Recently in voip Category

I received an invite yesterday from XO to come down to the Tech Data Expo at the Don Cesar Hotel in St. Petersburg FL. ADTRAN shared the booth with XO at this event. Surprisedly, the other two carriers that distribute through Tech Data had assigned booth space, but were absent. 

XO is a good fit for Tech Data. While I think the XO catalog is too large to know well - wireless, hosting, IP, VOIP, transport, collocation and more - the VAR's at Tech Data vary so much in what they do and what would complement their business that the wide selection helps - IF you can get in front of them and remind them throughout the year how they can take advantage of the additional revenue stream. 

For many VAR's the advantage of XO through Tech Data is that there's no contract (especially for those VAR's already under contract with Ma or Pa Bell) and with Tech Data as the "master agency", it isn't likely you need to worry about your residual check.  (And now that XO has converted their debt, it is in a good position going forward, which other debt laden CLEC's can't say).

Many VAR's are already in the PBX space and were asking about SIP. I wasn't sure if they actually grasp the concept of SIP or that they just know enough to be dangerous. The biggest difference between a PRI and a SIP Trunk is Inter-Operability. PRI is a standard with two available configurations that work with almost all the PBX's on the market. SIP Trunk is a spec - a collection of a lot of RFC's that have to work together just right to provide dial-tone. Broadsoft, the softswitch that XO is using, has tested inter-operability on many IP-PBX systems. Not so for other SIP Trunk vendors. So before you sell that SIP Trunk make certain that the IP-PBX model will inter-op with your SIP trunking vendor. It's a mess if it won't work.

I'm going to be speaking at a CLEC and ISP event next week in Nashville. Some interesting topics really. CLEC Strategy, How to Sell VoIP, and Marketing in a Nutshell.

Here is the slide deck for How to SELLECOM Digital Voice

This will be a strange post but Alex Balashov and I had a Twitter exchange today about the telecom industry and its relentless pursuit of arbitrage plays. From long distance to calling card to SIP trunking, it's all about changing the bucket of minutes for something cheaper so someone can make some short change coin. Kind of ridiculous.

I asked where the Purple Cows are. Where's the HD Voice in my Hosted PBX? Where's the mobile component that is stupid easy? 

Alex doesn't like Hosted PBX. "As for Broadsoft, it's an overpriced waste of time. Not because it sucks- it is a very feature complete multitenant engine...its cost simply doesn't scale to what people are willing to pay for hosted PBX and dial tone. Shot up by commoditization." 

I think that there are two camps: one that thinks Voice should be free - and I hear that more from folks IN telecom than from buyers. And these folks simply do not grasp the stranglehold that the ILEC's have on the PSTN, which for years to come will still be the network of the final mile to end user. Yes, cellular is large and cable voice is growing, but most of that traffic still resides on the ILEC operated PSTN. ENUM and Voice Peering domestically in the US has not  reached a level that will cripple the PSTN yet, luckily. (What will we do when that happens?)

The other camp will gladly pay to reliably and clearly communicate with family, friends and customers. 

Maybe I am in the minority but I can't hear folks well on Skype, Magic Jack or cell phones. I for one would like less computer features on my "smartphone" and better clarity, volume controls, and speaker. But that's just me.

Alex does make a good point that all ITSP's need to pay attention to: "No process, no standardisation, no infrastructure = no chance of making money, on something that is a red sea to begin with."  What's a Red Sea? A bloody marketplace built on price, not value. "Develop business processes that can be replicated at decreasing marginal cost, standardize." That at least helps when you live in a Red Ocean.

The Starbucks of Telecom. Who is it? Alex suggests that it is "Ifbyphone, Callfire, and various niche call center and dialer vendors (far from all)." And certainly these companies offer a value add on in a niche way. However, who is providing the dial-tone while delivering a communications experience? (I don't know). I have a laundry list of stuff I want from my Hosted PBX vendor:

• HD Voice
• Easy access on smartphone
• Easy transfer to/from mobile/desktop
• Presence
• Video capability
• IM/Chat
• Email-Voicemail Integrated mailbox
• Voicemail text 
• UM (unified messaging)
• User portal
• Click to call

Alex thinks that the Duopoly is getting better at delivering smaller transactions. I think that they still suck at it and it is costing them a fortune in acquisition cost. Then a fortune more in brand deterioration when people get frustrated with the experience. (Part of is it the B.S. marketing that they have been doing for years that raises the level of expectations to beyond the network to deliver. Can you say More Bars or No Dropped Calls or Best Network?)

Very few Purple Cows in our Industry. And if you think you are one, I suggest you talk to your customers. Why? Because while you may think you deliver a great service, your competitors are taking your customers.

Alex and I did agree that the way SIP Trunking is sold is yet another arbitrage play. "So, I think we agree - trunking in itself is a very mathematically exacting but mostly pointless waste of time.  As far as who captures the value in the non-enterprise VoIP space, you're absolutely right - the very few value-add vendors." 

It's food for thought from twitter.

Alex talks further about TDM - that it is still the winner in reliability, inter-operability, and call quality. 

"From a cost perspective that is a hard OPEX formula to meet. TDM is still the only reliable means of PSTN access. Stuff just doesn't work well. Eventually the smart ones widen up and get cheap TDM circuits, and ISDN gateway boxes. ... 90% of their technical overhead drops off, churn slows, but the margins take a dive unless they got a really good deal. "good deal" usually means meeting an IXC in a hotel and not paying loop on the circuit, just blended usage."

