May 2009 Archives

So you are a launching another cloud computing service? (Or any of ther other trends like UC, Hosted PBX, IVR overlay, Virtualization) What do you do to get a bang? Launch a gutsy campaign.

That's what Carpathia Hosting is doing with an online luanch of this website:
http://www.whatisinstanton.com/

Now I would have added a Facebook fan page, some crazy twitter stuff, and a direct marketing piece that looked the similar (using Enthusem). And followed all that up with It's Here! at launch.

Still cool. Good luck Carpathia.

I'm watching two conversational threads right now. One about Google Wave, which as Andy Abramson writes:

I'll refer to Wave as transformational, as its not revolutionary, but moves work flow from asymmetrical to both symmetrical and asymmetrical universes simultaneously, changing how you work both in real time and offline time.

Google has built a "communications" object that is full of capabilities that creates hybrid communications that are going to be a blend of games, email, IM, blogging, wikis, and a lot more.

I haven't seen the Wave demo (see a review here), but the reactions have been nothing short of WOW, even more than when Google Voice launched. Google Voice probably made a few ITSP's cry, because it delivers features that they don't, but surprisingly people want. The me-too mentality of telco has slipped into the VoIP World. Except for a few mash-ups, VoIP has remained ho-hum to me for the last two years. The only surprising thing was how few VoIP Providers could get it right and deliver reliable service. And how few could attract more than 10,000 lines.

That takes us to the second thread about the Zer01 mobile service, which is VOX VoIP over the GSM data network of its partners (AT&T and T-Mobile). It is an unlimited plan for $70. No voice calls go out the GSM network, all tunnel back to go out VOX's network via a VPN, which should be taxing on the GSM system. Why? Because cellular calls are moved from tower to tower as you travel, but a VPN call would need to stay at the original tower or drop - then tunnel to each new tower.  This may not be taxing if most calls are off the one tower and don't move, which is possible. And if many UTGI customers are not dense in any area.

The UTGI contract with VOX calls for "a renewable "take-or-pay" obligation for at least 50,000 lines in the first year of service". (IP Business)  "Ben Piilani, UTGI CEO, stated, "With over 100 distributors already committed to over 500,000 lines in the first year, we could easily exceed one million lines in year one, and we are targeting five million lines by the end of the second year."

I question that number because Nextel's Boost is offered Unlimited for $50, all the big guys have Unlimited for $100 - data and voice. Virgin Mobile USA is adopting a $50 plan as well. Two drivers seem to be Price and Handsets. Nice handsets like Blackberries and iPhones come with a $100+ monthly price tag, but you can get service for $50 per month with a lesser phone.

I'll tell you where I see the problem: it's pitched on price ($70 unlimited) and there are cheaper plans. It's pitched as cheap International calling, where there are numerous competitors - i2, Skype, Fring, TruPhone, etc. And how big is the market to call International from your cell phone?

One thing UTGI probably doesn't understand is that having an ILEC as a vendor means your largest competitor is also your vendor. And he doesn't play nice. Most MVNO companies including marketing giants like Disney/ESPN have closed because competing against a cellco is difficult. (Wait until UTGI sees the billing error machine at work!)

MetroPCS has 6M lines. It took them a long time to get there. MetroPCS "ARPU fell from USD 42.51 to USD 40.40", significantly lower than $70. It's churn rate is 5%. I would love to know its Customer Acquisition cost and its Advertising budget.

You can get details of the UTGI/VOX Zer01 plan here. (Pervasip's SEC filing on it is here.) My skepticism comes from: can VOX's proprietary system and its company (which laid most folks off recently) scale to accommodate the UTGI plan IF UTGI can actually sell that many lines, which seems doubtful under the current flat market of cellular that is seeing higher churn, lower ARPU, higher customer acquisition costs, higher handset subsidy rates - it's a zero sum game of take-away. 

Finally, while Google's Voice and Wave services are Wow-ing people, UTGI isn't doing anything magical to the consumer experience. It's another arbitrage game. What's the reason a consumer would care how the call is carried? Consumers care about the handset and what they can do with it - text, take pictures, surf the web, and lately the apps.

January of 2000 CNN announced: "In a stunning development, America Online Inc. announced plans to acquire Time Warner Inc. for roughly $182 billion in stock and debt Monday, creating a digital media powerhouse with the potential to reach every American in one form or another."

