Friday, September 7, 2007

Ooma Revisited

Just a short post to say my review of Ooma the other day has received attention, and a number of interesting comments were left there by readers.

Wanted to follow up with a post from yesterday that cited my post as well as another post - from another Jon - with a contrary view of Ooma. Great to see both sides there, although the poster doesn't do much more than say what each of us said. I don't know this blog - Steal This VoIP - but thanks for doing this.

I also got an email from David Beckemeyer, who brought PhoneGnome to market over two years ago. I'm not going to share the details here, but David rightly points out there's not much new here, as PhoneGnome was basically offering all these things for a quarter of the price. So, I stand corrected, David, if I gave the impression here that Ooma came up with this stuff first. They certainly did not, and to be fair, my post was a product review, plain and simple. I didn't see that as the place to provide a broader perspective, since I had already done that in a previous post.

It's important to share that point from David here, because PhoneGnome really is a good product and was out there way before Ooma. I did note this in my initial post about Ooma, along with citing David's own comments about this.

On the other hand, if you had only read my review, I can see how readers would not pick up on this. So, to be clear, Ooma did not invent all this stuff, and if you're curious, feel free to read my review of PhoneGnome from two years ago.

Comparing the merits of PhoneGnome versus Ooma is a different conversation, but not here or now. Thoughts?

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ipcom said...

Posted by: George

While waiting for my Ooma to come (I didn't get a Beta unit), I've been reading all the viewpoints -- and the quite strong viewpoints of the PhoneGnome people. Pricing structure and call costs aside, I'm sure that the PhoneGnome product is capable of doing most (maybe all?) of the things that Ooma can do. I think the conclusion after that is that Ooma, therefore, is grossly mis-priced for what it's delivering.

That said, I think it misses the point. I'm sure Ooma is the wrong product for the customers that PhoneGnome has targeted (those early adopting VoIP and those that are willing to handle the configuration aspects). I think Ooma isn't targeting those people at all -- instead, they're going for a seamless, "consumer" experience out of the box. From the ease of setup to the seamless (from an install/configuration/etc. viewpoint) use without having to think, Ooma is a different product.

I wanted a few things:

1. A system where I don't have to make a decision about which line I use for long-distance and which for local

2. A system where all the lines in my house (I have both corded and cordless phones) can seamlessly work

3. A system that doesn't require me to get rid of my local landline for 911

Ooma is simply packaged for the consumer to deliver these aspects. PhoneGnome is not -- and if it is, needs to present a different face that shows and explains this. I like the added feature of getting the virtual second line -- but that's an extra for me (which I'm anticipating appreciating more once I have it).

Where I think the discussion is off is in minimizing the packaging and polish differences (and the seamless experience that Ooma is pushing -- in install, in features, in use). That says nothing about capabilities -- but anyone in the high tech world should know that capabilities don't necessarily win. Product packaging and marketing win -- I think Ooma and PhoneGnome (as the products are currently positioned and defined) are for different markets.

Looking forward to trying out my system Monday (and hoping that the VoIP quality is decent or it's going back...).

ipcom said...

Posted by: Bob J.

hi. As a follower of the tech industry with a financial background (i work at a hedge fund that invests in tech stocks), i enjoy reading these industry-specific blogs. I also happen to have the honor of having both the products talked about in this blog (ooma and phonegnome) installed in my house in nyc. so my next comments are from a customer's experience. i think it does not make any sense to compare the two products. they are extremely different. Its like you can buy a saturn car or a maybach car and both will get you from the home to the office but no one in their right mind would compare the two cars as the experiences are vastly different - as different as the experience/quality/performance between ooma and phonegnome. so just like its not relevant that both the maybach and the saturn will get you from point a to point b since they both do it so differently, its not relevant to compare both ooma and phonegnome just because both involve home telephony. ooma is clearly designed around the 'consumer experience' and is clearly for adoption by millions of consumers. its look+feel, hardware quality, voice quality, ease-of-install, software quality - all make this very obvious once its sitting in your house and you use it. as a customer of ooma, it feels like close integration of hardware/software/service - just like an iPod or an iPhone does. on the flip side, as a customer of phonegnome, its very obvious its an engineering product designed by engineers and targeted at engineers. its a hackers device for the few thousands of people in silicon valley who want to spend their time "tinkering". now this is completely fine and for the right customer (ie extremely technically proficient) in a place like silicon valley i am sure the idea of tinkering goes over well...but as we all know from the last 25 years of technology markets, market capitalization comes from satisfying the broadest possible customer base, not a small niche. so while its true that both involve phone calls that is about all that is the same in the products, the companies, and probably in their eventual outcomes. that is my perspective - different products, different markets, different value propositions.

