28 August 2004

Vonage and VoIP

Vonage's latest infusion equity led to this first from Bill Burnham followed by this from Om Malik. As I know nothing about the online equity trading business I'll not add to sum of human wisdom being imparted in the similarities.

I had hoped that a comment that the company was cash flow positive before customer acquisition cost might inspire a Sage of Omaha type put down. Here's mine; my car costs nothing to run before petrol (gas), insurance, servicing and depreciation. If your business involves acquiring customers then stripping out the cost is at best duplicitous. Surely it is the job of the blogging community to point out such monstrous bullshit. Let the mainline press quote verbatim from press releases without thinking.

Anyway that was not the main point of the post. In my evolving thinking about sessions over IP my recent trip to Nizhny Novgorod, the centre of Russia's telecom technology industry, has taken me a step further. I am not smart enough to determine whether Vonage or Skype will be good investments. I am fairly sure that they won't be great companies.

This recent piece from the VON round up about BT becoming the European centre for VoIP interop testing would suggest that VoIP is not only not ready for prime time but that we have some time to wait before they are. The company that I was visiting in Nizhny's value proposition is building products that allow Nortel IP PBX's speak to Avaya etc. How can you expect to have an industry when there are no standards and no interoperability.

So I posit that there will be a crisis before we see the sessions over IP winners. If the owners of Skype and Vonage have cashed out before the crisis then great investments. I also posit that SIP will not spawn the winner; it's too large a signaling package and thinks like traditional telephony. Lets call this phase of the transition IP over TDM or new telephony like old telephony. The truly disruptive phase has not yet started and we don't yet know what it will look like - but keep reading Isenberg if you are looking for a clue.

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28 August 2004

Vonage and VoIP

Vonage's latest infusion equity led to this first from Bill Burnham followed by this from Om Malik. As I know nothing about the online equity trading business I'll not add to sum of human wisdom being imparted in the similarities.

I had hoped that a comment that the company was cash flow positive before customer acquisition cost might inspire a Sage of Omaha type put down. Here's mine; my car costs nothing to run before petrol (gas), insurance, servicing and depreciation. If your business involves acquiring customers then stripping out the cost is at best duplicitous. Surely it is the job of the blogging community to point out such monstrous bullshit. Let the mainline press quote verbatim from press releases without thinking.

Anyway that was not the main point of the post. In my evolving thinking about sessions over IP my recent trip to Nizhny Novgorod, the centre of Russia's telecom technology industry, has taken me a step further. I am not smart enough to determine whether Vonage or Skype will be good investments. I am fairly sure that they won't be great companies.

This recent piece from the VON round up about BT becoming the European centre for VoIP interop testing would suggest that VoIP is not only not ready for prime time but that we have some time to wait before they are. The company that I was visiting in Nizhny's value proposition is building products that allow Nortel IP PBX's speak to Avaya etc. How can you expect to have an industry when there are no standards and no interoperability.

So I posit that there will be a crisis before we see the sessions over IP winners. If the owners of Skype and Vonage have cashed out before the crisis then great investments. I also posit that SIP will not spawn the winner; it's too large a signaling package and thinks like traditional telephony. Lets call this phase of the transition IP over TDM or new telephony like old telephony. The truly disruptive phase has not yet started and we don't yet know what it will look like - but keep reading Isenberg if you are looking for a clue.

5 comments:

Anonymous said...

Hi Blogger, Out surfing for information on business notes & happened upon your site. While this post wasn't exactly spot on, it did strike a note with me. Thank you for the really good read.

Anonymous said...

Hi there Blogger, I had been out looking for some new information on cash flow business when I found your site and this post. Though not just what I was searching for, it drew my attention. An interesting post and I thank you for it.

Anonymous said...

Hi Blogger, Out surfing for information on cash flow business & happened upon your site. While this post wasn't exactly spot on, it did strike a note with me. Thank you for the really good read.

Anonymous said...

Hello Blogger, been looking for the latest info on real estate note and found this post. Though not exactly what I was searching for, it did get my attention. Interesting post, thanks for a great read.

Anonymous said...

Hi there Blogger, I had been out looking for some new information on discounted notes when I found your site and this post. Though not just what I was searching for, it drew my attention. An interesting post and I thank you for it.