The Top 25 Innovations of 2007 and a partridge in a peartree

Well its been too long since I have posted something. I have been so busy with Galaxy Telecom that I haven't been able to update The VoIPBiz nor even look at it. Hopefully my faithful blog readers haven't cared too much.

Since 2008 is fast approaching I thought it would be good to follow in the footsteps of every TV station and countdown the Top 25 Technology Innovations of 2007. Although, people wouldn't call me the biggest Microsoft fan, they are of course number 1 in terms of what the product they have released this year.

1. Microsoft Office Communications Server 2007: Though far from surprising, the official October launch of Microsoft's Office Communications Server 2007 was a huge step forward simply because it made real the possibility that voice will someday become just another application running on corporate networks. As such, the announcement forced enterprises and vendors alike to get serious about their responses to a game-changing question: whether stand-alone PBXes will even be necessary in the future.

2. A New Kind of Internet Calling Box: Ooma Inc.'s slick $399 appliance got a lot of free publicity by upsetting fans of PhoneGnome, who considered it a flashy copy of their favored Internet calling box, even though the two are only superficially similar. Ooma works by using the Internet to connect to Ooma boxes in other parts of the country and placing calls through those users' local phone lines. Oh, and spokesperson Ashton Kutcher added a bit of publicity as well.

3. Erasing the Line Between Hosted and Premise-Based IP PBXes: For SMBs (small- to medium-sized business), the choice is often between hosted VoIP services and premised-based PBXes. Switchvox decided to make its premise-based IP PBX software available for hosted services as well. Thus, when small companies outgrow the hosted solution, they can transfer all their settings, IVR (Interactive Voice Response) menus and messages to their own premised-based PBXes with no trouble.

4. Hosted VoIP Without Per-Extension Charges: Hosted VoIP at $50 per extension, per month is a great deal for small businesses until they grow large enough to have extensions in rooms where people rarely make outside calls. Then, each of those extensions wastes about $49 per month. Junction Networks charges a flat rate for the entire business — no matter how many extensions, plus the actual cost of calls.

5. Appliances to Make Open Source Easier: Open-source IP PBX software suppliers like Digium Inc., Fonality (trixbox) and Pingtel Corp. have been making it a lot easier to get their products up and running by selling low-cost, highly reliable "appliances" loaded with the software. It saves VARs (value-added resellers) and other customers the trouble of shopping for suitable servers. It also, of course, boosts the software suppliers' revenues.

6. Low-End Desk Phones Get GUIs: IP desk phones with GUIs aren't a new feature for 2007, but there has been a lot of progress in bringing high-end features to low-end phones. In March, for example, Polycom Inc. rolled out the SoundPoint IP 320, which features full duplex audio, echo cancellation, noise reduction, LCD readouts and an integrated PoE (power over Ethernet) port at a low $139 price.

7. Text-Message Control of Hosted IP PBXes: One of the nice things about IP PBXes, hosted or premise-based, is how users can do things like set up call forwarding, launch conference calls and manage their address books, all from remote locations. But if users are trying to do these things via a cell phone from overseas, for example, they need to either use high-end handsets running special client software working through an overseas data plan, or call in at several dollars per minute and go through a touch-tone menu. It would be a lot cheaper if they could use text messages instead. If they use VoIP Logic LLC's hosted VoIP, they now can.

8. Enterprise Fixed/Mobile Convergence Without Carriers' Help: Maintaining that crucial customer call during the all-important walk from the car to the office got easier this year with IP PBX vendors' introduction of features that hand off calls on dual-mode cellular/wifi handsets from cellular networks to enterprise wireless LANs. They work by establishing parallel calls on both networks and terminating the one that's no longer necessary. Siemens AG, Avaya Inc.and Divitas Networks all offer products that perform this service.

9. Taking the Worry Out of the VoIP Transition: One of the biggest factors keeping small businesses from moving to hosted VoIP is concern about Internet call quality. RingCentral Inc. overcame that barrier by using VoIP switching, with all of its features and functions, but delivering calls to and from its customers over traditional PSTN (public switched telephone network) lines. In early October, RingCentral added Internet call delivery under the name DigitalLine VoIP Service. That means that the company's customers can keep using PSTN delivery until they feel comfortable relying on Internet VoIP for all their telephony needs — if they ever do — and only then make the switch.

10. Banking Your Phone Number: A lot of companies will give you phone numbers as part of their service so you can have calls to those numbers forwarded to any landline or mobile numbers you wish. In July, Boston-based RNK Communications Inc. began a service that allows users to simply buy their existing phone number and keep it forever, enabling them to forwards calls wherever they want without having to buy any of the other voice-mail or calling plans that other services require. Logically enough, RNK Communications calls its service the Phone Number Bank.

11. Ads That Complement Your Conversation: It offers free Web calls, but Pudding Media Inc.'s real business is using sophisticated software to extract keywords from the conversations it carries, then delivering relevant ads to the callers' Web browsers. Mobile voice services are a future target.

12. Making Phone Calls Via Email: If you know someone's email address, you can call them. Enter the person's address in a form on Jangl Inc.'s Web site, and the service will immediately give you a number that you can use to call that individual. First, you leave a message, which Jangl emails to the person, along with a number that they can use to call you. The two of you can use those two numbers to talk to each other for free, forever, without ever knowing each other's real numbers. Jangl also gives both parties the ability to block each other, also forever, with a single click. Just the thing for calling people you're not sure you want to remain friends with. Jaxtr Inc. has a similarly anonymous service based on click-to-call widgets.

13. Call-Through Instead of Callback: There are all kinds of callback services that let you enter two numbers on a Web site — yours and the one you're trying to call — for cheap overseas conversations. The service rings both numbers from local exchanges and connects the two calls via cut-rate international circuits. TalkPlus Inc., however, can also give you a temporary local number to call rather than insisting on calling you, in case you're on the road, stuck behind a hotel switchboard or using a client's office PBX that wouldn't know what to do with an incoming callback call. Client software on mobile phones can even make the initial local call for you.

14. End-to-End VoIP Quality Testing: A typical VoIP-quality testing service might measure the performance of an IP call in terms of jitter, latency and packet loss, then conclude that voice quality is perfect. But if the last-mile infrastructure between the customer's premises and the IP backbone is less than perfect, the network may be doing a perfect job of delivering hideously distorted sounds encapsulated in VoIP packets. In March, Keynote Systems Inc. announced a service that measures the quality of actual calls between apartments in key cities in order to provide real-world data about which VoIP sounds best.

15. Google Talk for Desk Phones: A lot of enterprise telephony systems let you click a name on your PC screen to call a contact, rather than forcing you to dial your phone manually. But Avaya added the ability to make the call via Google Talk, saving users all kinds of money by sending the call over the Internet rather than over the corporate phone system. So not only do users not need a handset the way they usually do with Web telephony, they can even use their speakerphone to let everyone in the office hear how good Internet phone calls sound.

16. Open-Source Community as Free-Calling Zone: When Fonality brought out three "Pro" versions of its trixbox open-source Asterisk IP PBX software, it saved users the need to sign up for Skype to cut their long-distance bills. All three versions come with a service called trixNet, which lets users call each other for free over the Internet. The users needn't belong to the same company or even know they're both using trixbox. The calls fall back to the PSTN when Internet conditions are not very voice-friendly.

17. Lower-End IP PBX/CRM Integration: More and more low-end IP PBX manufacturers boast of integration with CRM and (customer relationship management) applications such as Salesforce.com and SugarCRM. When calls come in, screens pop up with information like the last time the customer called, who they talked to, and what they bought or requested. But why should only big companies be able to pretend they remember all their customers? Switchvoxtrixbox come immediately to mind as vendors who extended CRM integration to lower-end IP PBXes, while Epygi Technologies Ltd. announced SugarCRM integration but doesn't focus on it in its product literature.

