FierceVoIP

What does 2H 2009 hold for IP communications?

Pete Wylie — Thu, 02 Jul 2009 11:13:51 -0400

As the second quarter closed Tuesday, I began thinking about what the second half of the year might hold for companies in the IP communications space.

The publicly traded companies won't begin releasing second quarter results for at least six weeks, so it will be tough to come by hard numbers until then to gauge if the market has reached a bottom and spending is beginning an upward trend. Most analyst reports I've seen so far continue to indicate flat growth or slight declines in revenue as companies put off upgrades to their communications systems or cut back on premium features.

Though looking at the picture in aggregate is a little gloomy, there do remain sectors like IMS, HD Voice, unified communications hold promise to drive revenues.

Also, though neither company is a big fan of one another, VoIP device makers magicJack and ooma both told me they've seen strong sales momentum so far this year and have growth plans in place to scale their businesses. On the other side of the consumer-facing VoIP coin, Vonage is doggedly trying to reduce churn and acquire customers without shelling out so much in marketing expenses, but we won't know until early August how its efforts are progressing. 8x8 posted strong results for its fiscal quarter ended March 31, 2009, especially in its business group, so perhaps it will continue to contribute good news for the sector in the second half.

Hosted services, especially those aimed at the SMB market, have also gotten paid a fair amount of lip service lately, as company reps have told me they've seen a jump in the number of start-up ventures seeking high-quality communications services without the upfront costs of a premise-based deployment.

Nortel's breakup also could cause big waves in the space, with the eventual buyer of Nortel's VoIP-related units getting significant market share, along with the challenge of integrating product roadmaps and technology. One source told me a deal for Nortel's Enterprise Solutions division would be announced within 48 hours. But that was more than a week ago, and there still has been no announcement regarding a sale, so we'll wait and see if some fireworks happen over the weekend or next week.

What are you seeing on the ground in regards to the outlook for the second half of 2009? Will it hold more disappointing, sluggish sales? Or will some companies find the right messaging and price points to drive uptake of new equipment and services?

Let me know via email or tweet, and, if you're a stateside FierceVoIP reader, we hope you have a fantastic 4^th of July weekend!

- Pete
@fiercevoip

A look at the Q3 IP phone market

Pete Wylie — Thu, 02 Jul 2009 09:42:34 -0400

Garrett Smith, of Smith on VoIP, thinks the third quarter could be a big one for VoIP phone manufacturers, with the emergence of HD Voice and adoption of open source VoIP driving interest in new models. He believes the major phone makers will launch new VoIP phones in the next three months, and he has detailed their activity and messaging around upcoming product launches, as well as present market offerings.

Smith looks at models from AudioCodes, Cisco, Polycom, Citel, snom and Siemens, so if you're looking to upgrade your IP phones or are considering a VoIP transition, Smith's guide is a good place to start.

For more:
- see Smith on VoIP's IP phone roundup here

Cisco nears Jabber integration with WebEx Connect

Pete Wylie — Thu, 02 Jul 2009 09:08:08 -0400

Cisco Systems is close to integrating the IM software back end and collaboration features it gained through its acquisition of Jabber into its SaaS WebEx Connect client, eWeek reports. Cisco also plans to add a status update function, similar to Twitter and Facebook updates, to the program for real-time collaboration.

WebEx Connect currently employs AOL's AIM back end for its instant messaging capabilities, but Cisco will replace this with Jabber's presence and messaging client sometime this summer or fall, according to the company. Cisco also plans to add email functionality to the offering by leveraging tech from another acquisition, PostPath, which it bought in 2008. The addition of real-time updates, an advanced IM client, and email could let WebEx compete with Microsoft Exchange and Outlook.

For more:
- see the eWeek article here

VoIP is app most likely to be delayed by IT managers

Pete Wylie — Wed, 01 Jul 2009 15:23:53 -0400

Apparent Networks, an IT performance manager focusing on cloud applications, conducted a survey of IT managers that found VoIP is the most likely application type to have deployments delayed due to third-party network concerns. Seventy-three percent of the survey respondents also said VoIP was the most common application to stress their networks.

Of the IT managers surveyed who said they delayed an application deployment (36 percent), 61 percent said they had delayed a VoIP application. Unified communications and video delivery applications were the next two most commonly cited for delays in deployment.

For more:
- see the press release here

Related article
Keynote Kicks VoIP Reliability and Clarity

BroadSoft and GENBAND integrate products for carriers

Pete Wylie — Wed, 01 Jul 2009 12:34:31 -0400

GENBAND and BroadSoft announced GENBAND's G9 and G6 gateways and S3 session border controller will be integrated with BroadSoft's BroadWorks VoIP application platform for carriers migrating from TDM to IP telephony systems. The companies said the new offering will allow carriers to deliver Class 4 and 5 VoIP services and applications on a single system, all while continuing to support legacy features.

The new offering also provides options to carriers like hosted unified communications and fixed-mobile convergence support, according to the companies.

For more:
- see the Light Reading article here

magicJack CEO: Femtocell offering by Q1 2010

Pete Wylie — Tue, 30 Jun 2009 12:14:36 -0400

Dan Borislow, CEO of magicJack parent YMax, said in an interview the company has passed 4 million units sold, will do around $100 million in revenue this year and currently is hard at work developing a femtocell offering that, he said, could be ready as early as Q1 2010. "Sister company" Stratus Telecommunications' CEO Nathan Franzmeier said the femto offering could cause the current $39.99 offering price to increase, but Borislow was optimistic that the device could be produced cheaply enough to keep the price constant.

With every metric trending through the roof, it's almost hard to imagine Borislow's early days with the company, when he said had to spend heavily before receiving a dime of revenue.

"I had $25 million in fixed costs before I sold my first magicJack," Borislow said. "Eighteen months ago, I didn't have a single customer. It's taken a while for those fixed, network costs to be covered by units sold, but we're really in a good place now with our cost structure."

