Cognitronics Loss

I had to write this when I saw that Cognitronics lost money in its latest quarter. The company actually had a net loss of .8 million compared to 1.4 million a year earlier so they are slowly growing – or at least bleeding less money than a year ago.

The following statement from Brian Kelley in the Cognitronics release struck me:

"The telecommunications marketplace continues to make headlines in 2005 as two more of the largest telecommunications service providers announced their intentions to merge. In the absence of real growth, consolidation rules," said Brian J. Kelley, president and chief executive officer of Cognitronics. "After years of excess infrastructure build-out, these service providers, our customers, continue to maximize the capacity of their existing network infrastructure. With limited investment capital, only the most urgent, transitional and cost-effective new technologies are ‘in demand’.

I don’t agree. There has been more growth in the service provider market in the last year than at any time in the last 4 years. The problem is not consolidation it is the fact that Cognitronics has gone dark in marketing and PR. I thought the company was gone I forgot about them. This is sad as I have visited their office years ago, written about them and they won a product of The Year Award from Internet Telephony Magazine just after 9/11. Brian Kelley is one of the nicest guys in the business.

But being a good person won’t win you customers if they don’t know you.The problem is not excess capacity it is a lack of anyone knowing you exist anymore. Vonage, SunRocket, Time Warner, Cox, Time Warner Telecom (this is a separate company from Time Warner), the list goes on and on and on. These are all new players (I haven’t to checked to see if any of these companies are your customers but the point is there is massive VoIP growth taking place worldwide).

Brian, you are missing out on VoIP. You personally have a long history in telecom and few people have more experience than you do. I have written about companies still operating under the auspices that we are in 2003. Your company is a prime example. Darwin is at work and the environment has changed.

In general, companies still operating like it’s 2003 won’t be around in 2007.

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