18. Click to Be Called: First, you embed a simple URL — www.phone-me-now/ plus your business phone number — in your Web site, email message or even a document you're sending someone. The viewer or recipient clicks the URL, enters their phone number and receives a call. This service comes from ifbyphone, which has also simultaneously called you and connected the two calls to make it seem that you have just called your potential customer. It's superior to click-to-call technology in a big way: The clickers needn't have a handset connected to their computers to talk but need merely be near their phones. No HTML coding is required. Here, too, there are similarities to jaxtr's widget-based "click-to-call-me-free" service.

19. Bringing Skype to the Office: Wouldn't it be nice if you could use a four-digit extension number to call a colleague on Skype halfway around the world? If you have an IP PBX, you now can. Stonevoice, an Italian company, introduced SkyStone, a software gateway that lets you make Skype calls through an IP PBX just like you would any other call. It can also route incoming Skype or SkypeIn calls through the PBX's IVR system.

20. Turnkey PBX-to-Skype Gateway: The other way to make Skype a part of your office is through a hardware gateway. VoSKY exchanges, comprising gateway software running on standard Windows servers, connect on one side to the Internet and the other to your IP PBX, providing a dial tone and other things necessary to make the PBX think it's talking to Ma Bell instead of Skype and the Internet. VoSKY introduced a turnkey rack-mount version in September.

21. Hosted Call Centers: capabilities, with features such as flexible routing to agents, call barging by supervisors, call recording, in-queue announcements, and integration with CRM packages and services. So it made sense that in August, Even low-end IP PBX vendors are touting their call-center8x8 Inc., the leading provider of VoIP services for small businesses, integrated its Packet8 hosted IP PBX with Contactual Inc.'s hosted call-center service. The move further expanded the range of big-company VoIP-based capabilities small businesses can use without having to install anything but IP phone equipment.

22. Skype Wifi Phone and Portable Hotspot: It's nice to have a Skype wifi phone, so you don't have to find a hotspot, crank up the laptop and plug in the headset every time you want to make a call while on the road; it's much better to have the phone come with a portable hotspot. Panasonic Corp.'s KX-WP1050 with "Executive Travel Kit" does just that. It plugs into your hotel room's Ethernet jack and lets you pace your suite while thrashing out tough problems just like you do via your speakerphone back in the office, but much cheaper than you could with that other pacing device — your cell phone.

23. Skype Office Desk Phone: If you’ve decided to run your entire business on Skype, IPEVO Inc.'s Solo will let you disguise that fact if you want to. With features such as color LCD, echo cancellation and a speakerphone, it holds its own against any good IP desk phone.

24. Cordless Phone for Skype and PSTN Calls: It's sure inconvenient to have one phone for PSTN calls, and another — whether software- or hardware-based — for Skype calls. The Philips VOIP841 combines both types into one DECT (Digital Enhanced Cordless Telecommunications) cordless handset. A base station plugs into both the Internet port and the phone wall jack, letting you choose which kind of call you want to make by simply pressing a button.

25. Unique Numbers for Cheap Calls: Here's another way to get away from receiving calls from callback services in order to make cheap, Web-activated overseas calls. Simply use the new JAJAH Direct service, which provides you with a unique local number that you can always dial to reach a specific overseas number. Just put the number in your address book under your friend's name and forget about international dialing prefixes, country codes, PINs, account numbers and pricey minutes.

Mitel and Inter-Tel Announce Completion of Merger

Mitel Networks Corporation and Inter-Tel (Delaware), Incorporated (NASDAQ: INTL) today announced the completion of their merger. As a result of the merger, Inter-Tel is now a wholly-owned subsidiary of Mitel® and Inter-Tel stockholders will receive $25.60 in cash for each Inter-Tel share they held prior to the closing.

"We are delighted to complete our merger with Inter-Tel," said Don Smith, CEO of Mitel. "Inter-Tel’s people, products, managed services and partnerships complement those at Mitel and will enable us to accelerate our growth strategy by extending our small/medium business (SMB) leadership position and continuing our expansion into the large business sector."

The company will now be #1 in the North American SMB market, #2 in the Western European IP lines shipped, the overall leader in the U.K. communications market and continues to grow its operations globally. With three trusted brands (Mitel, Inter-Tel and Lake), the company offers customers a broad choice of solutions from the very small to the very large, from IP enabled to pure IP unified communications, from standard solutions to tailored, from single site to multi-site and from outright capital purchase options through sophisticated managed services.

“We are extremely pleased to complete this transaction today, which we believe is in the best interests of Inter-Tel stockholders,” said Norman Stout, CEO of Inter-Tel. “Our new company will be a formidable industry player in the U.S. and across the globe, and as part of the Mitel team, we look forward to continuing to provide exceptional products and services to our mutually expanded customer base.”

Mitel will maintain Inter-Tel’s Arizona headquarters, which will become the center of operations for the combined U.S. business and serve as an important center of R&D excellence.

“We have common entrepreneurial roots, a shared vision and the breadth of solutions and technology to address the diverse needs of the rapidly changing communications market.” Don Smith concluded. “As we come together we will deliver innovative solutions and managed services for our existing customers and channel partners, so that no one is stranded or forced to consider an alternate vendor. We intend to be the logical choice for both existing and new customers.”

As a result of the acquisition, Inter-Tel common stock will no longer be listed on the NASDAQ Stock Market as of August 16, 2007.

TKO for Vonage?, ATandT sues Vonage

Could this be a TKO for Vonage?

I am not saying that they in fact have been knocked down by Sprint and Verizon, but will they last because of these jealous, whinny incumbents? Despite Vonage getting hit twice they have managed to survive, with dignity I must say. Any other VoIP Provider would have crumpled under the gripping hands of the major Telcos. So why is AT&T jumpoing on the "LETS GET VONAGE" Band-wagon?

One Blogger wrote. "The obvious explanation is that AT&T is worried about losing control of its intellectual property. If a business doesn't defend its property from even the most minor misuse, the theory goes, it might lose its right to defend it. It's not unlike protecting a trademark by pouncing on every instance of improper or generic use. Anything less could be a betrayal of management's responsibility to shareholders." - I completely agree but when did telephone companies begin to forget about what Communications is all about. Is it not about the consumer, IT IS!! Every Incumbent Telco has one way or another, taken advantage of their power, where are we Mexico? And all this about intellectual property, it is VoIP. Have you read some of these patents, they are bullshit. They are so confusing so that they don't make any sense, they ILECS don't even understand them.

If it is about Businesses trying to protect their intellectual property, however, one might expect ATandT to also pursue its patent rights with every small VoIP provider in the world. It's hard to believe that all providers would be free of at least some such infringements; most have fewer engineering resources than Vonage and undoubtedly less ability to develop their own technical planning and configurations.

Of course, ATandT might even now be pursuing such small VoIP providers behind the scenes. The company had reportedly negotiated with Vonage for two years before filing suit, but the first news of this broke in mid-October 2007, when ATandT said that it had no choice but to sue because the talks were going nowhere. So the company may be negotiating with smaller providers and may conceivably have already settled with some of them. Damn BULLIES!

TeleGeography analyst Paul Brodsky finds the timing of the suit "suspicious." It came shortly after Vonage settled with Sprint for $80 million and after an appeals court sent one of the verdicts in Verizon's suit against Vonage back to a lower court for reconsideration, while affirming two others. Whatever the official reason, the timing was certainly bad for Vonage. "I think there was a little optimism that they may have finally cleared themselves of some of these patent issues," Brodsky said. "Then ATandT comes along and kicks sand in their face again."

Wake up and smell the coffee, obviously ATandT has timed this dangerously for Vonage, right after going up against Verizon and Sprint. Again this is perfectly demonstrating that Dinosaur phone companies are more concerned with public image, throwing their weight around and money, not the comsumer. Honestly, does Vonage pose that big of a threat to ATandT?

Your thoughts?

vonage patent lawsuit, finally settled???