This leads me to wonder what ever happened to Voice Peering and ENUM? Well, one thing is that everyone wanted to start one. There wasn't just one. The rules and connection costs get in the way. Why didn't COMPTEL force its membership into a Voice Peering arrangement in 2005? Add in the Cable Industry, VoIP players, and Sprint's network of cellular minutes and you take a lot of the minutes out of the ILEC's PSTN. Costs drop. Or would they? Seems that the CLEC's would still want Inter-Carrier Compensation since some have this built into their financial model (as it were). Because Bell-heads (traditional telecom execs) don't think the same way that Net-Heads (IP execs) think. The settlement model would have to be forced on them. Even the FCC has balked at that for 10 years. 

Alex doesn't get my Peering point so let me spell it out further. Take Sprint as the manager of the Voice Peering Points in Dallas, NYC, LAX, CHI and maybe VA. CLEC's, cablecos, ITSP's could drop traffic either as TDM or IP on the switch and not pay for termination. A flat rate if you will. But Alex is correct that the settlement issues just won't float. Too many Bell-heads left in charge. 

To mean VoIP was able to take off for 3 reasons: broadband deployment, expensive TDM, and cellular acceptance of crappy call quality. We haven't come much further than that.

I have a problem with a dangling phone number - my home phone. It's the number that my parents, in-laws, friends, doctors, bank, etc. has - plus all those tele-marketers. My wife and I each have a cell phone, so what do we do with that home phone number?

RCF (remote call forwarding) from Verizon is about $40. A home phone line with fees is $58 with Bright House cable and $63 (+LD) with Verizon. I want to port it to a Google Voice kind of system. (Only Google doesn't port numbers - yet). 

GotVmail (now Grasshopper) used to have something like it. I guess if I don't plug in an ATA, I would still get the web portal and call forwarding features from any ITSP.  

This came in from Peter Shankman's HARO:

So you have a phone number you love. But you can't move it when you move, can't hang onto it if you want to change a cell phone, blah, blah, blah. Thanks to HARO Family Member Number Garage, you can!  NumberGarage.com services were created to solve a unique telephony problem: local number portability. Small businesses pay a ton for a Remote Call Forward (RCF), and NumberGarage has an affordable solution compared to those fees charged by traditional landline operators. Some people are actually foregoing their landline and adopting their cell phone as their primary telephone. NumberGarage
helps those who are "cutting the line" as a way to transition to one phone by having all calls to their old telephone number forwarded to their cell phone. NumberGarage makes it possible to capture ALL callers for a fraction of the cost. Landline operators won't forward your home line to your cell line without costly service charges. NumberGarage gives you an easy and economical
solution. Check them out! http://numbergarage.com - On Twitter at
@numbergarage

I have to wonder why more ITSP's don't see the need for RCF-like options, more Voicemail box options, Virtual-NXX numbers (so I have local numbers everywhere), and other Google Voice kind of features. 

The financial activity in the ITSP sector that I am seeing leads me to believe that the ITSP sector is taking off.

• Cypress buying up Reignmaker assets.
• Telesphere got $15M for expansion.
• XCast collecting a $2.7M investment.
• Forbes publishes an article titled The Value of VoIP.

Although there have been analysts who think that IP Lines will slow down, I have to think that in the economic reality we are facing, the distributed workforce, the tele-worker, and the mobility of employees, more and more lines will move to VoIP. For cost savings as well as productivity reasons. 

If lines do slow down it will be due to the following reasons:

• layoffs - less employees = less lines needed
• mobility means less landlines needed
• email, social networks, IM/chat, texting is replacing phone calls.
• over all trend for less phone calls.

There are so many reasons for small and medium businesses (and self-employed persons) to migrate to VoIP that I don't see it being stagnant for long. 

Who to go with?
The one issue is the share number of VoIP Providers (with little differentiation) makes the decision difficult for the business owner. 

Premise versus Hosted
The premise hardware guys are selling their gear as if it was hosted at your site. Many business owners aren't familiar with having such a significant communication service outsourced (off property). It's a strange concept to wrap your head around. Plus there may be changes like cabling and handsets that go with the move that represents too much change for the business owner in today's hectic marketplace.

Blinking Light Syndrome
For productivity to be affected positively at the office by VoIP, the way workers answer and use the phone might have to change. Call park being the biggest one. (But some providers have this solved). Still change is tough.

VoIP Providers Themselves
Many of the people selling VoIP pitch the cost savings. Wrong! There will be changes, so it needs to start with a conversation about how the business operates and uses the current phone system. It takes longer but it is the best approach. Looking at the bill and shaving points off it hasn't been highly successful for CLEC's, who have spent billions to make millions. 

The other side of the ITSP coin is the unclear marketing message. So many companies in the VOIP space do not have an elevator pitch, a positioning statement, or a dumbed-down way of explaining what they do/provide. It makes it hard to market.

And lastly the confusion over what an ITSP is. Here in Tampa I have listened as one ITSP knocks another. That doesn't help at all, especially when the sales person doing it has clue none anyway. The ocean has to be raised witha discussion about why buying Voice over FiOS is not as advantageous for the business owner as Hosted PBX. 

Case studies like Forbes' article will certainly help sell more lines.

When selling VoIP, the conversation should be about productivity, reliability, and security not cost savings. In a poll, VZB "was the surprise top finisher in Infonetics Research's first North America Business VoIP Services Leadership Matrix in both IP Centrex (hosted IP services) and IP connectivity, Infonetics said today."  Main factor: reliability and financial security of VZ. NGT, 8x8, and Cbeyond were next in the poll. "Comcast is moving up fast on hosted VoIP (IP Centrex) services." ITSP need to get a move on.

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.

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.

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).