ipcom said...

Posted by: David Beckemeyer

Mayback and Saturn. That's pretty harsh dude (and a bit far-fetched, IMHO)

The better anaology might be Compuserve vs. the Internet. One (ooma) is a walled-garden and forces you to buy all services from one company and only lets you access content from one site (no interoperability), whereas the other (PhoneGnome) lets you buy your services from who you want and lets you access content on any site (standards-based interoperability and peering).

ipcom said...

Posted by: David Beckemeyer

What is all this "tinkering" you supposedly have to do all the time with PhoneGnome?

Once you enter your email address for voicemail (if you want to turn that on) and select a calling plan option (or options if you want to use a separate provider for International vs. Domestic - and again the whole thing is optional), what else is there? What are you referring to?

There's a video that shows a real world PhoneGnome out-of-box experience/setup. The video is edited down to about 4 minutes but it chronicles real elapsed time, from taking the PhoneGnome out, hooking it up, activating voicemail, and selecting a phone plan, and the whole thing takes about 20 minutes, including the 5-10 minutes when we're just letting the PhoneGnome box do its self-configurations (i.e. no user action required - go get a cup of cofee or whatever). See the video here:

ipcom said...

Posted by: George


I appreciate the response. My three items weren't meant to imply that PhoneGnome didn't do them -- but that these were the THREE things I was looking for in a solution (I think I understood what PhoneGnome did... What I meant by #1 was to get free calls to whomever I called -- though I think your approach is to charge much less and then pay for it by really low U.S. long distance). I wouldn't underestimate #2 -- so my suggestion is that you package/productize the solution such that customers can do this -- solving this is just as plug-and-play. Here's what I like about it:

1. I want to have a cordless phone plugged in to the system for when the power goes off -- and I want to have this integrated in when the power is on.

2. I like the ability to access the voicemail and controls from more than one location in my house. In my bedroom, in my kitchen and by the other phones...

So, here's my suggestion:

1. If you want to target the mass "consumer" (the same person that Ooma is targeting) you need to change the website. When I look at the website, it looks more like a Skype offering than a Ooma offering. The "product" that does all the seemless working with the existing phones and hides the Voip aspects is BURIED on the website. This is my main point in my first post. If you really want to target the people that Ooma is targeting, you've got to spend less time on the blogs and more time re-doing the website.

2. All of the features emphasize the calling features -- the free box-to-box, voicemail, ... not how I can make it seemless with my existing phones still in the house.

3. I'd find a way to solve free long distance in the U.S. I know you put a call out for someone to do that with your platform...

4. Maybe get "Bruce Willis" on your side? :>)

Good luck. I'd worry less about correcting the misperceptions on the blogs than making the website so SIMPLE AND CLEAR that it's an easily absorbable message (and clearly position against Ooma -- perhaps a matrix on the home page as I think they've got something....). Right now it seems too complicated -- Ooma has done a great job of making it simpler, whether that's perception or not relative to the reality of PhoneGnome is irrelevant. Remember that your website IS your product. Not the box...

Anyway - not to suggest I have the answers, but I'm a "consumer" and that's how I see things.

ipcom said...