Vonage Holdings Corp., the, ahem, provider of Internet-based telephone service, said Thursday it has settled a patent lawsuit brought by Verizon Communications Inc. for a maximum of $120-million.
The lawsuit, along with two filed by other phone companies, had weighed heavy on Vonage's future. The company's service enables subscribers to connect their phones to their broadband connections for about $25 a month using a "Vonage" adapter - I think I smell another lawsuit coming on unless anyone has not patented the adapter yet :)
After setbacks in the litigation with Verizon, which began in June 2006, Vonage put $88-million in escrow. The settlement caps any payouts Vonage will make on top of that amount at $32-million. If Vonage wins a rehearing on either of the two patents in question, its total payout will be $80-million.
The settlement was announced just after the 4 p.m. stock market close, which saw Vonage shares fall 7 cents to $1.53. In after-hours trading, the shares jumped 70 per cent to $2.60.
“We believe that the settlement terms may allow Vonage to avoid bankruptcy — at least for now,” the telecom analyst team at brokerage Stifel Nicolaus wrote in a research note Thursday.
In March, a jury held that Vonage had infringed on three patents and awarded Verizon $58-million in damages, plus a royalty on future revenues. In September, an appeals court sent the remaining two patents in dispute back to the lower court for retrial.
“This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers,” said Sharon O'Leary, Vonage's chief legal officer.
The settlement is a major step forward for Holmdel, N.J.-based Vonage, which earlier this month settled another patent dispute with Sprint Nextel Corp. for $80-million.
The settlement does not put Vonage's legal troubles in the past, however. AT and T Inc. sued Vonage last week, also for patent infringement. Way to go incumbents, I am so disgusted. There is enough to go around, STOP WHINNING!!!
“There's always something coming out of the woodwork in terms of lawsuits,” said analyst Stephan Beckert at TeleGeography Research. “That probably says more about the patent system than it does about Vonage.” - I couldn't agree more.
He said Sprint's and Verizon's success in their suits may have encouraged AT and T to get into the "game".
“I guess it's good to settle a lawsuit and get it behind you, but (Vonage) settled for really big numbers,” Beckert added.
Vonage had a substantial war chest, thanks to an initial public offering last year at $17 per share that drew in more than $500-million but quickly turned into an embarrassment when the stock plummeted.
The legal challenges have scared off customers and stalled Vonage's growth. It now has about 2.45 million subscribers. The attractiveness of Voice over Internet Protocol, or VoIP, provided by independent companies shrank further this summer, when Vonage rival Sunrocket suddenly shut down, stranding subscribers. But cable companies have had great success signing up their video customers to VoIP (Galaxy Telecom, I know, shameless plug)
Vonage subscriber Randy Borow in Lisle, Ill., said he hasn't really worried that the company would founder because of the lawsuits, but he's heard of subscribers who have fled.
Borow said he's pleased to have cut his phone bill by more than half by switching to Vonage from AT&T a year and a half ago.
“The biggest threat these landline companies is obviously VoIP service,” Borow said. “They look upon Vonage as a huge threat ... so they try to sue them out of existence.”
In court, Verizon argued that Vonage, while using Verizon's patented technology, had taken hundreds of thousands of its customers.Of the $120-million maximum payment from Vonage under the settlement terms, $117.5-million would go to Verizon and $2.5-million to charities.

US VoIP Market still soaring...Europe even more!

The number of US consumer VoIP subscribers soared from 6.5 million in mid-2006 to 11.8 million by the 2nd quarter of 2007, according to TeleGeography's US VoIP Research Service. TeleGeography projects that the number of US VoIP subscribers will rise to 23.3 million by 2011, driven chiefly by the strong growth of cable providers' IP telephony offerings. Nevertheless, US VoIP subscriber growth is falling well behind the blistering pace set by European VoIP service providers. Both markets experienced similar growth patterns over the first few years of development, but began to diverge in 2006. Several factors help account for Europe’s much more rapid VoIP service growth, including freer access to incumbents’ local copper loops, more aggressive competition and pricing, and the active participation of incumbent operators such as France Telecom, Deutsche Telekom and BT in the VoIP market. In Europe, incumbent service providers accounted for 26%of VoIP subscribers, while in the US, AT&T, Verizon and Qwest have remained largely on the sidelines. If these factors remain in place, TeleGeography projects that by 2011, VoIP penetration in Europe will be approximately twice as great as in the US.

Google takes another baby step into the mobile market

Google (GOOG) has bought Jaiku, a Finland-based mobile IM and presence company. The news just broke, where else, but on Jaiku. The terms of the deal were not disclosed.

The details of the deal are on the Jaiku blog, and the company has put up FAQ for current users. This is indeed good news for the small Jaiku team, and another piece of the Google Phone Puzzle. Activity streams and mobile presence are important areas where we believe Google can add a lot of value for users. Jaiku’s technology and talented team are a great addition to Google’s current application and mobile teams

At first glance, this is an excellent acquisition on the part of Google. It is obvious that Google is trying to enter the mobile and VoIP Space, I am just trying to figure out why. I can't wait to see what happens next, by that I mean, what company they will buy next.

John Shapiro sells out to Network Engines

If you haven't been in the telecommunications industry for awhile you might not know Jon Shapiro, the founder of Alliance Systems. Alliance Systems was responsible for building bullet-proof communications servers and has great industry partnerships with vendors like Interactive Intelligence, Audiocodes and Dialogic. Based in Plano, Texas, Alliance Systems provides server appliances and enhanced support services for wireless, VoIP, contact center and enterprise communications solutions. Similar to Network Engines, the majority of Alliance Systems' revenue comes from services to OEM customers. In its fiscal year ended December 31, 2006, Alliance Systems had more than 250 active customers, only two of which contributed 10% or more of revenue, one at 15% and the other at 10%. For the 2006 fiscal year, revenue was approximately $102 million and operating income was approximately $3.2 million. For the nine months ended September 30, 2007, Alliance Systems had unaudited revenue and operating income of approximately $79 million and $2.0 million, respectively. Its largest customer contributed only 10% of its revenue for the nine-month period.

Network Engines, Inc. (NASDAQ: NENG), a leading provider of storage and security server appliance products and services, today announced it has entered into a definitive agreement to acquire privately-held Alliance Systems, Inc., a leading provider of server appliances and computer infrastructure supporting telecommunications and enterprise communications solutions. Valued at approximately $40 million, the transaction will be funded through a combination of approximately $35 million in cash, which includes the payment of certain of Alliance's debt obligations, and approximately 2.7 million shares of Network Engines' common stock.

Through the acquisition of Alliance Systems, Network Engines enters new vertical markets and anticipates leveraging a broader range of capabilities to address market needs for converged solutions. Network Engines also expects to realize economies of scale based on similarities between the two companies' business models, their compatible approach to development of system solutions, and their complementary focus on OEM customers. Furthermore, it is expected this transaction will diversify Network Engines' customer base and accelerate its progress toward achieving its financial objectives.

Greg Shortell, President and Chief Executive Officer of Network Engines says, "We are pleased to partner with an established, profitable company that is highly complementary to Network Engines' business, Alliance Systems' strong position in telecommunications complements Network Engines' expertise in storage and security. These markets are experiencing a convergence of technologies, which creates new applications. We believe that Network Engines is well positioned to meet the industry's needs in this exciting growth opportunity, and expect the acquisition will allow us to better serve customers, while creating significant value for our shareholders."

Alliance Systems is expected to add approximately $100 million to Network Engines' annual revenue and significantly diversify its customer base.

Voange and Sprint finally settle dispute

Internet phone company Vonage Holdings Corp. and Sprint Nextel Corp. have settled their long-running patent argument and inked a licensing deal under Sprint's Voice-over-Packet portfolio.

A jury in the U.S. District Court in Kansas City, Kansas, on Sept. 25, found that Vonage infringed six Sprint patents, and Vonage was ordered to pay Sprint Nextel 69.5 million U.S. dollars in damages. Vonage said at the time it didn't expect the decision to have an adverse effect on its business because it had deployed workarounds for the two patents in question for some time.

