VOIP:The Next Big Wave Breaks

Full Disclosure: I am currently in the process of installing Bell Canadas ULTRA DSL at my own offices plus ULTRA DSL +VOIP at a colleagues office. And despite the great disservice from Bell (neither of us have had one 24 hour period of consistent DSL performance in a week and still counting of great trials and even worse errors at even half of claimed bandwidth. And as for support for installation and troubleshooting – one could only wish it to be laughable) – despite the atrocious disservice from Bell Canada, I am going to say that the IT world is going to see yet another Toffler Tsunami – VOIP is going to swamp telecommunications, the desktop and how business is done.

Like Alvin Tofflers Third Wave I am going to be describing whats already breaking upon us – you dont get to dodge this one, just ride it more or less succssfully. With announcement of free Google Talk followed by Yahoos messener with Voice, the VOIP world has been officially launched. Of course you say Skype and Vonage and Verison and Covad have already started the VOIP world. And I will not disagree.

Skype Gets theVOIP Wave Rolling

Particularly Skype which has already seen 173 million downloads of its free VOIP talk program. The free VOIP that works on Windows, Mac, Linux and Pocket PC. The free VOIP that can do file transfers between any two systems again on Mac, Linux, Pocket PC, Windows. The free VOIP that encrypts and then decrypts text and voice messages plus file tranfers. And so far Skype has not charged you a cent for services rendered. The free VOIP that provides an equally free search service among those 150 million++ who have registered for Skype.

But eBay did not just layout $2.6B plus future performance incentives to Skype for a company that is giving away telephony services. And true enough – Skype has a whole slew of for cash add on services. Like Skype Voicemail which records calls for you when you were away from yor Skype powered PC. Or Skype Out which allows you to call any phone in the world for a fraction of the full cost because Skype gets you close – and then makes the “last-mile” connection. Or Skype In which allows you to reverse things. Say you have major customers in Paris, Mumbai and Wellington NZ – you order a local Skype In number – and they can call you wherever you are in the world – as a local call to them. Okay I lied – Skype In is in beta and only works in Sweden, France, HongKong, the UK, Denmark, the US, Finland and of course Poland.

Looks like eBays CEO Meg Whitman may have a tiger by the tail. But Meg may have bought Skype for more than the synergy with eBays Paypal and eBay customers needing to contact by phone one another. eBay is a Microsoft shop and has suffered the slings and arrows of getting Enterprise caliber Ts out of Redmonds software – things like Security, Reliability, Scalability, and Interoperability. Whereas the Skype folks know all about cross platform and performance. The two cultures could crash … uhhhh clash and burn in mutual disrespect. This will be a most interesting test of Megs “conductor of people working together” talents. Judging by how effectively Megs gotten the troops to attack the onslaught of phishing attacks that is slowly but surely poisoning the eBay and Paypals brand name and wells of creditability(would you deal with such firms if you got daily 2-5 phishing attack letters from each “brand” name) – Meg may have major problems.

Google and Yahoo Confirm the VOIP Wave

Meanwhile, Meg does have the mixed fortune of new competitors. With their new, free Google Talk and Yahoo Messenger with Voice services , Google and Yahoo have confirmed that the VOIP wave is incoming. They guaranteed that VOIP will have the attention of US IT editors, will raise the consciousness of free VOIP for consumers as well as businesses, and will start the ball rolling on IM and the much more secure Skype-style file transfers being a replacement for junk-mail choked eMail on the desktop. Suddenly, having an IM/Instant messaging and File Transfer franchise never looked so good. No wonder that GoogleMail and YahooMail merchants are climbing on the IM/VOIP bandwagon. Mind you in comparison to Skype both Google Talk and Yahoo Messenger with Voice look like country bumpkins. But for US consumers they are familiar country bumpkins. The question is can AOLs IM relic do secure file transfers ???

As well, if you are a telecommunications CEO, its a case of clanging new technology rocks waiting to sink your ship – first a glut of backbone bandwidth, then cable able to enter your new technology markets of DSL and media delivery, now long distance down the tubes for sure with VOIP, and the last mile may very well be mobile and WIMax. Wow – how is that for 20 years of Future Shlock? But could it be a case of Back to the Future – like IBMs great chip foundries, Telcos may have the essential bandwidth backbones and all that switching jazz.

Finally, the business world sees yet again another great cost leveler. As big business continues to work overtime to drive its labor costs to zero there are still 750 million more Chinese and roughly an equal number of Indians willing to work for those asymptotically approaching zero wages (Its simple – what appears to be a pittance in developed countries, has much marginal improvements in purchasing power in India and China). But in the exporting of work there is also exporting of not just savvy but also purchasing power. Savvy that may never come back; diminished purchasing power that may no longer be able to afford your product and services. Now we know that raiding the Commons is second nature to too many quarters in the executive suite, so the question is will big always confer market tilting competitive advantage ? Stay tuned – the answer may be percolating in a VOIP Group or an IM powered Blog.

(c)JBSurveyer 2005

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