Who Killed the VoIP Revolution?

A recent and very interesting article from Gigaom

Quote:

“VoIP is dead,” Skype General Manager of Voice and Video Jonathan Christensen declared at an industry conference a few weeks ago. He spoke figuratively, of course, but he may well have been right. While Voice-Over-Internet Protocol proponents had long promised a decade of creative destruction, they themselves appear to have become the victims. The full potential of a technology is not always realized once it converges with market forces. In this case, the gravitational pull of the incumbent local exchange carriers (ILECs) has always proven difficult to resist. Most of the VoIP industry, while loudly proclaiming the SIP era as the beginning of the end for monopoly communications, secretly courted the incumbents in hopes of profiting from replacing their long-amortized investments in the fixed-line business. By tying their fortunes to the whimsy of the ILECs, many of the upstarts suffered, destroying billions of dollars in shareholder value in the process. Recently PulverMedia, which spurred the VoIP crowd and rode its financial crest, shut its doors amid a swirl of controversy. As of this writing, Sonus Networks, once a high flier at $95 per share in 2000, trades at about $2.29. Even Cisco has thrown in the towel, discontinuing its BTS series of softswitches (which provide the routing logic for VoIP networks). These dismal stories perfectly mirror the ride of the VoIP industry in general.

The Full story is at http://gigaom.com/2008/11/02/who-killed ... evolution/

Ian Andrew Bell is a reformed telecom executive, and creator of the team management service rosterbot.com

Reply from dean on Nov 03, 2008 - 12:30 PM

I have to agree. In particular:-

Quote:

By going after low-hanging fruit and forcing their innovations to be defined within the walls of the PSTN, the vast majority of VoIP companies voluntarily muzzled their own revolution and ultimately cost their investors billions.

It is a lack of innovation that will kill a VoIP startup. As Jeff Pulver put it in interview "they're all just noise".

You can't compete with the incumbents at their game and on their home turf. You have to move the goalposts and create your own playing field. Skype are the only startup so far to do that succesfully (ignoring the video conferencing players like SightSpeed). Their realisation was that users wanted presence-based Instant Messaging that worked through firewalls; their genius was the way it was built on a peer-to-peer network architecture removing the need for expensive server clusters.

I still think there's business to be done in:-

1. Hosted PBX's (for disaster recovery and home working alone this has incredible value for the SME).

2. Bundled broadband/voice packages. Peter Gradwell is the only person in the UK I can see that is all over this one.

3. Click to Call. I still believe in that space for eCommerce.

4. Cheap conferencing services (the hosted PBX market is best placed to take that).

5. Value added services. Take voice and add some secret sauce that solves a real problem. I can see this taking place in niche markets (specialist services) rather than the mass market.

6. BYOS - Bring Your Own Software. Platforms like Ribbit and Pacifica enable the niche markets to regain control of their voice services by being able to build their own applications which sit of top of a pre-existing network. That enables them to solve their own problems and therefore overlaps somewhat (and competes) with 5 above.

7. The thing no-one has thought of yet. There will be another Skype, we just don't know what it will be. When it comes along it will drive a new market and 100 start-ups will follow in its footsteps. 2 or 3 will succeed. 1 or 2 will be bought by the incumbents and the remainder will niche themselves into markets that the incumbents cannot support or don't want to support.

Reply from rgower on Nov 03, 2008 - 08:18 PM

Has there ever been a VoIP revolution?
Yes, there have been a few demonstrations, perhaps the occasional sporadic and un-organised unruliness, but certainly no equivalent to rank with storming the Winter Palace.

To be honest- For all its claimed superiority, VoIP is a long way from being ready to mount a 'popular' revolution. It is still too complicated and unreliable to let people near it.

Reply from middletn on Nov 04, 2008 - 07:26 PM

Hogwash, VOIP isn't dead, it's like saying TCP/IP is dead, it's just that it can't be sold as a technology anymore for technolgies sake. I remeber back in the late eighties implementing a TCP/IP stack on Windows 3.1. Absolute nightmare to configure and there were lots of companies looking to make money out of their versions.

I DO agree that selling VOIP as VOIP is over, but then anyone with a little sense already knew that anyway. In my view VOIP is the glue that enables you to do other things that ARE of value to the customer. The race to the bottom of the cheap minutes pile is pointless as everyone loses, but those who lost their shirts are the ones that used that as the USP of VOIP. All they were doing is trying to replace like for like as far as the customer was concerned, only cheaper. What voip needs now is the 'WWW' application which made TCP/IP the defacto protocol. It will happen, just not sure what form it will take.

Regards

Reply from ianplain on Nov 04, 2008 - 07:44 PM

Quote:

I remeber back in the late eighties implementing a TCP/IP stack on Windows 3.1. Absolute nightmare

In the late 80's it must have been

Reply from paulg on Nov 05, 2008 - 12:36 PM

Trumpet Winsock?

Reply from mikem on Nov 05, 2008 - 04:28 PM

ah trumpet winsock........



<AutoEdit By System>Please do not post ALL CAPS. Thanks </AutoEdit>

Reply from middletn on Nov 06, 2008 - 10:48 PM

That be the one, and a few others too. As I recall Trumpet was free or shareware

Reply from dibsmft on Nov 07, 2008 - 12:19 AM

I think Trumpet was shareware. When I was using Windows 3.0 it gave problems and I upgraded to Windows 3.1 and then it worked OK. There are still a few machines using Windows 3.1 on campus attached to old data collection devices and the like. I guess they use Trumpet. At that time I think I was logging in from home to the mainframe at 300 baud using a 5 line window for editing on an Exidy SOrcerer. How things have changed.

I think Voip will continue to grow in small business and in the institutional network area. In Canada, at least, for the general phone user the costs have fallen so much for long distance (eg. for me $1.50/min to about $0.12/min for the same call) with Bell that people will not change....there is very strong inertia in play there.

Reply from middletn on Nov 07, 2008 - 05:49 PM

In the UK, we've got Annex M comming on-line slowly, this provides 2mb each way for around 100 pounds/month. This will allow you to drive around 20 calls at alaw. So for a business with 20 PSTN lines at say 12 pounds/channel that's quite a reasonable saving(~1,700/year) In times when every penny counts, that's not to be sniffed at.

Regards

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