioning. RAD-INFO will be doing an agent call on How to SELLECOM: SIP Trunking in September. Sign up it's no charge.

UPDATE: FTC all but bans Robocalls! YEAH! That will work about as well as the Do Not Call list -- meaning mediocre.

Cox, Comcast, Time Warner, Charter, and CableVision showed up for a panel at the Channel Partners Expo in Boston today. As you can imagine the agents let them have it. The question the panel asked is Why Cable? Why, indeed. It sounded like the program is temporary or "in trial". MSO's don't really know the SMB market. Cablecos don't know the channel either.

Currently, they are selling basic voice and data packages with security, hosted email, and backup/storage. So What Wins?

Quality of Service. Fair compensation (20% plus spiffs). NNI and inter-connection of the 5 top networks, which hit 92% of the US land mass. The cable execs handled some of it well until Macario had to halt the conversation as it neared collusion and anti-trust.

All of them have a Business Broadband product. Twelve phone lines and less. Hosted PBX in the pipeline. Managed Services with Response Point and Cisco CallManager. TWC is launching PRI. Cox is rolling out SIP Trunk. Some programs are referral only.

It was an interesting talk. I appreciate them for showing up and being forthcoming. ILEC's better look out.

I often quote that there are over 1000 VoIP Providers, including every Tom, Dick and Harry with an Asterisk box. Invariably, I get asked about consolidation. Well, cable has taken the lion's share of VoIP. Far and away the MSO's have become the giants in the VOIP world.

I think dial-tone replacement companies like Vonage do not have much hope, since cable has been quality control and bundling. Also, cellular is becoming the choice for landline replacement. Oh, and deltathree posted horrible 2Q08 results and may close.

What about the Hosted PBX companies? With the help of GenBand and Broadsoft, Business Hosted VoIP should boom (see Gary Kim's estimate). Hosted PBX is the way to go for profitability and churn reduction for VoIP Providers, if you can control the quality and offer a level of customer care.

We are organizing BarCampTampaBay for Oct. 11 & 12, 2008 at USF College of Business. These are the first 11 ways we are marketing this event:

• Local bloggers - contact, invite, interact with.
• Local organizations like the Chambers of Commerce.
• LinkedIn - your network first!
• MeetUp.com - create a group, just $75.
• Eventful.com, Upcoming.yahoo.com, Craigslist - free event listings
• Newspapers - weekly, commununity, and trade. Magazines, too.
• twitter - again your network first.
• podcast about it and get others to do so; interview with podcasters.
• create a website or a blog
• eventbrite.com for sign-up sheet
• make a Facebook group