Today Sprint Nextel and Vonage announced that they have settled their patent dispute and are ready to move onward and upward. Not only have they settled their dispute, but they will start working together! The companies entered into a licensing arrangement under Sprint’s Voice over Packet (”VOP”) patent portfolio. Additionally, Sprint will license Vonage their VOP portfolio, which consists of over ”100 patents covering different methods, components and systems that efficiently connect telephone calls between a regular telephone network and a packet-switched network such as the Internet.”

Monday's settlement agreement resolves all claims related to this dispute, the companies said.

“We are pleased to resolve our dispute with Sprint and enter into a productive future relationship,” said Sharon O’Leary, Vonage chief legal officer.

“We view this settlement and licensing agreement as a validation of the strength and breadth of our patent portfolio,” said Harley Ball, Sprint Nextel’s vice president of intellectual property. “This is an affirmation of Sprint’s research and development and a testament to the rich history of innovation at Sprint Nextel.”

Sprint also agreed to license Vonage its VOP portfolio, which includes more than 100 patents covering different methods, components and systems which connect telephone calls between a regular telephone network and a packet-switched network such as the Internet.

The companies’ new agreement is valued at $80 million, which includes a one-time payment of $35 million for the past use of license, $40 million for a fully paid future license, and $5 million in prepayment for services. Given Vonage’s headaches in the past, it will be nice for them to at least put this behind them and move on to the business of providing services.....well until something else happens....

I finally joined Technorati, what the hell took me so long?!

Technorati Profile

"Vonage" - Does that mean bad news for other residential VoIP providers?

Vonage, already struggling from a series of setbacks, has just taken another two huge body blows — one by the U.S. Court of Appeals on behalf of Verizon, and the other by Sprint Nextel. At first glance, it looks like the old-school phone companies are not only fighting back, but winning. But is that really the case, and if it is, what does that mean for other VoIP providers?

First, the news. The U.S. Court of Appeals upheld a previous decision to award an injunction against Vonage's use of technology based around two patents held by Verizon. A third patent was also involved, and in that case, the verdict is not yet final — it has been sent back to the original court for further clarification and a recalculation of awards and damages associated with the verdict. That last part, at least, is a little good news, since it suggests that the $58 million in damages plus 5.5 percent royalties on future sales that was originally awarded may be reduced. This came one day after a New York court reached a similar decision in a suit brought by Sprint Nextel, in which it awarded the company damages of $69.5 million and 5 percent royalties on future Vonage sales. This award is being appealed, and it may yet be set aside.

The result was a drop in stock price for Vonage to just more than $1, as well as a suspension of trading. Less than 18 months ago, Vonage went public with an initial share price of $17. That's a huge drop and a huge blow to the company. In addition, if both lawsuits end up where they stand right now, Vonage is going to be paying 10 percent of everything it makes to two of its biggest rivals, not exactly a recipe for success.

What Next?

Despite a giant customer base, a well-known brand and, yes, even some loyal customers, it is hard to imagine Vonage recovering from these blows. Instead, it is likely that its customers will drift away over the next two years. The big question: Where will they go? Probably in the short term, the most likely answer is to their local cable provider. One of the reasons for Vonage's early success was simply that cable companies weren't in the game. Now that they are and are offering VoIP service in combination with Internet and TV service (usually in the popular "triple-play" package, in which voice, Internet and TV service cost $100 per month), it is hard to see customers looking much beyond that easy, one-stop shopping. For the Cable companies that are not currently offering voice, they can start here - www.galaxytelecom.net (Please choose Tino Fenotti in the "Referred by" drop down menu). Yes, I know, a shameless plug :) Unfortunately, most cable companies have not yet gotten into the VoIP game, which in my opinion, they are not taking care of their clients. Smaller Cable Co's ought to step up to the plate and not have their base taken over. This is very serious and although you might not believe me I have heard this one before, "Well, I don't think I can compete with the incumbents." Are you insane???!?! Sure, just throw your business away, give it to the "big guys", just give up. Is that what you want me to say? How did you even start a business in the first place? Pull up your sleeves and get to work!! Sorry, I went off on a little bit of a tangent there.

The other question that has to be troubling the other (smaller) residential VoIP companies is whether or not these telco and cable giants are going to come after them next.

But there are two other groups that could see some success. One is the more edgy VoIP players that offer basic free services while charging for extras. This group is led, of course, by Skype but include tens — even hundreds — of niche players. And Skype, despite some recent bad publicity, is clearly making inroads. It now has 20 million registered users in North America, up from 10 million a year ago. Since the company makes the concurrent numbers of users at any one time public, it is easy to see that it now has more than 9 million callers actively using Skype at any moment. And Skype, like other client-based VoIP services and several cell-phone VoIP enablers like Truphone spring to mind), is moving relatively fast in terms of adding functionality and features.

Wifi VoIP

The other group is far less obvious — it's the mobile-phone providers. As more and more people abandon landlines altogether, mobile-phone companies are also stepping in to IP-based services to expand their offerings and reduce their costs. The previously mentioned Truphone is an example, having just demonstrated true VoIP calling on the Apple iPhone.

All of these players are just itching to step in and grab chunks of the lucrative residential phone pie. In fact, they already have much of it. So what's left for VoIP?

The simple answer is business. Business VoIP is a whole other kettle of fish. That market is changing rapidly, and PBX (Private Brach eXchange) services in particular are letting small companies look like big companies while still operating at small-company prices.

The more complex answer is in interconnecting everything. VoIP isn't going away; in fact, VoIP is rapidly being put inside every form of voice calling — from traditional telco to mobile phone to business PBX to voice services — if it isn't already there. It isn't VoIP that's in danger from a Vonage collapse — it's the idea that just changing from traditional telephone circuits to VoIP is all that it takes to make a new phone company.

Wirelss Industry secrets revealed!

Hello my devoted Blog readers. I am in currently in the beautiful, precious Mount Tremblant In Quebec, Canada for a convention. Please visit the link, this place is incredible but it is no Whistler in BC, obviously a non-biased opinion :) and instead of golfing on one of the most difficult courses in Canada I find myself blogging.

One of the keynote speakers was Dean Prevhost - Chief Strategy Officer of Allstream (I think because he has held over 10 executive positions at Allstream). He was speaking about the non-competitive cellular industry in Canada and our technologies. As you all may or may not know, the 2 largest carriers are Bell and Telus with Rogers (and Fido) following. Bell and Telus run on older technology - CDMA, very stable and a clear connection but it has limitations in regards to an Open Source Application architecture found in the Rogers GSM network. It isn't really a question of the world phone anymore but more of what the consumer can do using GSM Technology. Features and applications such as Multimedia, true mobility without roaming, as it is in Canada right now, the Bell Tower I am connecting to does not make a difference, I will be getting charged for roaming and long distance. I am willing to take the long distance charges (reluctantly) but roaming?!!?! I am connected to the same provider! Getting back on track, Dual-mode phone utilizing VoIP via a WiFi connection and a GSM phone are already in Asia and Europe. What will Telus and Bell do then. I did hear that they are going to offer some models that are dual mode with GSM so that they can offer their customers this product but that means that they will have to go to the competition. You think Bell and Telus want that to happen?? yeah right, Telus will not even put in a SIP Backbone right now to offer Residential IP Services because they are making too much money off analog services.

The speaker from Allstream has stated that $14 billion dollars of wireless spectrum, just spectrum, not wireless services, towers all hardware but just spectrum is up for sale in 2008. Basically, a $14 billion ticket to play in this wireless "lottery" is up for grabs. If we are so far ahead, like people have been saying then why would all this spectrum be for sale? Something is happening, Telus and Bell better think of something quick! LOL

Canada was once only six months behind the US, we are now an estimated 2 and a half years behind the US and 6 YEARS behind Europe. These incumbents are slowing this whole country down.

Prediction: Once this spectrum is sold to the highest bidder - they are going to build a GSM network and blow CDMA technology right out of Canada.