Borislow said magicJack is "the fastest growing telecommunications company in history," which likely will be disputed, but Borislow thinks the femtocell offering could make his claim ironclad.

"If we move enough femtos out, I could mesh together 10 million end points into a WiFi network," Borislow said. "I tell my employees we're just limping along right now, and they need to get prepared for the most explosive thing ever in telecommunications."

For more:
- see the VoIP Planet article on the "FemtoJack" here

Skype 3.0 for Win Mobile leaves beta

Pete Wylie — Tue, 30 Jun 2009 10:25:05 -0400

Skype 3.0 for Windows Mobile has left beta testing and has added SMS capabilities and file transfer. The two new features, which require Skype Out credits, can be accessed through the contact menu on the Skype client.

Additional upgrades to the 3.0 release include a contact list wizard and a new interface for the status, chat and history tabs, according to CNET. The new Skype client was downloaded more than 250,000 times from CNET's site by 10 a.m. EST, showing the high demand for the full release of the product.

For more:
- see the CNET article here

Is UC suffering from hyperbole?

Pete Wylie — Mon, 29 Jun 2009 11:47:00 -0400

A lot of fuss was raised by Cisco's channel partners after comments made at Cisco's Partner Summit by Don Proctor, senior vice president of Cisco's software group, who said Microsoft and HP were using their recently announced 10-year, $180 million UC partnership to move business away from their solution provider channel partners. ChannelWeb's Kevin McLaughlin makes the point that Microsoft and HP are very "channel-friendly," and sees the Cisco position as evidence of "hyperbole reigning" in the unified communications vendor battle between Cisco, and Microsoft and HP.

As we prepare to take an in-depth look at the unified communications landscape in mid-July, do you think the market is suffering from exaggeration of product capabilities and/or distortion of reselling realities?

For more:
- see McLaughlin's full UC hypothesis here

Study finds cash-strapped consumers more likely to cut VoIP than landline

Pete Wylie — Mon, 29 Jun 2009 11:02:36 -0400

Alcatel-Lucent's Market Advantage Program released results of a global study of how the recessionary climate is affecting consumer spending on specific telecommunications services that surprisingly found consumers much less likely to cut back on landline spend than either free or paid VoIP services. Seventy-four percent of the 3,200 respondents said they considered their landline telephone an "essential network-based service" they would not reduce spending on due to economic pressure. Only 32 percent of participants said the same for their paid VoIP service. As you would expect, respondents said they were less likely to cut back on free VoIP services, as 48 percent considered them essential.

While the number of landline telephones globally dwarfs the paid VoIP extension total, the results of the Alca-Lu survey do call into question the value proposition of VoIP, at least in terms of how integral consumers consider it. It's a question VoIP service providers need to be asking, as nearly two-thirds of participants planned on cutting spending on network services in 2009, according to the survey.

Despite all the noise over threats of landline loss due to mobile substitution and free VoIP alternatives, this survey suggests global consumers might not be in any rush to cut the cord.

For more:
- see the press release and results explanation here

BroadSoft-Sylantro: 6 months later

Pete Wylie — Mon, 29 Jun 2009 09:51:55 -0400

BroadSoft's December 2008 acquisition of fellow VoIP application server company Sylantro gave BroadSoft an even more commanding lead in market share in the space. But integrating another unique company into the buyer's corporate culture can be quite a challenge, so, six months after the formal announcement, here's a look at how the integration has progressed.

In the first quarter, BroadSoft's executive team spent a lot of time on the road talking with Sylantro and BroadSoft customers alike about the implications of the buy, according to Leslie Ferry, vice president of marketing for BroadSoft. But Ferry said the integration of the back office systems and personnel is now complete, and BroadSoft's customers have benefited from the product set and engineering muscle BroadSoft picked up from Sylantro.

"The integration of talent has gone incredibly smoothly, and we knew from due diligence and competing with them that they had a good product and smart, talented people working on it," Ferry said. "It's always a challenge when you integrate two companies, but we've been more than pleased with the results."

Ferry said the integration went smoothly because Sylantro had a similar culture of innovation and research. She also noted that "getting out the message" to Sylantro customers about the level of support they would receive from BroadSoft was the major challenge in the integration.

Ferry said portions of Sylantro's Synergy platform are being integrated into the BroadWorks offering, and portions of Sylantro's web-based client SynApps are also being evaluated for eventual inclusion in BroadSoft's products.

ooma updates funding total, eyes profitability

Pete Wylie — Mon, 29 Jun 2009 09:44:47 -0400

VoIP device maker ooma said its funding announcement was weeks away before Tech Crunch broke the news last week, but ooma Chief Marketing Officer Rich Buchanan said the company's actual amount of funding was more than 30 percent larger than first reported. Buchanan said the final funding amount is still being determined, but the company has already raised $18.3 million in this round, which, Buchanan said, will give the company enough capital to reach profitability by the end of 2009. Initial reports said ooma, which offers free home VoIP service after a device purchase, raised only $14 million in the new round.

Buchanan said the company will use the funding round to increase marketing and sales efforts, as well as to scale its engineering department for new product development.

Buchanan said 26 percent of the company's user base now have signed up for ooma Premier, the company's value-added service plan. It costs either $12.99 per month or $99.99 per year and includes features like a free second phone line, three-way conferencing and find-me dialing. He added that distribution deals with Radio Shack and Best Buy have increased sales significantly, and said he thinks the company is on track for an eventual public stock offering.

"I believe we're building a very profitable business, and we're going to continue to acquire customers and provide them needed services," Buchanan said.

The distribution deals certainly will help the company pursue Buchanan's prediction; in the past three months, ooma has tripled its sales endpoints from 1,600 to nearly 5,000, according to Buchanan.