Posted by: George

And, just to clarify... I understand Ooma's only talking about free calls in the U.S.... That's where I mostly call.

(A few other thoughts -- perhaps PhoneGnome's main market is expats? I'd definitely focus on H-1 visa people, recent emigrees, and those with large families in other countries...)

ipcom said...

Posted by: David Beckemeyer

Thangs George. Nice feedback. We've sort of been there, done that, with the PhoneGnome box early on, and found that the reality is that people's home phone is NOT BROKEN for the most part in the US (this is the same problem Vonage and all the Vonage clones have). We learned a lot about mainstream consumers selling the PhoneGnome box at Staples. That's why the box is now just one aspect of PhoneGnome as a service. When you talk about a niche, I'd say it's Ooma's segment:

Someone in the US, who thinks their home phone is broken and wants unlimited US domestic calls, and for some reason, would rather pay $400 for the Ooma box, than sign up with any number of plans for the same thing in a bundle from their telephone or cable company. That excludes a lot of people. The idea of a segment of people interested in "cheap" but also having $400 to spend up front seems incongruous. That's also a very expensive segment to reach. As you note, you can't get there from blogs.

I'd like to hear more of your ideas, George. Maybe you'd like to work with us on marketing? Drop me an email at if you'd like to chat more.

ipcom said...

Posted by: George

Perhaps I'm a niche, because I'm adamant about maintaining:

1. Last mile copper (no FIOS for me... mainly because of my next point)
2. 911 through Verizon -- I've never seen my phone go down... ever. And, I think their 911 is the only bullet proof one.
3. Multiple phones in the house, including both corded and cordless -- and I want to keep things simple for my wife so that she doesn't have to think about what she does
4. I want things simple -- hence, I switched to Verizon's freedom plan (a few years ago) -- it's about $60/month, as I had had a few REALLY bad long distance months, and the difference in monthly was a great insurance against it

I haven't switched to Voip until now as I didn't want to have two different systems and I didn't want to lose my Verizon 911.

I remember looking at PhoneGnome when it first came out and was pretty intrigued, but the ONE issue for me was (my perception?) that I needed to put all my phones behind one cordless system hooked into one box.

I wanted a solution that let me keep EVERYTHING I had the same (per my previous items), but allowed me to drop my long distance costs (it's worthwhile to note that I have poor cell phone coverage at my home so that's not an option). I'm in for about $25-30/month of unlimited local with Verizon as an ante for anything I do. Ooma was the first system I saw that seemed to fit my needs -- I'll break even in about a year and a half (I'm sure I'll come to appreciate the extra line as my kids are getting older, but I don't include that "value").

I think the real question is where the market is -- someone's going to crack the "mom"/mainstream market for people that want 911. I think the big qustion is when that market will break and with what product. I think that's what Ooma's targeting -- and, if that market's not there, then they're not going to be the ones (though I hope they last a couple years!)

Happy to explore this subject with you further, though I'm pretty busy. I'll send you my contact info. Unless you've got a slot at the top of your marketing team, I think I'm pretty set, though I appreciate the offer. :>)

ipcom said...

Posted by: DaveW

You say you don't want to compare the two "here and now"

Instead of making a comparison, here is a list of differences between the two.

Domestic US calls
ooma - included in $399 price
PhoneGnome - Free to PhoneGnome members (with or without box). $300 to apply to worldwide calls. That's a lot of calls. Use a PhoneGnome plan or some third-party SIP provider of your choice (use Voipbuster, or SIPdiscount etc. and get free calls to more than just the US)

International Non-US Calls
ooma - A-Z per minute, must use ooma plan
PhoneGnome - Free calls includes members in many countries. Use PhoneGnome plans, or the SIP provider of your choice if not free. Even use Skypeout. Apply some of the $300 you save here too.