VoIP in the US on the rise! Behind Europe, of course.

Recent research from TeleGeography indicates that while the VoIP market in the US is most definitely on quick rise, Europe is leaps and bounds ahead of us. The total number of US VoIP subscribers nearly doubled in the last year, going from 6.5 million in mid-2006 to a whopping 11.8 million by the second quarter of this year. TeleGeography is projecting that VoIP subscribers in the US will reach a staggering 23.3 million by the year 2011, mostly due to cable companies jumping on the IP telephony bandwagon.

While the US VoIP market is going along at warp speed, Europe’s growth is even sharper, largely due in part to their aggressive pricing and by “active participation of incumbent operators such as France Telecom, Deutsche Telekom and BT in the VoIP market. In Europe, incumbent service providers accounted for 26%of VoIP subscribers, while in the US, AT&T, Verizon and Qwest have remained largely on the sidelines. If these factors remain in place, TeleGeography projects that by 2011, VoIP penetration in Europe will be approximately twice as great as in the US.”

‘VoIP service in the US has emerged as a mainstream service that is causing traditional service providers some headaches,’ commented TeleGeography analyst Stephan Beckert. “However, in Europe, VoIP could fundamentally change the structure of the fixed-line market.”

Skype has Worms!

Skype's image has taken another serious blow. On September 10, the Internet telephony company alerted users that a worm is loose in its service. The worm attacks Windows computers through Skype IMs (instant messages), with the cooperation of "careless" users. Fortunately, anti-virus companies already have solutions, and Skype has its own fix for the do-it-yourself crowd.

The worm arrives via a cleverly worded chat message, supposedly from an IM buddy. The message includes a link to what is apparently a JPEG file. In one example described on the Web, the name and path make the file appear to be an erotic image. Clicking the link produces a pop-up window asking to run a screensaver (.scr) file. Clicking the OK button loads the worm onto the victim's computer, which then sends the same message to that user's buddies.

The Skype Blog, which describes the worm and calls it "w32/Ramex.A," says that three anti-virus vendors have developed cures. F-Secure, Kaspersky Lab and Symantec Corp. have already updated their products to catch it. The same blog offers a manual fix, which it emphasizes is for experts only. It involves deleting five .exe files, as well as deleting all entries in a hosts file. The latter is necessary in order to get anti-virus updates to resume.

Enterprises have long feared the damage Skype hacks could do. Skype's peer-to-peer technology is particularly adept at sneaking through firewalls unnoticed. Its encryption also makes detection of damaging code especially difficult. On the other hand, its use of closely guarded proprietary technology makes it harder to hack, since there's no publicly available code for attackers to examine for weaknesses.

The extent of the damage the worm has done to users' computers remains unknown. It has already damaged Skype's reputation plenty, though, since it's the company's second serious reliability problem in a few weeks. Late last month, the service suffered an outage that lasted more than a day. That high-profile incident prompted much speculation about whether or not IP Telephony was right for Small-Medium Business. First off, this speculation is ridiculous, considering Skype is not a BUSINESS PRODUCT! and users who think that it is, you are DEAD WRONG! Sorry I get a little excited when VoIP users put every product in the same category.

Anyways, they are saying that this latest incident will make it all the harder for Skype to argue that it is in fact a Business-oriented VoIP Manufacturer. That makes the worm a real pest, given how hard Skype is trying to transform itself into a business tool rather than just a cheap way to call friends and family around the world. For a company like Skype, it is hard enough already, almost impossible, with this happening it will be a mission that will never be completed.

"I Got Worms" -Jim Carrey

Back from Mexico - Let's talk Telmex and Carlos Slim

Hello all. I realize that I haven't blogged in awhile but I just got back from 2 weeks in Mexico on Business and thought I would write something on the monopolized telecommunications industry in Mexico. Of course, there is no one else to write about, but Mexico's very wealthy Carlos Slim. In my dealings with Mexican telecommunications companies, trying to get a very small piece of the pie, I have heard something very strange. If VoIP gets too big, Telmex is going to block ports, re-program their DSL modems, or do whatever it takes to block voice packets from traveling over their internet. Obviously they would have to be tracking all the traffic (RTP) and crunching the packets to the point where the are intelligible or to the point where there is no communication whatsoever. My GOD, is this even legal? Then again it is Mexico, right?

In addition to this posting I thought it would be relevant to write about the man himself Carlos Slim..........

Mexican businessman Carlos Slim is now said to be the world's richest man. He is Latin America's leading business mogul, acquiring telecommunication assets and banking and retail businesses throughout the region and beyond. His massive increase in wealth in recent years should further increase public scrutiny of Slim and his business empire, particularly within Mexico.

For several years Carlos Slim has been Latin America's most visible business leader. He is best known for his telecom business, which controls an increasing share of the region's fixed-line, Internet and wireless markets, and has blossomed thanks to a series of acquisitions. In Mexico, Slim's most important market, his telecom empire has faced criticism for high costs. Slim-owned company profits also benefit from his minimalist management style that prioritizes high profits and low overheads.

Slim's telecom empire essentially consists of two companies. In 1990 he acquired Telefonos de Mexico ( Telmex) Mexico's main telecommunications company and until then a government monopoly. Slim and his minority partners (SBC Communications and France Telecom offered the highest bid in the privatization process and got control of Telmex for what turned out to be a bargain price of $1.7 billion. Probably more important than the price was a flawed concession, which has allowed Telmex to challenge successfully in the courts attempts from the Federal Competition Commission to limit its quasi-monopoly powers. It now controls about 20 million lines and manages over 85% of the Mexican market.

On the few occasions that Telmex made concessions to competition it has been as a result of pressure from the U.S. government. Slim not only quickly modernized the company, adding new services, but also exploited its market dominance. As a result, Telmex's worth, and his wealth, skyrocketed.

In 2001, Telmex created America Movil. Since then, the company has expanded into more than a dozen countries in Latin American and the Caribbean via a series of acquisitions from companies such as France Telecom and BellSouth. Today, the company is Latin America's largest mobile operator. Its largest unit is Mexico's Telcel, a market leader. America Movil also owns Telecom Americas, a holding company that includes stakes once held by Bell Canada and SBC Communications, and enjoys major holdings in Brazil. America Movil's main rival in Latin America is Spain's Telefonica. In Mexico, Telefonica remains a distant second to Telmex.

Apart from telecommunications, Slim has stakes in numerous other sectors, including major restaurant chains and banking entities in Mexico, such as Grupo Financiero Inbursa. Slim-owned businesses account for about one-third of Mexico's stock exchange. Throughout Latin America, Slim is developing a presence in transport and infrastructure. In 2005, Slim's infrastructure company, Impulsora del Desarrollo Economico de America Latina (Ideal), listed on Mexico's stock exchange. Ideal focuses on construction, water treatment, housing, roads, airports, health services and energy projects in major Latin American markets.

Slim has been careful not to openly support any political party and has not shown interest in seeking public office. He has been relatively discreet when wielding political influence, in contrast, for example, to owners of television companies, notably Televisa. His statements are followed closely, though they are frequently naive and ineffectual. He apparently considers that all investment expenditure is positive and has repeatedly stated that policies that aim for "stability" should be substituted for those that seek "growth."

Slim would probably rather have avoided being named the world's richest man because of the spotlight it puts on his wealth and business practices. He may eventually need to respond to growing criticism over his monopolistic telecom business and his unwillingness to redistribute more of his wealth. However, he will continue to fight to keep the market power he has so profitably exploited.

Google Phone?....What's next? A Google Car?

The Observer of London is reporting that Google might be working with HTC and mobile/telecom giant Orange to build a Google Mobile Phone, which could possibly have Google software inside the device, and would be able to do many of the web tasks smartly. The device, article speculates, could go on sale in 2008. (Of course, we would all have forgotten by then… if it doesn’t happen.) Orange and Google, both declined to comment.