Google Voice begins accepting new users

Pete Wylie — Thu, 25 Jun 2009 15:03:40 -0400

Google announced it has begun accepting new users for Google Voice today, though public sign-up for the site is still unavailable. After much speculation about when the service would finally go live, Google began sending emails to users who requested notification of its availability in March.

Google did not say how many invitations would be sent at this time for the service or when general sign-up will begin.

ComputerWorld's Mike Elgan thinks Google will roll the service out to the public widely, continuing to offer it for free, so as to mine transcribed voicemails for contextual advertising, a la Gmail. While contextual advertising has taken a serious beating from consumer groups lately, Elgan doesn't think Google's hypothetical use case would be a Big Brother move.

"If all this sounds sinister, it isn't," Elgan wrote in his coverage. "This is simply where advertising is going. Most people have demonstrated willingness to give up privacy for free stuff. And in fact, contextual advertising itself is desirable. It's better to be pitched products you're likely to want rather than products you don't want."

For more:
- see the Google blog post here
- see Elgan's ComputerWorld article here

Nortel break-up to shift IP communications market

Pete Wylie — Thu, 25 Jun 2009 11:13:54 -0400

The race is on for Nortel's Enterprise Solutions division, which is its second-largest division by revenue, and the eventual buyer certainly will gain clout and share from the purchase. It remains to be seen which company will emerge as the winner of the Nortel sweepstakes, but the affect of Nortel's divestiture on the IP communications space is hardly in doubt.

Nortel has a 20 percent share of the global softswitch market, as well as a 59 percent share by revenue of the North American market, according to analyst reports, in addition to a major unified communications partnership with Microsoft.

Nortel's strong presence in North America had prominent analyst Zeus Kerravala thinking potential buyers are more interested in acquiring customers rather than technology through the deal. Kerravala, senior vice president of the Yankee Group, told Searchunifiedcommunications.com that the main goal of a rival picking off Nortel's enterprise group is to migrate the new customers to proprietary systems and gear eventually.

He sees Avaya and Siemens as likely buyers of Nortel Enterprise solutions, because both would gain significant U.S. market share through the deal. Canada's Globe and Mail reported Wednesday that Avaya has made a $500 million offer for the unit, but the company declined to comment on the purported deal. Avaya would become the U.S. voice leader with the buy, according to Kerravala, and Siemens would gain a U.S. foothold with Nortel's enterprise and government customers.

Avian Securities LLC analyst Catharine Trebnick sees some different potential buyers making a play for Nortel's carrier switching assets, including Sonus Networks and Nokia Siemens Networks. Trebnick notes that the buyer likely will get a significant discount for the division due to Nortel's urgency to sell, just as NSN got when it bought Nortel's LTE and CDMA unit for $650 million last week. Trebnick thinks Nortel's total enterprise unit is "a billion-dollar business," but would likely sell the unit or pieces of it for considerably less than that.

Another potential casualty of Nortel's break-up: its three-year unified communications partnership with Microsoft, called the Innovative Communications Alliance. That partnership is set to end in 2010, and with Microsoft recently announcing another high-profile UC partnership, this one with HP, it looks unlikely the ICA will be renewed. Executives responsible for the ICA project in Europe, the Middle East and Africa have already been laid off.

Where do you think the Nortel assets will land, and what does the break-up of partnerships and potential market share shake-up mean for the industry?

- Pete
@fiercevoip

Nimbuzz adds Voxbone local access number support

Pete Wylie — Thu, 25 Jun 2009 10:32:18 -0400

Voxbone will provide local access number support for Nimbuzz, the mobile communications platform, the companies announced Tuesday. Nimbuzz users can now make mobile VoIP calls without 3G or WiFi connectivity by dialing the Voxbone DID number the Nimbuzz application automatically supplies for the user. Users incur a small charge to call the local access number, rather than incurring roaming fees, making the DID addition an extra cost-saving feature on the Nimbuzz application, which is downloaded 750,000 times per month, according to the company.

For more:
- see the press release here

Toshiba announces bundled UC product

Pete Wylie — Thu, 25 Jun 2009 09:43:42 -0400

Toshiba America Information Systems, a wholly-owned Toshiba subsidiary, announced the availability of a bundled unified communications product that ships in a single software load and runs on one server. Toshiba's Unified Communications Suite bundles the usual UC suspects such as presence, IM, click-to-call in applications, find-me follow-me dialing and FMC utility, and the applications all run over Toshiba's Media Application Server.

Toshiba Information Systems said the UC bundle will deliver cost savings and productivity gains to enterprises, while the single software load will keep installation simple. The product is immediately available through Toshiba resellers nationwide.

A recent report on unified communications deployments and market share by Synergy Research Group said Toshiba was struggling in addressing significant industry issues and maintaining market share in this area. Perhaps the new bundled offering can help the company increase traction in this segment.

For more:
- see the press release here
- see the Synergy report here

Empirix adds 'pay as you go' testing for contact centers

Pete Wylie — Wed, 24 Jun 2009 16:51:41 -0400

Empirix, an IP communications testing company, announced Empirix Testing as a Service, which is designed as a way for large contact centers to validate the performance of their voice services and the quality of the user experience while using a "pay as you go" model. The new service uses Empirix's Hammer testing technology and the company's expertise in addressing contact center performance issues to provide custom solutions that fit the organization's specific testing needs.

"In today's economic climate, customer retention is critical and therefore businesses need to ensure that their contact centers are delivering the highest level of customer service possible," Daniel Hong, lead analyst of Datamonitor's Customer Interaction Technologies team, said in a release. "Empirix Testing as a Service is an economically palatable on-demand solution that identifies potential issues before they can negatively impact the customer experience - and as a result helps protect revenue."

The Testing as a Service product, which is available immediately, can address interoperability issues in multi-vendor environments, check for performance compliance and help with migration from TDM to IP telephony. The company claims the service sets itself apart due to its ability to replicate real-world, peak-use scenarios around the specific functions of individual call centers.