This morning, over 9 years later, TW is spinning AOL out, according to CNN, a TW company.

Steve Case on Twitter had a lot to say about AOL: "AOL Spin-Off Approved Last Night By Time Warner Board: http://bit.ly/ThYkx. My perspective on AOL & Time Warner: has been a long, tortuous journey - and after a difficult decade, its time to open new chapter. Merger could've been transformative: driven convergence of TV/Internet/phone, ushered in digital music & video, etc."

I have to agree there. There were culture wars between the AOL employees and the TW employees, a classic case of old media versus new media mindsets. At the time, all I thought was that AOL was going to become THE place on the web. Pay your $10 per month and access all of TW Media like Time magazine, People, etc.; see movie trailers; get CNN breaking news. None of that happened. It had all that content to work with and absolutely no idea what to do with it. It didn't even have a Broadband play - even though TW owned Road Runner at the time.

Back to Steve Case: "But synergy didn't happen. Didn't integrate businesses to drive innovation. Lots of missed opportunities. Glad breakup now finally happening. Agree w/ TW CEO Jeff Bewkes, it is best for AOL and for TW. AOL not what it was a decade ago, to be sure. Uphill battle to return to greatness. But doable. Wish the team at AOL the very best!"

Case added: "Thomas Edison: "Vision without execution is hallucination" - pretty much sums up AOL/TW - failure of leadership (myself included). Resigned as Chairman 6+ years ago, left Board soon after, urged company to go left or go right, integrate or liberate."

AOL-TW wasn't the only big merger that didn't enjoy the synergies: VZ-MCI, HP-Compaq, DEC-Compaq, and so many others. Heck, AT&T is one umbrella with seven separate companies un-integrated under it, much like Level3. So mergers look good on paper - and the money looks great to the shareholders, bankers, and execs, but I don't know any that have worked out. It usually leads to short term monetary gains for a few and a big mess for the rest. It creates no ultimate value.

What will AOL do as a stand-alone company? Ride the dial-up cash cow, while figuring out the advertising network model, I guess.

Voxeo acquired IMified this week. What is IMified?  IVR for IM.

XO's IVR service earned an award. (BTW, agents can team up with XO to sell IVR service as an overlay).

Ifbyphone is all about IVR in the Cloud.

ACD and IVR are two reasons that small businesses move to VoIP. It is far cheaper to pay for the hosted service monthly than to buy an on-premise hardware solution that can provide it.  It looks like the race is on to make Mitel, Avaya, and Nortel premise equipment redundant or obsolete as you will get up-to-date platforms with maintenance bought as a monthly service, usable by your employees and customers any where in the world.

After a profitable quarter, 8x8 reaches an agreement with Aastra to co-brand a phone at Office Depot.

"The 8x8/Aastra 6755i Virtual Office IP phone replaces the Virtual Office ST2118 analog business phone which Office Depot had previously been carrying. These plug-and-play IP telephones serve as endpoints for the 8x8 Virtual Office hosted IP PBX business phone service, currently in use by over 16,000 companies. 8x8 Virtual Office provides businesses with a complete, enterprise class phone system at a fraction of the cost of a traditional PBX and roughly half the cost of traditional business phone service."8x8 gained $1.4M in income on $15.8 million in revenue in 3Q08.

We haven't heard a lot about VoIP patent litigation since Vonage took it in the pants when everyone and their momma sued them for patent infridgement. VoIP Inc. was supposed to license their patents, but those guys are running from the law.

Paetec settled its patent suit with Sprint by licensing the infringed patents. Terms were not disclosed in the SEC filing. Sprint, with over 100 VOIP patents, sued NuVox, Broadvox, Big River and Paetec in January of 2008.

And Covad settled with VoxPath Networks Inc. over a VOIP patent dispute, according to Law360.com. It would seem to both Rob @ TelecomRamblings and me that everyone is infringing on someone's patent AND the USPTO approved WAY too many patents for this technology. Sprint owns over 100 but so does Verizon and Level3.

HyperOffice is holding a webinar about Email and Productivity. It follows up on the LinkedIn Poll that Shahab Kaviani, VP of Marketing at Hyperoffice, held last week on reducing your Inbox with Online Collaboration.