Their plans centre on a branded Google phone, which would probably also carry Orange’s logo. The device would not be revolutionary: manufactured by HTC, a Taiwanese firm specializing in smart phones and Personal Data Assistants (PDAs), it might have a screen similar to a video iPod. But it would have built-in Google software which would dramatically improve on the slow and cumbersome experience of surfing the web from a mobile handset.

It would be interesting to see if this actually happens. Google, in recent months has become increasingly aggressive about its mobile ambitions, and is pushing into the carrier space, though there have been some snags.

Google Phone, if you think about it is a reasonable speculation. Google has been aggressive in developing location based services, has amp-ed up its local search and mapping services. In addition, it has also been mobilizing its applications such as GTalk and GMail. YouTube, the video arm of Google, is beginning to embrace the mobile ecosystem.

Normally, one would not spend too much energy on this bit of news. However, presence of Andy Rubin on Google campus gives us a reason to pause.

Who is Rubin? He was one of the co-founders of Danger, the company that makes the Sidekick devices. He sold his last company, Android to Google for an undisclosed amount of money, and he has been holed up in Mountain View, California campus of Google, doing something.

No one knows what, but since Android was focusing on mobile, it is safe to assume that he just might be involved in Android. Danger, as you might know has become a multi-million dollar business based off the “compress web and take it mobile” technology developed by Rubin and others. Business Week has reported hat Android was working on a cell phone operating system.

One source familiar with the company says Android had at one point been working on a software operating system for cell phones. … In a 2003 interview with BusinessWeek, just two months before incorporating Android, Rubin said there was tremendous potential in developing smarter mobile devices that are more aware of its owner’s location and preferences. “If people are smart, that information starts getting aggregated into consumer products,” said Rubin.

For Orange, this could be a valuable asset in its triple play ambitions. The company owns broadband businesses across Europe, and has access to 3G networks, and is owned by France Telecom. It could use Google’s web expertise to take on its rivals, by offering web-mobile hybrid phones, and at the same time get a slice of mobile advertising revenues. I know, sounds far fetched, but not out of the real of possiblity.

Regulation of VoIP Services

This news is a little old but I wanted to post it anyway. It is very important and like always when something better comes along, "they" have to try and stop it.

State Regulation of VoIP Services: Get Ready, It’s Coming
By Michael W. Fleming, Edward S. Quill Jr. and Brian McDermott

In July, in a hearing room at the Missouri Public Service Commission, state regulators will try to make the case that Comcast’s “Digital Voice” VoIP service should be regulated as a competitive telephone service.

If they succeed, the Missouri Commission may not only take a significant step toward establishing VoIP — or at least some types of VoIP — as a regulated service in Missouri, the commission also may set the precedent to allow the commission to collect significant penalties from Comcast. The regulators maintain that penalties should be assessed against Comcast for its provision of a regulated “telephone service” without proper state authority. And as much as the Missouri proceeding could result in a decision with significant business and regulatory consequences in Missouri, it may be only the tip of the iceberg as many more state regulatory commissions move to assert jurisdiction over VoIP providers.

Although VoIP long has been viewed by some as “unregulated,” federal regulation applicable to VoIP providers has been expanding steadily. The FCC already has extended three of its central regulatory programs to interconnected VoIP service providers. Interconnected VoIP service providers must comply with the federal wire-tapping requirements under the Communications Assistance to Law Enforcement Act (CALEA). They must comply with federal emergency dialing requirements so that subscribers can access the 911 networks. And they must collect and make substantial contributions to the Federal Universal Service Fund that provides subsidies to companies serving telephone subscribers in high-cost service areas (such as rural areas with low population density) and telephone subscribers with very low incomes. The FCC even recently has asked for comments from the industry about whether VoIP providers should pay regulatory fees to the FCC.

By contrast, VoIP providers haven’t been subject to many of the state rules and regulations that apply to traditional phone companies, such as state certification requirements. But that may be changing. In 2003, the Minnesota Public Service Commission tried to regulate Vonage as a telephone company. In its defense, Vonage claimed that its operations were “information services,” so that its operations were subject only to FCC regulation and that as a result, states had no regulatory authority over Vonage’s VoIP services. Without determining the nature of the service, two federal courts and the FCC agreed on the grounds that, at least for nomadic VoIP services (which utilize a compact VoIP modem to allow portable use of the service), it is not possible to separate the interstate components of the service from the intrastate components.

While the Vonage decision forestalled the application of state regulation to nomadic services, it left unresolved the question of state regulation of fixed VoIP services. In the absence of a clear decision, many fixed VoIP providers simply took the position that the Vonage decision applied to them as well. Recent FCC and federal court decisions suggest, however, that the Vonage decision may not extend so far and that state regulation of VoIP may be permissible. For example, the FCC has stated that if a VoIP service provider has the ability to identify interstate from intrastate traffic, it would become subject to state regulation. Appeals to legislators to limit the authority of state commissions over VoIP providers have to date yielded few results. For the great majority of VoIP services that could be considered “fixed,” significant state regulation may be around the corner.

In light of these changes, many VoIP providers are considering what state regulation might mean. The answer likely will be drawn substantially from the regulations that now cover wireline competitive telephone carriers. Competitive phone companies generally are required to obtain authorization from state regulatory agencies prior to providing service, file tariffs or price sheets of their generally available rates, terms and conditions, and comply with various state reporting requirements.

The news is not all bad for VoIP service providers because state regulation offers certain benefits. Certification as a competitive telephone carrier allows VoIP providers to gain additional valuable rights. For example, certified VoIP providers would be able to require interconnection of their networks directly to those of other carriers, to obtain certain rights to deploy facilities inside Bell company switching offices, to obtain telephone numbers from the telephone numbering administrator, and to lease certain transmission circuits at cost from the Bell telephone companies. In many cases, a VoIP service provider certified as a carrier could exercise certain privileges on its own that it currently must obtain through another phone company providing wholesale service. Certified carriers also have a forum at state regulatory agencies to help resolve certain disputes with other phone companies, with an eye toward minimizing the disruptive consequences that might be felt by their customers, something Vonage might have found quite valuable in the midst of its patent dispute with Verizon.

In short, interconnected VoIP service providers already are subject to new and expanding federal regulatory requirements. State regulatory commissions are pushing to assert their jurisdiction in new ways on VoIP service providers, and reaching into their bank accounts to impose penalties and to collect regulatory fees. But the impact of that new regulation may not be as bad as advertised, and indeed, may be only one additional sign that VoIP has moved beyond an emerging service and is well down the road to being established as a broadly accepted addition to the telecom marketplace.

"Incumbent" Verizon suing Vonage over Patents

Verizon is claiming in a suit that Vonage has stolen its patented voice-over-IP (VOIP) technology and is asking the court to prevent Vonage from continuing to do so.

The filing is the latest legal headache for Vonage, while being choked by class-action suits from customers who claim Vonage violated stock security rules.

If Verizon prevails, Vonage would have to pay royalties to the phone service provider, find another way of providing its service or risk going under and shutting its doors (like so many others), surprise, surprise.

Verizon is not just claiming that Vonage has infringed on patents allowing to offer value-added services; it is arguing that Vonage has stolen the "technology" of the business. Please someone help me understand this!

Verizon cited several instances of infringement, including inventions relating to, "gateway interfaces between packet-switched and circuit-switched network, which is critical to implementing commercially-viable VoIP telephony." Other patents named in the suit include solutions for fraud detection, services such as call forwarding and voicemail, and methods relating to the use of wireless handsets over a VoIP network.

The lawsuit comes like an unwanted muscle-cramp (out of nowhere!!) for Vonage. In a statement released today, Vonage noted that it was not confronted by Verizon before the suit was filed. This to me is surprising.

Bobbi Henson, media relations director with Verizon, told internetnews.com that she couldn't comment beyond the words of the filing itself.

In the filing, Verizon noted that Vonage has gained 1.1 million new customers in the last 15 months, "many of whom are Verizon's former customers."