For more:
- see the Empirix press release here

Related article
Empirix launches SIP trunking test tool

ooma raises $18M

Pete Wylie — Tue, 23 Jun 2009 14:14:26 -0400

VoIP device maker ooma announced an $18.3 million round of funding led by Worldview Technology Partners, which has invested in ooma before. Previous investors were reportedly bought out in the funding round, according to TechCrunch.

ooma, which makes the Scout and Hub VoIP calling boxes, launched in 2007 with the same "buy this box, pay nothing for phone service" pitch it has now, but saw little success early on due to customer confusion over total cost of ownership. Then ooma brought in Rich Buchanan, architect of the Sling Box's early success, as CMO, and the company cut prices and soon forged distribution deals with Best Buy and RadioShack that have brightened the company's chances of profitability.

The company also distinguished itself by promoting a premium offering with additional features that generates subscription revenues to augment the device sales.

Correction: Previously, this story said ooma raised $14M in new funds, but the company actually raised $18.3M, according to a company spokeswoman.

For more:
- see the TechCrunch post on ooma's funding here

Competitors stalk Nortel VoIP assets

Pete Wylie — Tue, 23 Jun 2009 11:35:09 -0400

Now that Nortel Networks has announced it will seek to sell all of its assets, speculation is heating up about which companies could poach Nortel's lucrative VoIP and switching unit. Analyst Catherine Trebnick told Light Reading that Sonus Networks is a likely candidate to buy Nortel's VoIP and switching assets, which Trebnick said could fetch around $350 million at their currently distressed price. With 320 carriers using Nortel VoIP gear, the assets would give a buyer serious market share.

Trebnick also mentioned Avaya as a potential Nortel suitor, but Zeus Kerravala, senior vice president of the Yankee group, thinks Avaya is the leading candidate. Nokia Siemens Networks, which purchased Nortel's CDMA and LTE business for $650 million, is also said to have requested financial details on the unit from Nortel, along with VoIP equipment vendor GENBAND.

Regardless of which company ends up purchasing Nortel's enterprise division, the status quo of the IP telephony space will shift after the Nortel buyer assimilates the company's substantial customer base.

For more:
- see the Cable Digital News article here
- see the Searchunifiedcommunications.com article here

JAJAH exceeds 1B calls connected

Pete Wylie — Tue, 23 Jun 2009 09:11:33 -0400

JAJAH is claiming it has now connected more than 1 billion VoIP calls through its IP telephony platform, which is licensed by Yahoo!, Plaxo and eHarmony, among others. JAJAH also now has more than 25 million users, according to CEO Trevor Healy.

JAJAH has established itself as a leader among IP telephony platforms by forging partnerships, such as its deal with Yahoo!, to handle back-end management of telephony systems. JAJAH handles all operations for Yahoo! Messenger's premium telephony service, Yahoo! Voice, with which the 1 billionth call was placed. The 1 billionth call was made by an Indian resident of San Francisco, who called her mother in Bangalore, India, via the Yahoo!-branded JAJAH softclient, according to the company.

For more:
- see the JAJAH press release here

Verizon Business launches new contact center product

Pete Wylie — Mon, 22 Jun 2009 11:26:01 -0400

Responding to some customers' price sensitivity, Verizon Business is rolling out a stripped-down version of its cloud-based Web Center contact center service that lowers the cost per agent by around 50 percent, according to the company. The new Web Center Voice offering does not come with some of the advanced non-voice features of the full product, such as e-mail, chat, Web callback and recording, but still features IVR support, VoIP access and CRM software, among other features.

Verizon Business said the Web Center Voice is aimed at start-up businesses and those that don't require the set of multimedia functions the full Web Center product has. Web Center Voice will cost between $75 and $125 per month per agent, depending on the feature set and the size of the specific enterprise.

For more:
- see the bmighty.com article here
- see the Verizon Business article here

Sonus, Vonage settle class-action suits

Pete Wylie — Mon, 22 Jun 2009 10:24:26 -0400

Last week was quite a litigious one in the VoIP space, as Vonage and Sonus Networks settled separate class-action lawsuits regarding purported financial misdealing at the firms.

Sonus settled a class-action lawsuit filed in 2006 by shareholders accusing the company of making false or misleading statements about the company's financial health to inflate share price for $9.6 million, according to Boston.com. In 2007 the company settled a previous class-action suit, which also accused the company of making false or misleading financial statements, for $40 million.

Vonage announced it reached an agreement in principle to settle a suit brought by shareholders regarding its infamous 2006 IPO. Vonage stock, initially purchased for $17 during the IPO, is now trading for around $0.50 per share. The company did not release the amount of the settlement, but said it would fund all expenses through liability insurance, thereby not incurring additional fees from the settlement.

For more:
- see the Boston.com article on Sonus' deal here
- see the BusinessWeek article on Vonage's settlement here

Polycom announces entry-level telepresence system

Pete Wylie — Mon, 22 Jun 2009 09:49:56 -0400

Polycom recently announced an entry-level telepresence solution that will retail for $5,999, according to the company. The HDX 6000 room telepresence system offers HD-quality conferencing with HD video, voice and content sharing capabilities for a cost-effective way to cut travel costs while maintaining collaboration and connectivity.

Polycom is marketing the HDX 6000 as a way for companies to improve collaboration and reduce operating costs, which, analyst firm Nemertes Research said, are key concerns for this market.

"Nemertes Research continues to see growing interest in video conferencing to reduce travel and improve the ability of distributed workers to effectively collaborate," Irwin Lazar, vice president communications research for Nemertes, said in a release. "Forty-eight percent of research participants now have policies to promote the use of video conferencing."

The HDX 6000 will be available July 1 worldwide through Polycom's channel partners.

