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Jon Arnold on why VoIP has succeeded

by Luca Filigheddu on March 6, 2007



Jon Arnold on why VoIP has succeeded

As previously said, my post “10 reasons why VoIP has succeeded” has led to variegated comments around the blogsphere. Last but not least, Jon Arnold shares his view on this “hot” subject.

First of all, thanks Jon for sharing your comments, much appreciated. Jon, as many others, points out that we should first share a common definition for “success”.

If we’re talking success in terms of profits, VoIP so far is not a success. If we’re talking success for the innovators and risk takers, it’s certainly true for the likes of Niklas Zennstrom, Jeff Citron and Jeff Pulver. But for every one of these, there are dozens, if not more who haven’t made it.

I could agree, but I would like to underline what I do believe is an important point. Reason #7 in my list is “competition”. As Jon says, dozens of new VoIP operators came out, trying to competing with…. those who provided them with PSTN terminations and services, carriers and incumbents. Some of them created their own small business, others entered the deadpool in a few months. Despite this, this fervid activity in the VoIP space has shaken the market creating new business opportunities (what about VoIP devices ? headsets ? ATAs ?) and starting a long training activity in favor of final users.

This said, Jon suggests to add Vonage to my list. Actually, they acted exactly as stated above, working hard to create a strong brand awareness, teaching customers and, finally, making a (much discussed) IPO. On the other hand, I disagree with Jon, since I don’t think Vonage is the Kleenex of VoIP. In US, maybe, not worldwide. Kleenex is Kleenex worldwide, Vonage is not. In my opinion, Skype is the Kleenex of VoIP. For most “normal” users, Skype equals VoIP, that’s a matter of evidence.

Moreover, Jon makes another important point: no profits.

No profits! In your list of 10 reasons, you cited free calls and Asterisk. Both are great for end users, but they sure make it hard for operators to turn a profit with VoIP. This is probably the biggest holdback of them all – we don’t have large scale, proven business models for VoIP. It’s a key reason why the big telcos will be the last to roll out VoIP – both wireline and wireless.

I agree, no one has still proven that VoIP, taken as a replacement of the primary telephone line, can be profitable. On the other hand, the game must be played in the field of new services and not fighting each other trying to make the cheaper offering for final users.

In conclusion, I still confirm my view: VoIP is successful. Yes, we can still find many weak points but I do believe all of us involved in VoIP are going to the right direction in order to make it more and more successful.

p.s. is e-mail successful ? I would say yes, definitely. But it’s far from being profitable… On the other hand, VoIP is an application (as Jeff is highlighting since ten years ago), so we must tune the meaning of “successful” keeping in mind this fundamental fact.

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  • Luca Filigheddu
    Jon, thank you very much for commenting!


    Two more comments on my side: yes, here in italy and in other countries in Europe Skype means VoIP.. peer to peer is a concept still far from "normal" users.. Moreover, I agree that Skype and Vonage are much different. In my industry perspective during VON 2006 I had stated that, to me, Vonage is "traditional telephony", since the user experience is exactly the same.



    In conclusion, a lot of great points came out from this discussion that potentially could go forward again and again.



    For the time being, thank you very much for your contribution!
  • Jon Arnold
    Hi Luca - been meaning to close the loop with you on this since last week - sorry for the delay.


    Thanks for keeping this going, and I just wanted to add a couple of things.



    First - about Vonage being the Kleenex of VoIP - a term I coined a long time ago! Thanks for bringing a global perspective to my comment, but I still stand by it. When it comes to landline replacement service, the U.S. is by far the most important market for VoIP, and there's no doubt that Vonage is synonymous with VoIP in the U.S. Skype is far more widely used, but I don't think of them as VoIP, and I don't think most people do in general. You say that they do, and if that's true, I think they should stand corrected. Skype is about peer to peer, which happens to be VoIP, but it's really an Internet application, and not a phone service. Very different businesses, and I've commented many times about how they're really apples and oranges. But I'm a big fan - and user - of both!



    Good points otherwise, in your post. However, I wouldn't equate email and VoIP for benchmarks of success. Email can function very well as a free service because it's easy to manage as an application. In its pure form, so is VoIP, but right now, providers need to find ways to make money with it, otherwise they won't be around much longer.



    Lots to talk about here, but I'll stop now! Feel free to drop me a line to continue the discussion...
  • Markus Goebel
    I am quite happy with what I have and don't need more. Voipstunt is not related to my DSL provider. I have to pay extra for DSL.


    What I need from VoIP is a phone and an answering machine. Any special presence functions I don't need.



    When I don't want to be contacted I tell my Fritz!Box FON ATA to forward all calls to voice mail. Voipstunt doesn't even give me voicemail, but I use Sipgate's free voicemail.



    When I don't answer a call to one of my 10 VoIP numbers then Sipgate's voicemail answers and sends the left message as an email. When I don't want my phone to ring I send any call directly to Sipgate's voicemail.



    I only use free VoIP services. Maybe I am the type of client that makes the old and new telcos cry.
  • Luca Filigheddu
    Ok, but you don't get more. Moreover, is Voipstunt related to your DSL provider ? Have you other services like presence, voicemail and so on ?


    Naked "voice" is not enough. IMHO, of course.
  • Markus Goebel
    > Markus, I totally agree. But we are
    > still far from the picture you are

    > painting.



    Are we really far from it? I am living it!



    I pay about 3 dollars a month to Voipstunt for unlimited calls to Germany, where I live, the US and most important countries.



    The rest is just plain internet access costs I would have paid anyway for surfing the net.
  • Luca Filigheddu
    Markus, I totally agree. But we are still far from the picture you are painting.
  • Markus Goebel's Tech News Comm
    To me "free" calls as in "free beer" are still the killer application of VoIP. But I am only a normal user and a freelancing journalist who is happy to bring down his costs per call near to zero.


    The telcos charge me anyway high basic fees for my DSL connection which is bundled with a fixed phone line I hardly ever use. Still there are no cheap DSL only offers in Germany.



    At least I make free or super cheap calls on this infrastructure, using several VoIP providers and an ATA, so I can talk on my old phone while my computer is switched off.



    I suppose that many users are thinking like me.
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