The complaint also noted that Vonage scooped up 350,000 new subscribers in the first quarter of 2006 alone, and has spent over $400 million on advertising and marketing since its inception -- all of which it found in the May 24, 2006 filing.

Verizon also claims in the suit that Vonage has no patents or intellectual property of its own. But Vonage countered that its services "have been developed with its own proprietary technology and technology licensed from third parties."

Verizon is asking the court for damages, in addition to a "permanent injunction... restraining and enjoining Defendants" from "making any further sales or use of their infringing products and services."

Vonage said that it would "vigorously defend the lawsuit."

Just like in my post of Mitel suing ShoreTel, I have the exact same opinion - play fair, there is enough for everyone.

Shares of Vonage fell almost 12 percent on the news, while those of Verizon lost just 1 percent, in line with the rest of the market.

Lights out for SunRocket

It looks like the sun has finally set for the company that was the second largest U.S. supplier of Internet phone services,. SunRocket silently called it quits without notifying its customers, which total more than 200,000.

Vienna, Virginia-based SunRocket, which is a rival to Vonage Holdings in the home and small business market for Voice over Internet Protocol (VoIP) phone services, gave no warning it was shutting down operations on its Web site.

Callers to its customer service line heard a brief recorded message, saying: "We are no longer taking customer service or sales calls. Goodbye."

Companies offering calls over the Web were seen as rivals to established carriers when they sprouted up a few years ago, but many are having a difficult time financially competing against their big, deep-pocketed and entrenched rivals. Calls and e-mails to SunRocket by Reuters were not returned. A report in the New York Times quoted an unnamed source that had been briefed on the company's status as saying that SunRocket had ceased operation and plans to move its customers to one or more companies. It has been confirmed that those companies are Packet 8 and ViaTalk.

Customers, many of them lured by SunRocket's offer of unlimited phone calling for one year for an upfront fee of $199 within the Canada, the United States and Puerto Rico, reported patchy service or full outages on Monday on Web sites such as FatWallet.com and DSLReports.com.

Who's to say that the companies taking care of SunRocket's "ditched" subscribers won't eventually go under again. What is happening here? Do any VoIP adopters out there believe that these companies are giving VoIP a bad name?

I can't even tell you how many people I have spoken to have said that the cost savings of VoIP isn't enough justification anymore, they would rather pay the extra money and have the peace of mind of reliability. This isn't good, especially for an early adopter and firm believer of VoIP such as myself.

These companies spend too much money on "trendy telecom" advertising that they have forgotten about the technology that provides the reliability and redundancy that is needed to win clients over. For residential VoIP, people just want regular dial-tone and lower costs, hence the high-churn rate if they are not satisfied with the service. Business is a bit different, they see the value proposition and the features that improve their businesses.

People, people, please provide realiable, utility-grade VoIP services, you are ruining it for the rest of us.

VoIP and Celebrities - what do they have in common?

Ashton Kutcher!,

Kutcher, best known for his role on That '70s Show and MTV's reality show Punk'd, is "creative director" for a Silicon Valley start-up called Ooma, which has developed a device that will allow users to make free VoIP calls to any phone in the U.S.

The company, which has $27 million in funding, officially announced itself Thursday.

Unlike Vonage, which requires users pay a monthly flat rate for domestic calling, or Skype, which charges users a low-cost fee to make or accept calls from regular phones, Ooma charges a one-time fee of $399 for the Ooma device. After that, all domestic local and long distance calling is free.

Exactly what Kutcher knows about Internet telephony or the communications market in general is a mystery to me. But apparently, the actor/husband of Demi Moore helped design the company's logo and the viral marketing campaign called "White Rabbit," which the company will launch this fall. As part of the campaign, Ooma will give away roughly 2,000 Ooma boxes to participants, who will then be able to invite three friends to also get a free Ooma box in exchange for deploying the box and trying the service.

The viral campaign is designed to create buzz for the product, but it's also necessary in order to ensure the service actually works. Ooma relies on a peer-to-peer network, much like the PC-to-PC calling service available through Skype and it needs to "seed" the market with devices.

Through this model calls are connected directly to customers rather than through a central server owned and operated by a service provider. Ooma uses this peer-to-peer network to avoid paying phone companies for terminating calls when Ooma users make long distance calls to non-Ooma users. So if I'm an Ooma user in Vancouver, BC, and I call my Dad in Los Angeles, who is not an Ooma user, the Ooma network will find an Ooma user in my dad's local calling area and use that stranger's local phone line to complete the phone call between my dad and me.

Andrew Frame, CEO of the company, claims that with strategically placed Ooma devices, the company can cover 95 percent of the population. (Of course, this also requires that most Ooma users also keep their regular phone lines so that calls can connect to the public switched telephone network.) And for regions where there is no Ooma box, Frame said the company will eat the cost of interconnecting to the local telephone network.

I gotta say, I'm skeptical that Ooma will actually get enough people to buy one of these devices, which looks like an answering machine. The $399 price tag is pretty hefty, especially when you consider that Ooma may not be around very long (and I only say that because of the model they are using). Several other pure play VoIP providers are struggling to keep their head above water. Earlier this week, SunRocket closed its doors leaving more than 200,000 subscribers without dial-tone and Vonage, hit with a huge headache of a lawsuit from Verizon, is also losing clients. (More info. on these two stories on the next post).

The service also has a few catches. For one, international calling is not free. Frame (CEO) said the rates will be similar to other VoIP services like Skype or Vonage. What's more, the Ooma box provides one jack per phone. If users want to hook up additional phones, they'll have to buy a separate adapter called a Scout for each phone at a cost of $39 a pop.

And the final catch is that, like many other VoIP offerings, Ooma doesn't "fully" comply with Enhanced 911, which means if you want the fire department or ambulance driver to actually find your house when you call 911 then you'd better keep your $20 a month regular phone line as a backup.

I'm sure some users will find the Ooma device economical and very useful. But I doubt it will take the telephony world by storm. Of course that could change, if a phone company like AT&T or Verizon were to buy Ooma or partner with the company to deploy the device in their traditional telephony markets. But if history is any indication, I don't see the incumbents in the U.S. and Canada touching Ooma with a 10-foot pole.

Blah! Another company, another idea. my opinion - all the hype, no go.

Mitel files suit against competitor ShoreTel

It's a tough world, the IP world that is. Every Tom, Dick and Harry is going to market with an IP product, whether it is an integration with current IP Platforms or an out-of-the-box solution. You have to be very careful or you could end up in the middle of a lawsuit trying to protect "your" applications and features. Lets face it, every major IP Product out there provide roughly the same robust features, they just all have a different name and the operate differently. Take Nortel's call centre solution - Symposium versuses Mitel's 6110 Contact Centre Solution. Both feature rich with enough bells and whistles that can even make Bill Gates do back-flips. Are they both the same or are they different? What is your opinion? Being the leader does Mitel have the right to make a fuss over what ShoreTel has done? In the next few paragraphs, Mitel is suing ShoreTel over some very basic IP Telephony operations.

In the suit, Mitel alleges that ShorTel has infringed upon four separate patents owned by Mitel. The four U.S. patents included in the filing are:

• #5,940,834 — “Automatic Web page generator,” which involves the automatic on-demand creation of an organizational company directory in and Internet or Intranet environment. It also refers to an interface to the company PBX which then provides access PBX (News - Alert) functionality directly from the directory.

• #5,703,942 — “Portable telephone user profiles using central computer” refers to the creation and application of user profiles and storage of those profile in a database, which can then be used to control access to applications and functions of users on the system.

• #5,541,983 — “Automatic telephone feature selector” allows for the ability of users to select and activate endpoint features from various locations on or off premises, including identifying whether they are “in” or “out,” along with applying specified profiles associated with their status.

• #5,657,446 — “Local area communications server” refers to the specific process by which a telephony system controls communications within the network’s infrastructure, servers, and endpoint devices.

While the filing is does not specifically describe specific implementations these patents affect, it is evident that they impact a several features that are part of a unified communications solution set.