For more:
- see the press release here

Ericsson to deploy VoIP application server for O2 Germany

Pete Wylie — Mon, 22 Jun 2009 09:06:05 -0400

Ericsson was selected to deploy an IMS core system with an IMS-based VoIP application server for Telefonica O2 Germany, the companies announced in a release. The deal includes Ericsson hardware deployment and software integration.

The IMS update will allow SIP trunking, IP Centrex and presence for both fixed and mobile users of O2 Germany's network. IMS technology lowers the cost of application delivery for businesses and will help companies continue to move toward network convergence, according to the release.

For more:
- see the press release here

Related article
Ericsson is a leading IMS equipment maker

Agito provides first FMC solution for BlackBerry smartphones

Pete Wylie — Fri, 19 Jun 2009 14:10:35 -0400

Agito Networks, a unified communications and FMC hardware maker, announced it is the first company to deliver a solution that enables fixed-mobile convergence and unified communications functionality for RIM's BlackBerry smartphones. Prior to Agito's solution, BlackBerry users could only access UC and PBX functionality from their cellular network, which caused problems with poor in-building cellular performance and costly cellular roaming charges for workers traveling internationally.

Agito Chief Marketing Officer Pejman Roshan said mobile UC for the BlackBerry has been sought after by enterprises for years, as the device is the North American smartphone market leader and a fixture in enterprise communications.

"Agito's BlackBerry solution is RIM Developer approved, works without any hacking or "jailbreaking" of the device, and will continue to function smoothly with any firmware updates to the phone, since the solution was developed using RIM APIs," Roshan said. "While other companies offer mobility and unified communications functionality on the BlackBerry, they can only do so only with several expensive upgrades to their servers and PBXs, and no one has been able to deliver these services over WiFi to this point. The Agito RoamAnywhere Mobility Router is also the only solution which provides mid-call conference, hold and transfer options for the Blackberry."

Agito will support four BlackBerry devices: The Bold 9000, the Curve 8900, the 8800 and the Curve 8300. The solution is currently in beta testing and will be available to all Agito users by mid-July, according to Roshan. All current RoamAnywhere Mobility Router users will have to do to gain BlackBerry functionality is download a software update. The service will have no additional charge, and will not require the use of a RIM's Mobile Voice Services plan to access the VoIP over WiFi capabilities.

Google Voice public launch buzz remains high

Pete Wylie — Fri, 19 Jun 2009 09:43:56 -0400

Google reserved 1 million phone numbers with Level 3 last month, ramping up speculation that the long-awaited public launch of its Google Voice service was imminent. It was widely rumored that Google Voice, which is the product of Google's acquisition of GrandCentral, would go live this past Thursday, June 18, but Google Voice Product Manager Craig Walker dispelled those rumors via Twitter. The site currently remains in a private beta test, but Walker said the engineering team was "cranking 24-7" to get the product ready as soon as possible.

When it eventually leaves private beta (restricted to previous GrandCentral users), Google Voice also is likely to come with number portability, according to a TechCrunch story, which would make switching to the service very easy for people who want to keep their current number. The service offers a single phone number that will route incoming calls according to whatever number the recipient has selected or who the caller is.

For more:
- see the Network World article here
- see the TechCrunch post here

Battered IP comm market looks for growth engines

Pete Wylie — Thu, 18 Jun 2009 11:17:09 -0400

Today's report by the Dell'Oro group that carrier IP telephony revenues were down 25 percent in the first quarter is just the latest in a long line of negative reports for companies in this space. The carrier market started slipping in the second quarter of 2008 and has still not seen an upswing. Some reports don't see a rebound in the market until 2011 when global sales are expected to increase due to growth in developing markets. Enterprises are retrenching and delaying upgrades to their communications equipment and services in the process, making revenue growth seem elusive in the interim.

So what are vendors and service providers to do during the lull in spending? Are there viable alternatives to cost cutting and headcount reductions while waiting for the Great Recession to end?

The glimmer of hope in the Dell'Oro report came from sales of session border controllers and SIP trunking equipment and services. Frost and Sullivan also estimated the SIP trunking market will bring in twice as much revenue as hosted PBXs by 2012. Another report from Infonetics in March saw IMS revenues climbing. As enterprises delay cap ex, hosted services and cloud computing options have shown potential to drive revenue growth as well, but companies haven't offered many hard numbers about the uptake of these services.

One notable trend that could be attributed to the market downswing is an increased focus on high-level partnerships and reselling agreements. HP and Alca-Lu's deal today is expected to drive billions of dollars in revenues, at least by the companies themselves. HP and Microsoft also announced a major partnership around UC in the past month, and Cisco released a statement saying that UC and collaboration would jointly comprise a $34 billion market opportunity. Another buzz word and potential revenue driver is HD voice, which many industry watchers think could revitalize the VoIP industry entirely.

Perhaps a blended approach of new technologies and offerings can revitalize the space, or the economy begins climbing sooner than expected and brings IP telephony revenues with it. Either way, we'll be keeping an eye out for "green shoots" in the IP communications space through this rainy early summer in D.C., even though reports are rather bleak at the moment.

- Pete
@fiercevoip

Carrier IP telephony market down 25% in Q1

Pete Wylie — Thu, 18 Jun 2009 09:55:21 -0400

The carrier IP telephony market got hammered in the first quarter, as recessionary forces dragged down revenues about 25 percent compared to Q1 2008, according to a report by analyst firm Dell'Oro Group. The report attributed the decline to a mix of seasonal weakness, the global recession and resulting cap ex pullbacks, and wireless substitution.

The report also found that vendors with a global presence fared better than those who rely heavily on the U.S. market. Though the sector dipped as a whole, Alcatel-Lucent, Huawei and Nokia Siemens gained share, while Cisco, Nortel and Sonus Networks contracted on a quarter-over-quarter basis.