This is of interest to me because I get so much email, including listserv messages and social networking notifications. There is so much noise to filter through - Facebook, LinkedIn, Twitter, email, IM/chat, voicemail, and text messages - it is becoming overwhelming.

There are days that it takes 6 hours to shuffle through all this communication. I think this hyper-connectivity is a bad thing. Notice how people in a restaurant or a bar spend more time on their phones than actually talking / interacting with the people right in front of them?

Crackberry was a joke, but it turned out that it is very difficult for people to unplug. I successfully did that for a couple of hours each day this weekend, but then right back online to see what I missed. It's nuts. I'm going to start a 12-step program.

Are you overloaded with email / communications? Is email bankrupt? (After getting 500+ spam messages this morning, I think the answer is obvious, except that email is primary communications tool).

Obviously, there are tools that can be used to make business communications more efficient, but some that I have tried slow down Outlook so much or eat up so much memory the laptop slows down that I had to delete them. Suggestions are welcome.

1. Are you overwhelmed?
2. Can you un-plug?
3. Do you un-plug?

A productivity consultant I know, Matthew Cornell, says that he has a zero inbox. I can't even envision that because some projects, like a fiber build, can result in over 400 emails. I leave them all in the inbox until the project is finished, so I can search in one spot. That's probably not the best way, but I also go through both my sent folder and my inbox monthly to make sure that I have contacted people regularly.  Again, I would be happy to hear of a better way.

This is an interesting way to market a Data Center: Carpathia Hosting is using an e-book!

• Data Center of the Future: the Introduction
• Chapter 1: Security, Privacy and Risk Management
• Chapter 2:Monitoring, Management & Service Frameworks
• Chapter 3: Datacenter Optimization Services - coming soon!

The FCC is cleaning up USF abuse. Here's two culprits:

MS. CYNTHIA K. AYER. Debarred Ayer from the schools and libraries universal service support mechanism for three (3) years from the debarment date. Action by: Chief, Investigations and Hearings Division, Enforcement Bureau. Adopted: 05/21/2009 by LETTER. (DA No. 09-1115). http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-09-1115A1.pdf

MR. R. CLAY HARRIS C/O ALLISON COBHAM DAWSON. Debarred Harris from the schools and libraries universal service support mechanism for three (3) years from the debarment date. Action by: Chief, Investigations and Hearings Division, Enforcement Bureau. Adopted: 05/21/2009 by LETTER. (DA No. 09-1113). EB http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-09-1113A1.pdf

Why you ask?

"As discussed in the Notice of Suspension, a federal jury found you guilty of bribery and conspiracy to defraud the United States in connection with your participation in the E-Rate program. Evidence provided at trial demonstrated that, as President and majority owner of MCSC, you provided bribes to co-conspirators, former employees of Atlanta Public Schools and co-owners of M&S Consulting, in order for the co-conspirators to support your efforts in securing MCSC's performance of E-Rate and other technology-related work for APS. Such conduct constitutes the basis for your debarment, and your conviction falls within the categories of causes for debarment under section 54.8(c) of the Commission's rules." per the FCC documents.

Because broadband is so slow in the states, Amazon has resorted to allowing companies to mail in their portable devices for data storage and upload. According to Cloudave, it could take "82 days (with 1.54 Mbps T1 connection) to migrate one terabyte of data with 80% network utilization."  So "Amazon has resorted to old fashioned approach from the previous eras. Users can mail Amazon their data in one of the supported portable storage devices and Amazon will transfer it to users' AWS account from within Amazon's high speed internal network."  Sad really.

In VoIP news, M5 Networks, a Genband based hosted PBX company out of NYC, has partnered up with eXpresso, as its collaboration and file-sharing platform. The eXpresso platform is a value-add to the M5 On-Demand conferencing platform.

"The M5 Network phone system has an extensive portfolio of capabilities, but one in particular is especially harmonized with eXpresso: On-Demand Conferencing. That feature enables users to instantly host or attend conference calls on the fly, anytime, from anywhere. In combination with eXpresso, it enables live collaborative meetings where a real work-product is generated. Conventional "Web meetings" don't allow participants to contribute to documents."

It's the next evolution in VoIP -- SAAS.  But I have to ask, Shouldn't Hosted Email be the first App you host with the Voice App? Unified messaging starts with email, chat, and voice. Google Voice has done that by combining the Gmail Inbox with the Google Voicemail box (and the voicemail-to-text feature).