“Mitel has invested significant resources into intellectual property in support of its communications innovations, and we intend to assert our rights against those that infringe that intellectual property,” said Christian Szpilfogel, Office of the CTO, Mitel, in a statement.

In its filing, Mitel asserts that ShoreTel is in violation of these patents each time it sells or markets IP phone systems like its ShoreTel 6 system. At this point, the question is not only whether ShoreTel actually violated these Mitel patents, but also how the timing of the filing will affect both companies. It certainly is no coincidence that Mitel filed papers and released an announcement late on the day before ShoreTel was due to begin trading, though Mitel is not commenting on the action other than to send a copy of the complaint, which merely outlines the parties involved and the patents involved. ShoreTel did not respond to requests for comment. The suspicious timing of both the lawsuit and the ShoreTel IPO also coincide with the vote by Inter-Tel (News - Alert) shareholders’ vote tomorrow on the proposed merger between Mitel and Inter-Tel. It is also unlikely that the timing of the IPO was arbitrary, and we’ll see tomorrow what, if any, impact these events have on the vote. Earlier this week, an independent proxy advisory firm recommended that Inter-Tel shareholders vote in favor of the Mitel merger. It will be some time before the patent suit is resolved, but what the timing of the events of the past two days, and the suit itself, highlight is the incredible competition that pervades the communications space today. With giants like proprietary solutions vendors, like Cisco, Microsoft, and others, and open source alternatives like Fonality ( News - Alert) and Sangoma carving out more territory for themselves. Though the SMB market, in particular, is large, a growing number of companies are offering solutions to support the space, creating increased pressure on the “incumbents” in the space. Now that Microsoft has embedded itself in the unified communications space, and Cisco has announced new products specifically targeting the SMB space, companies like Mitel, ShoreTel, and Inter-Tel, among others, will find themselves competing against players it has typically not had to contend with previously. This action by Mitel may only be the beginning as companies fight for market share.

Source: TMC.net

Mitel Expands into Brazil

Mitel®, the trusted innovator in unified IP communications solutions and applications that empower business success, today announced the opening of a new office in Rio de Janeiro to serve the Brazilian market. Mitel also announced the appointment of Paulo Ricardo Pinto as general manager of Brazilian operations.

“There is a significant untapped potential for IP telephony in Brazil, as enterprises are just beginning their IP migration journeys”, explained Ronald Gruia, principal telecom analyst at Frost & Sullivan. According to Gruia, Brazil represents “the largest enterprise market in the CALA (Caribbean and Latin America) region in terms of overall yearly station shipments (including both TDM and IP lines).” Despite the fact that the country currently ranks second behind Mexico in terms of IP penetration, there are positive signs that IP adoption is increasing, thereby making Brazil a “natural next step for Mitel to expand its regional operations in Latin America” added Gruia.

“Brazilian companies now have access to the industry’s premier IP communications platform that unifies business communications,” said Gilles Rousso, Mitel’s vice president for the Caribbean and Latin America. “Providing customers with the benefits of reduced costs, increased operational effectiveness and seamless integration into their business processes exemplify the solutions that Mitel delivers.”

Conscious that its growth is dependent upon building strong channel presence, Mitel is expanding its PARTNERprogram throughout Brazil’s 26 states and the federal district. The Mitel PARTNERprogram offers a suite of programs and promotions which reward partners for their commitment to Mitel and for delivering exceptional customer satisfaction. Two recent additions to Mitel’s Brazilian channel partner community includes Seal Telecom, a leader on IP Voice Conferencing Systems, and Agora Telecom, Latin America’s largest reseller of trunked radio systems.

“Over the last year Mitel has expanded its presence and coverage throughout Latin America by establishing offices and expanding its network of channel partners,” Rousso continued. “As a respected veteran of the local telecommunications industry, Paulo brings an extensive network of industry contacts that will help us to continue to establish a strong presence for Mitel in the Brazilian market.”

Shift Networks Inc. Obtains CCAA Protection

Well, it has happened. Shift Networks has filed for bankruptcy and has obtained CCAA (Companies' Creditors Arrangement Act) Protection. Meaning, they will maintain regular business operations and to continue uninterrupted delivery of services to Shift clients. this being branted until June 7th, 2007.

Quoted from CCNMatthews - May 11, 2007 - "Shift continues to be the pre-eminent provider of small-to-medium business VoIP telephone services in Calgary, Edmonton, Vancouver, Victoria, Toronto and Ottawa, experiencing over 300% subscriber growth in fiscal 2006 compared to 2005 and continued adoption of its unique hosted VoIP services."

I can't say that I didn't predict this. As a former employee of a dealer selling the Shift Networks Service exclusively, there were problems from it's initial launch in Vancouver in April 2006. The technology, partnerships and agreements with the incumbent telcos, were not there. Although the incumbents have to play fair, who really wants to give business away, especially recurring revenue-generating business.

Shift Networks started off "strong" by purchasing a ton of discontinued product from a manufacturer leading in the VoIP space. Which allowed them to offer a variety of applications with their packages and charging per seat and pratically giving the hardware away, probably their first mistake. Then delivering dial-tone, services, applications over a DSL service was probably their second. DSL is not the most dependable service with the most reliable uptime. So how was it Shift Guaranteed 99.999% uptime and reliability.

After looking into some options for management tools and greater flexibility, they purchased all new hardware and re-configured the entire data centre hosting more than 12,000 subscribers.

All this is an example of using a service that although works in the "residential" space, is lacking the technology and reliability to have presence in the Business market. On Site hardware converged and deployed properly with your existing data network using local carrier service is what businesses should be looking at. Depending on the size and applications, their ROI could be 8 months to 2 years. Isn't your business worth it?

The VON Europe Spring Expo in Stockholm

IP communication technology is evolving at a rapid pace and the VON Europe Expo, Europe's VoIP industry trade show since 1998, is your best opportunity to see, touch and challenge the latest products and services in IP communications including Voice and Video! Register for the VON Expo to catch the latest thinking & product demos from the IP communications vendor community & do business right on the show floor!

Come join me there, for more information please visit:

http://www.von.com/2007/springEurope_stockholm/html/index.htm

Mitel announces agreement to purchase Inter-Tel for $723 million

Mitel announced on April 26th, 2007 an agreement to purchase Inter-Tel. The company offers value-driven communications products (more of an out of the box solution); applications utilizing networks and server-based communications software; and a wide range of managed services that include voice and data network design and traffic provisioning, custom application development, and financial solutions packages. The merger is said to increases Mitel's SMB market share in the US and the U.K.

Read the official press release at http://www.mitel.com/DocController?documentId=23291.

An Introduction to Business IP

Here we are in 2007 and VoIP is fast becoming a necessity, and not just for the long distance savings! When first discussing IP Telepony with a prospective client, I usually revert to talking about the Vonages, the "long distance savings technology" as I like to call it. The Vonages of the world, that offer Residential VoIP services, are still doing great and yes, offer great features beyond normal analog residential telephone service. What they have tried to do is take this philosophy and move into the business market. When this happens we have many more things to worry about now: 1. Security 2. Voice Quality 3. Reliability and Uptime. This is where I sit down with the client and explain that VoIP has been dubbed so because the voice travels over IP or your data network, not necessarily the Internet. Voice gets converted into packets, just like your data information, it doesn't travel over the public Internet "mess" unless there is an application for it in your business. With a truly converged network, properly installed equipment and software increases security, reliability and uptime and ensures perfect voice quality. But I will save this for another post. I like to divide VoIP in two classes: 1. VoIP in the Residential world = VoIP / 2. VoIP in the business world = an application specific telephone system, meaning, if all you want is utility-grade dial-tone, you can get that. If your business requires a true integration of your current data netowrk (call centre software, Microsoft Outlook integration, etc.), that can be done as well. You see, the dividing line will not be who has IP and who doesn't. It will eventually be who will use IP Telephony for regular telephone use or who will use it to streamline their business processes.