Sales of SIP trunking and other business VoIP services remained strong despite the overall sector decline, according to the report.

For more:
- see the press release here

NetIQ to monitor MTS Allstream UC deployments

Pete Wylie — Thu, 18 Jun 2009 09:36:18 -0400

MTS Allstream, a Canadian provider of unified communications solutions, announced it has selected NetIQ to manage its enterprise UC applications and infrastructure. With the addition of MTS Allstream's customers, NetIQ now manages more than 1 million VoIP lines worldwide, according to the company.

MTS Allstream will deploy NetIQ's AppManager for network assessment, end-to-end monitoring and reporting on MTS Allstream customer UC deployments, according to the release.

For more:
- see the joint press release here

HP & Alca-Lu sign 10-year deal, will jointly develop IP telephony products

Pete Wylie — Thu, 18 Jun 2009 09:21:01 -0400

Alcatel-Lucent and Hewlett Packard announced a 10-year global alliance Thursday that aims to bring customers converged telecommunications and IT equipment. The companies will jointly market any resulting products, which will include Alca-Lu IP telephony and unified communications products combined with HP IT solutions. The companies said they would target these offerings at the mid to large-size enterprises and public sector companies.

This is HP's second major announcement on unified communications products in less than a month, as HP and Microsoft announced a $180 million UC partnership on May 19.

HP and Alca-Lu want to create a "one-stop shop" for service providers to transform their IT and telecom infrastructures, as well as "truly integrated communication environments," according to the release.

"We expect customers will be able to create new business opportunities and greater efficiencies from this alliance," said Mark Hurd, HP chairman and chief executive officer, in a release. "By combining our deep expertise in IT and communications, HP and Alcatel-Lucent will help customers transform their technology needs into a competitive edge."

For more:
- see the joint press release here

Jeff Pulver examines Twitter's impact at 140 Characters Conference

Pete Wylie — Wed, 17 Jun 2009 15:17:31 -0400

Following up on the success of his HD Communications Summit, which he modestly predicted would become "a milestone date in the history of the VoIP industry," Jeff Pulver kicked off his inaugural 140 Characters Conference in New York Tuesday. The event, which focuses on the impact of Twitter and real-time communications, was well-timed given the prominence the microblogging service has had this past week in reporting on the Iranian election protests.

While on its face Twitter doesn't have a clear connection to the telephony world, Twitter or some other form of real time collaboration ability could be a very interesting integrated feature for unified communications platforms, especially for the monitoring of company mentions or important topics. Several companies even have reported using Twitter to gain accounts, and it has also helped a few companies avoid publicity debacles by allowing them to address issues quickly after picking up on Twitter feeds discussing the situation. These use cases and others deserve more fleshing out, so Pulver announced two additional 140 Characters Conferences: One in London and another in Los Angeles.

For more:
- see Jeff Pulver's conference page here

XCast Labs adds video voicemail for BlackBerry

Pete Wylie — Wed, 17 Jun 2009 12:15:55 -0400

XCast Labs, a voice and video SaaS provider, announced today it has added video voicemail services for BlackBerry devices. XCast CEO Cliff Rees said that while the addition won't drive serious revenue initially, the BlackBerry video voicemail integration is an effective selling tool for reseller partners targeting enterprises that also displays his company's engineering ability.

Rees said it took XCast engineers three weeks to develop a beta version of the service, which is now available to all XCast IP PBX customers at no extra charge. XCast's direct RTP methodology enables the video voicemails, which are in H.264 format, to take up a mere fraction of the bandwidth other providers would use to move the files, Rees said. XCast recently raised a $2.7 million funding round, which Rees said would help the company become profitable by the first quarter of 2010.

For more:
- see the XCast press release here

Enterprise SBC revenue to increase 49% annually through 2013

Pete Wylie — Tue, 16 Jun 2009 16:46:49 -0400

Infonetics Research predicted enterprise session border controller revenue will increase 49 percent annually for the next five years, according to a report the firm released Tuesday on the enterprise SBC market.

The report expected increased adoption of SIP trunking to drive the market growth, which the report said should bode well for leading SBC vendors Cisco and Acme Packet. The report's author also said he expected the SBC market will not suffer the same "economic malaise" in 2009 as other telecom equipment niches.

Avian Securities analyst Catharine Trebnick also changed her rating Tuesday on Acme Packet from neutral to positive, as she expected the SBC market growth to be a boon for Acme Packet's bottom line. Acme Packet recently increased its share in this market with its acquisition of competitor Covergence.

For more:
- see the press release here
- see Trebnick's research note on Acme Packet here

IBM, Avaya strengthen friendship

Jim Barthold — Mon, 15 Jun 2009 10:18:45 -0400

Vendor heavyweights IBM and Avaya have strengthened their partnership to include Avaya security-certified unified communications (UC) applications for enterprises and government customers using IBM technology.

The newly strengthened relationship shows the increasing importance of VoIP as an enterprise service. As part of the deal, IBM will put Avaya technology into its converged communications services and while Avaya certifies that IBM's Internet security systems are complaint with its IP telephony applications.

While Avaya and IBM have worked together in their UC space for a while, the new moves build a "tighter relationship" around the complementary technologies, said Todd Abbott, senior vice president of Avaya's field operations division.

For more:
see this article

Related article:
Avaya announces mobile UC partnership with DiVitas Networks, adds devices

Business as usual at Cbeyond

Jim Barthold — Mon, 15 Jun 2009 09:05:09 -0400

Management proposals had a pretty easy go of it at the 2009 Cbeyond stockholders meeting. All three director nominees were elected; Ernst & Young was chosen as the accounting firm and the senior executive bonus plan was approved. See this story for more details.