With VZ shedding its last bit of rural landlines to Frontier, the blogosphere is alive with talk about Super RLEC's - Frontier, Fairpoint, CenturyTel, Windstream and maybe Qwest.

CenturyTel's coming merger with Embarq will give it the title as a top 5 ILEC is size. But these are declining assets as landlines are being shed for cellular and to some extent VoIP. How Super is that?

Telecompetitor writes, "For carriers that lack wireless assets, building the scale that can create  operational efficiencies and provide the means to profitably build and leverage broadband applications is paramount for future survival."

Building Super isn't easy. Fairpoint has been a flop. Huge debt. Broken promises. Increasing consumer complaints. Lots of line losses.  That's not Super.

I can't think of a single telecom merger that resulted in the synergies or integration that was promised. For the most part, it's just a CEO and Banker feast of bonuses. The consumers lose.

Look at Frontier. It isn't exactly innovation nation now. Sure it does some VoIP, but it's TV service is DISH TV resale.  And this RLEC has seen years of complaints at state PUC's, which means poor service. How will the integration with Verizon landlines improve that? I keep see the nightmare coming. Unfortunately, the regulators can't (or won't). (The same for the Embarq-CenturyTel deal. C-Tel's systems that I have interfaced with are older than dirt or PAPER!).

None of the RLEC's have a nationwide or even a fairly large cellular footprint. So it's just a matter of getting big and hoping to ride out the cash cow of wirelines, like EarthLink is doing with dial-up.

I'm getting ready to run downstairs to the Florida Venture Forum 2009 Early Stage Venture Capital Conference outside Orlando at Omni ChampionsGate. Beautiful golf course.  It will be interesting to see who is here. I am hoping 2 companies made it in.

eCycling which recycles business electronics, eCycling has a deal with Fedex as their distribution partner. You can drop off unwanted electronics at Fedex locations for recycling. Save the planet!

NullBound is an exciting network security start-up. Put one of NullBound's boxes at the edge of your network and never worry about malware, spyware or virii again. It stops them intelligiently before they can come into your network. No client software needed! (Take that McAfee!)

Well, got to run. The money folks are waiting.

Remember the MCI Agents who didn't like the new deal under the Verizon Business umbrella, who were pushed aside and lost commissions? Did you know that when Verizon did their funky little deal with Fairpoint over the New England region, VZ agents were pink slipped. In fact, one agent is suing Fairpoint. It's the quote from Beth Fastiggi, a spokeswoman for FairPoint, that shocked me:

"We believe that our own local employees can better serve our local markets and, given the appropriate resources, will have the commitment and ability to increase our share of the local business market," Fastiggi said in a statement Friday.

Don't need agents. That attitude explains the lousy service, numerous complaints to the PUC, and the lose of over 100k lines - in a rural market!

Today, VZ announced it is spinning off the landline network in 13 more states - to a joint venture corporation with Frontier. I'm certain those customers are thrilled. At least, they had a slight hope of getting FTTH. Now, not so much.

Frontier does have a Business Agent Program. I don't know anyone in the program so I have no comment on how strong it is for agents.

Embarq agents are waiting to hear what happens to them with the CenturyTel merger. These mergers do impact both consumers and small businesses, especially the agent businesses.

Although it was AT&T's CEO that said We are a Wireless company, it is the actions of Verizon that make you stand up and take note. Today, VZ reached a deal with Frontier - a $8.6B all-stock deal. As Frost & Sullivan analyst Vanessa Alvarez tweets, "$VZ and Frontier will create company called Spinco, $VZ will still own 68%."  It looks like another Fairpoint deal. The only happy camper is VZ. It gets richer, rids itself of responsibilities, and screws the consumers by leaving them with a rotting network and a financially burdened phone company.  Where are th eregulators in all of this??

"The deal includes all of Verizon's wireline assets in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin as well as some assets in California." [Yahoo]

Marketwatch announced that "Frontier will be merged with a separate, newly formed entity known as SpinCo, which will be spun off to Verizon's shareholders. ...SpinCo will carry approximately $3.3 billion of debt consisting of a combination of newly issued debt as well as assumed debt. Verizon will receive about $3.3 billion of cash or debt relief."

Looks to me like another Fairpoint deal. Ask New England subscribers how they feel.