Located outside the US
ooma - only available in US (and Canada?)
PhoneGnome - any country/any number

Call logs
ooma - none
PhoneGnome - call logs (includes PSTN/POTS calls) available on-line for missed, placed, and answered calls and can be downloaded to Excel

Click-to-dial (web)
ooma - None
PhoneGnome - web contacts. Number entry on web. Widget available to make all phone numbers on all websites clickable. Google gadget dialer for Google home page. Mobile phone versions too.

SIP Support
ooma - none
PhoneGnome - Call to SIP addresses. Receive calls from SIP. Use SIP providers for calls. Works with Asterisk.

ooma - None
PhoneGnome - free PC softphone and open SIP credentials to use any SIP hardware or software to make calls and even answer calls on your PC. Place a call using your PC from a hotspot where the call is sent using your home landline as though you were at home if you wish.

Missed Call Notification
ooma - no
PhoneGnome - receive an SMS text message with call details when you miss a call

Find-me/Follow-me (multi-ring)
ooma - no
PhoneGnome - Available. Ring many phones at the same time, with a seqquential "back up" number. Ring softphone and real phones at the same time, ring SIP addresses

ooma - included. Listen on web, phone, or "answering machine" button
PhoneGnome - Free voicemail to email. optional "premium" version available (don't pay if you don't need it or want to keep using the voicemail/answering machine you have now). $20/yr and has more features than ooma, including receiving messages via email, SMS/pager notification, and Visual Voicemail on your cell phone - enables cell phone/home phone voicemail consolidation

Second Line
ooma - works (scout is $40 per phone jack)
PhoneGnome - partial. Use call-forward-busy (same as ooma) for inbound and softphone/ATA for outbound to get similar capability

Virtual Numbers
ooma - None
PhoneGnome - Free numbers available from several sources that work with PhoneGnome (because of SIP). Buy local numbers from PhoneGnome to have additional numbers where people can call you, even in foreign countries.
Prices vary by location - US numbers around $3/mo

Mobile Phone Support
ooma - None
PhoneGnome - Web/WAP version and installable phone plug-in (app) version. Visual Voicemail. Place a call from your cell phone using your home service - international calls using free local airtime.

ooma - None
PhoneGnome - Available. Dial number of one PhoneGnome box, get second dial tone and place a call using the local phone service attached to that box. "Directed Calling" feature simplifies to a simple ** prefix method for routing calls via remote PhoneGnomes

ooma - PSTN calls
PhoneGnome - Gizmo, FWD, SIPBroker, ENUM, ITAD, SIP,, Truphone, SIPphone, and others all free, anywhere in the world.

Instant Messaging Systems
ooma - no
PhoneGnome - Free Voice calls supported between PhoneGnome and Gtalk, MSN, and Yahoo! users

Third-party Applications
ooma - none
PhoneGnome - Open APIs. User-Contributed Library of applications and mashups. Tellme "Dial Tone 2.0" voice dialing. iotum call screening/automated attendant. Website badges and widgets. etc.

ooma "white rabbits" get the "free US" calls really free, so in that case it's a big win (although they still need to pay for International calls - and it doesn't help anybody located outside the US/Canada). For those that actually pay $400 for ooma, the PhoneGnome option leaves you with $300 to spend on both US and non-US calls. That will go a long way. There's a big question about whether the "lifetime" of Ooma free service (lifetime of the box really) would outlast that extra $300. It does have the advantage that you don't have to think about it, top up any accounts, etc. but $300 is a lot to pay for that "convenience" if you ask me, especially considering rates will keep falling over that time.

Stephanie said...

I know all of you are mostly talking about how to use the two products and whether or not they are worth buying....however, I'm in a Financial Management class right now at the University of Florida, and I have to construct a DCF (discounted Cash Flow) model that VALUES OOMA as a company. Since it is not a public company, I cannot find any of the major financial information (such as the balance sheets and income statements) that I need to actually value the company.

Above, Bob J. said that he is a hedge fund manager....maybe you, Bob, could help me out here! Thanks!!