Speakeasy goes heavy on the java

Jim Barthold — Mon, 15 Jun 2009 08:36:17 -0400

Speakeasy has taken java to another level and more literally than one would think. The VoIP service provider is giving a Starbucks' gift card to business users who fax in their phone bill. Speakeasy plans to then do a cost comparison to show how much money can be saved by switching to VoIP.

Hawking "cut your phone bill--not your morning coffee," Speakeasy's apparent goal is to show business folks that the money they save on VoIP can be better spent on coffee at the local Starbucks. There might be a little change left over for a big tip after that, too, since the company claims it can save up to 45 percent off a traditional phone bill.

Bruce Chatterly, Speakeasy's CEO, was quoted in a press release reasoning, "what they (business people) don't realize is how much money they could save just by switching to voice-over-IP services--up to 45 percent--which would allow them to keep the little things that matter."

For more:
- see this article:

More article:
Speakeasy's first Best Buy offer
Speakeasy gets SIP trunking, certifies ADTRAN, Fonality

Mitel takes stab at changing minds in Ottawa

Jim Barthold — Mon, 15 Jun 2009 08:11:48 -0400

Mitel is taking Ottawa, Canada, to task to try and get a $7 million parts and service contract for a new digital voice network that's been two years in the making. Ottawa is changing out its traditional telephone and data networks into a single integrated VoIP network that would provide video and Web conferencing, integrated voice messaging and improved call center performance and will today discuss, possibly for the last time, who gets the parts and service contract.

Bell Canada/Cisco originally won the deal as the preferred suppliers but, in early April, Mitel came back and offered $2 million worth of free hardware in exchange for the service contract. The city reconsidered but city staff are now recommending the Corporate Services and Economic Development Committee restart VoIP negotiations with Bell Canada/Cisco, leaving Mitel in the cold again.

Mitel's argument is that Cisco, as the current data network, has an unfair advantage in the VoIP bid and is asking the city to cancel the current process. The city's answer is that there's no reason to do that and the matter's closed. For now.

For more:
- see this article:

Related article:
Ottawa suspends Mitel phone service bid on $2M donation

Skype hype reaches Costa Rica

Jim Barthold — Fri, 12 Jun 2009 14:19:36 -0400

With product placements being what they are today, Skype was due for its moment in the sun on the flat screen.

The Skype publicity stunt didn't rival the incessant Cisco huckstering on "24," but it did demonstrate what Internet telephony can accomplish with real-time communications when Patti Blagojevich, the sometimes outspoken wife of exiled Illinois Gov. Rod Blagojevich, used the Skype online videoconferencing service to connect with her family from the Costa Rican jungles. Patti's in Central America participating in the high quality TV fare, "I'm a Celebrity ... Get Me Out of Here!" without hubby Rob whose sitting on his hands at home waiting for a court appearance that, no doubt, will be carried on Court TV.

Anyway, the live video feed was the first time Rob was seen live on the show. Ostensibly more of a celebrity than his wife, he couldn't be there in person because a fun-squashing federal judge said it wouldn't be a good idea for him to leave the country. Rod, of course, is accused of trying to sell President Barack Obama's U.S. Senate seat to the highest bidder. Skype came to Rod's rescue--and probably that of NBC as well, since the ratings are no doubt higher for a disgraced governor than a disgraced governor's wife--by poignantly connecting the family, including 6-year-old daughter Annie, via videoconference.

For more:
See this article

Related articles:
Is Skype's persistence finally paying off?
What's Skype really worth?

Low cost not enough for business VoIP users

Jim Barthold — Fri, 12 Jun 2009 13:02:26 -0400

Sometimes it helps to state the obvious. An increasing number of commercial users want more from VoIP than just cheap calls, says IP Centrex vendor 8el.

This doesn't necessarily fly in the face of conventional wisdom that says businesses sign up for VoIP because it costs less than traditional telco, but it does add credence to the growing belief that VoIP is maturing and a mature technology uses features as a differentiator. Such features, 8el said, include enhanced centralized unified messaging and a temporary voice mail greeting with a configurable number.

Even 8el, though, concedes voice quality still heads the business user wish list and that international calls and business conferences could be "vastly" improved. Doing that, not coincidentally, could mean adding yet another feature to VoIP service: high definition.

For more:
- see this article:

Related article:
Verizon Business ads new features to wholesale VoIP

M&A, venture funding in IP communications heating up

Pete Wylie — Thu, 11 Jun 2009 11:12:04 -0400

After a bone dry first quarter, it appears that the market for mergers and acquisitions and venture capital investment in the IP communications world is ramping up again. After BroadSoft formally announced its purchase of Sylantro in late December 2008, there were only two funding announcements and no significant acquisitions around IP communications until Acme Packet announced its purchase of Covergence for $23 million April 30.

Given the drastic economic downturn, it's not altogether surprising that investors and companies looking for acquisitions sat the first quarter out. But now that "green shoots" are beginning to appear and experts are forecasting a gradual economic turnaround, it looks like it's open season again on the M&A and VC front--there have been four acquisitions and three funding announcements since Acme bought Covergence six weeks ago.

Just this week, jaxtr was bought by SabSe Technologies and Natural Convergence announced it was buying NewStep Networks for its FMC technology. In May Avaya purchased contact center software maker Agile and Voxeo bought IMified for its IM API.

On the funding front, fring raised a Series C round, hosted VoIP play Telesphere raised $15 million, and Xcast Labs raised $2.7M, with all deals announced after May 1.

Garrett Smith, at Smith on VoIP, sees the acquisition trend continuing in mobile VoIP as companies that weathered the recession well look for bargain prices on their less fortunate peers. Start-ups or smaller companies with strong SIP technology or a compelling UC story could also be acquisition targets as the year goes on.

Rumors circulated in February that 8x8 might be a likely buyer, as the profitable company stockpiled more than $16 million without any other clear purpose. Voxeo, whose IMified buy was its third in 12 months, also could purchase another company with a strong tech set. The big tech companies with cash stockpiles, such as Cisco, Apple and Microsoft, could always poach an IP communications company, but it's difficult to see a clear place they'd make an investment to fit their current voice product lines.

Which companies do you think will be active in M&A in the second half of 2009? Is there a company you think will be targeted for acquisition? Shoot me an email or a tweet and we can discuss.

- Pete
@fiercevoip

Empirix launches SIP trunking test tool

Pete Wylie — Thu, 11 Jun 2009 10:27:11 -0400

Empirix, a networking testing and monitoring firm, announced it launched what it is claiming is the first tool for automated testing and verification of enterprise SIP trunking systems. The vendor claims SIP installations have, on average, 7.5 times the number of service calls as a traditional circuit-based telephony service, and said its Hammer SIP Trunk Tester can identify problems before a SIP installation is turned up, thereby saving enterprises and service providers time and expense.

"Empirix has once again proven its market leadership and innovation by developing a first-to-market test solution that is specifically designed to ensure superior service quality over SIP/IP infrastructure," Frost and Sullivan analyst Olga Yashkova said in a press release on the topic published by Empirix.

Gordon Eddy, director of product management for Empirix, said the company developed the tool based on feedback from carrier customers rolling out SIP trunking.

"Up until now, no automated tool was available for installation teams or engineers to test not just individual call quality, but also to measure the capacity that has been provisioned for the enterprise by the carrier," Eddy said. "The Hammer SIP Trunk Tester also lets carriers confirm that they are delivering high quality performance for SIP applications to their network edge, which helps with troubleshooting performance issues."

Empirix said the tool, which can run on a field engineer's laptop, would be "cost-effective," but did not give a specific price point. Eddy said Empirix has had interest in the product from very small service providers and multi-national carriers alike.

The SIP trunking market is expected to grow at a rapid pace for the next few years, so Empirix's product looks well-positioned to capitalize on the increased need for testing and performance verification.

For more:
- see the Empirix press release here

AT&T adds encryption to telepresence offering

Pete Wylie — Thu, 11 Jun 2009 09:14:12 -0400

AT&T announced it improved the security of its managed telepresence offering by adding encryption functions between Cisco TelePresence endpoints. AT&T also added Lotus Notes support, video sharing and more conference control options for participants.

The additional encryption expands the usefulness of the system, as sensitive meetings can now take place without incurring travel costs, the carrier said.

AT&T's hosted telepresence service includes monitoring and management of equipment and a remote help desk service, and runs over AT&T's VPN.

For more:
- see the AT&T press release here

Natural Convergence president discusses NewStep buy

Pete Wylie — Wed, 10 Jun 2009 16:58:58 -0400

Natural Convergence president Bill Crank said his company acquired NewStep Networks this week in large part because of the potential to integrate NewStep's fixed-mobile convergence and SIP trunking technology. Crank said Natural Convergence plans to keep all NewStep employees on board and will support all current NewStep customers, which he said were mainly large accounts "numbering in the teens."

Natural Convergence also is discussing product roadmaps with its existing customers to see if any can benefit from the additional offerings now available. Crank said the NewStep acquisition gives Natural Convergence a stronger presence in the APAC region, where the company hopes to expand in the near future. He said he sees a lot of opportunity in the market now for further acquisitions and that Natural Convergence could buy another voice company in the next six to nine months if it fits the company's expansion strategy.

Related article
Natural Convergence buys NewStep for FMC tech

Sales of UC desktop clients slip in Q1

Pete Wylie — Wed, 10 Jun 2009 16:31:59 -0400

A new Synergy Research Group report on the global market for collaborative applications found vendor sales down across the board for the first quarter of 2009 in both the enterprise and SMB market segments. The report said collaboration application vendors notched sales of $913.3 million for the first quarter. Avaya, Cisco and Siemens were the top three vendors in the enterprise category, and ShoreTel, Cisco and Avaya lead the SMB category.

Though Synergy said these companies were in a strong strategic position in their respective markets, the report also found that the top six vendors in both segments saw quarter-over-quarter sales declines. The report also noted a growing interest in managed UC offerings as small business suffer decreased credit availability, and it reported that price points for UC offerings are declining slowly as competition in the space increases.

For more:
- see the Synergy press release here

Skype has no plans yet for Palm Pre app

Pete Wylie — Wed, 10 Jun 2009 14:32:55 -0400

Skype enjoyed tremendous success with its iPhone application, which was downloaded more than 2 million times in its first 10 days of release. Skype also released a beta version for BlackBerry recently, and has also released versions for Windows Mobile, Java, Android and Symbian. So it's somewhat surprising that Skype is holding off on developing an app for the Palm Pre application store, especially given the hype around the phone's launch.

A company spokesperson told GigaOm that Skype is "keeping an eye on the Pre and its webOS platform," but is not ready to announce development for the Pre.

For more:
- see the GigaOm post here

Jaxtr bought by SabSe Technologies

Pete Wylie — Tue, 09 Jun 2009 14:16:51 -0400

Value-added application provider SabSe Technologies announced it has purchased jaxtr, a company offering free VoIP service to social networks and blogging platforms. Terms of the deal were not released, but based on jaxtr's staff reductions and several large funding rounds totaling more than $26 million, it's not likely jaxtr's venture capital investors reaped a profit on this play.

SabSe will continue to operate the jaxtr service under the brand name, and the buyer hopes to increase revenue by selling its applications through to jaxtr's more than 10 million users. SabSe, cofounded by Hotmail cofounder Sabeer Bhatia, plans also to use the jaxtr acquisition to bring additional functionality to SabSe's core small business offerings.

The Natural Convergence buy of NewStep Networks yesterday and the jaxtr deal today could signal the beginning of consolidation in the VoIP space, as companies that took down large amounts of VC funds without clear business models falter and require sale.

For more:
- see the press release here