This is Super Bowl week in the wireless world with Mobile World Congress, and everyone there is trying to get and keep your attention. I'm not at MWC, and I don't usually post about launches tied to the event, but I got an advance briefing of Accession, Metaswitch's latest value proposition for mobile operators.
It's a heady word, and a lot of interesting ideas to kick around, but the overall spin for Accession is pretty good from what I can tell. The goal is clear, and operators know they can't drop the ball with mobility - the field is shifting too fast to stand on the sidelines and watch subscribers figure things out without their carriers coaching them along. If you happen to drop by Metaswitch's booth, you'll know why I'm saying these things - otherwise, let's just punt this para and move on.
So, if you want to get into the details, go straight to the Accession website, and the easier-to-digest press release that ran this morning. There are lots of new acronyms in this tech-heavy announcement, but the standout for me is IMT - Immersive Multimedia Telephony. Ultimately, this is about delivering a mobile experience that is as close as possible to what we get on our PCs or video monitors in the conference room.
That's asking a lot, I know, but Metaswitch understands the pain points of carriers, and mobile operators have a distinct set of challenges. Mobility delivers so much more utility than most fixed environments, and wireless operators know they have to move on from simple voice to keep subscribers happy. End user expectations are so high now, and the smartphone explosion has put operators in perpetual catch-up mode to upgrade their networks and deliver the services that make these must-have devices so popular.
As such, Accession is all about enabling an IMT experience so carriers can stay relevant with their subscribers. At the end of the day, operators really just have two things that matter - a phone number to assign subscribers and their trust. That number can be incredibly valuable if you can wrap all these other services around it - much like designating your favorite website as your home page. Accession does this in many ways, and I'll just cite a few examples.
One is how their platform is RCS and IMS-based, meaning that the subscriber's phone number can seamlessly connect across various mobile networks, screens, and support the modes we're used to on the PC - messaging, IM, presence, video, etc. Nothing really new here, but Metaswitch is positioning this in a way that makes the phone number more valuable. They've had good success with Thrutu, which now has 28 options to make the in-call experience richer. This adds a lot of stickiness and value to what once was an ordinary phone call, and provides the caller with the aforementioned IMT experience.
Another way they do that is enabling the operator to centralize the storage of the subscriber's contacts. So, whenever you update your contacts, those changes are propagated to all your other devices associated with your mobile number. Now things get interesting with FMC-type handoffs from mobile device to desktop softphone - or even other mobile devices - smartphone to tablet. Related to that is what Metaswitch calls the "new twisted pair", the idea being to twin your mobile device with your softphone for any screen, anywhere communications - but with the mobile number being the driver.
These capabilities are really important, not just to play in the emerging world of LTE, but also to co-exist with the OTT interlopers who are siphoning away minutes and revenues like never before. Savvy operators need to find a way to partner with those who are really in demand with subscribers, but also to add their own value and participate in the new revenues that LTE will make possible. Again, this is where that phone number has value, since all the subscriber's data and history are attached to it. So long as operators use that data responsibly, trust will be retained. That's other key asset they have, and it makes all the difference for getting subscribers to adopt new services.
There is a lot more to consider there, but the main thing for operators is that Accession can provide all this now, without the need to invest in new/costly hardware. OTT is both a threat and opportunity, and Accession opens up new possibilities, not just for operators to keep their fingers in more revenue pies - both from subscribers and advertisers - but also in creating new business models built around private labelled offerings that could in fact be done in partnership with OTTs. With the right moves, mobile operators can get the best of both worlds here - theirs and what OTTs are getting - and on that front, Metaswitch has a good story to tell with Accession.
Monday, February 27, 2012
Obama sings the blues - really!
You wouldn't know it from my posts these days, but music and film are my big passions - too bad they don't pay the bills. I used to blog about music, art and culture, but not so much lately. If writing was all I did, I would probably have about 6 different blogs for each of these things, but let's get real...
Anyhow, blues is my soul food, and even the President gets the blues. I came across this clip on CBC Radio's excellent new set of web music channels. They get it in terms of how radio is evolving and they have great streaming content for just about every type of music. Love it.
Back to 'Bama. Being Black History Month, the White House (how's that for irony?)hosted a mega blues jam, with a who's who of rock/blues royalty. As the site explains, the full concert will be broadcast sometime soon as a PBS special - can't wait for that.
Anyhow, Chicago is Obama's adopted hometown, and as this clip shows, Buddy Guy is running this show, and gets Obama to take the mike and sing a few bars of everybody's fave blues sing-along, Sweet Home Chicago. It's the most over-done song in blues lore, but it's the go-to song when you need to send the crowd home happy, and it's just so fun to sing.
My gut tells me this should be his re-election campaign commercial. If it worked for Clinton playing sax, it just might work here. If the blues isn't the people's music and the Democrats aren't the party of the people, then times must have changed. Take it away, Barry....
Anyhow, blues is my soul food, and even the President gets the blues. I came across this clip on CBC Radio's excellent new set of web music channels. They get it in terms of how radio is evolving and they have great streaming content for just about every type of music. Love it.
Back to 'Bama. Being Black History Month, the White House (how's that for irony?)hosted a mega blues jam, with a who's who of rock/blues royalty. As the site explains, the full concert will be broadcast sometime soon as a PBS special - can't wait for that.
Anyhow, Chicago is Obama's adopted hometown, and as this clip shows, Buddy Guy is running this show, and gets Obama to take the mike and sing a few bars of everybody's fave blues sing-along, Sweet Home Chicago. It's the most over-done song in blues lore, but it's the go-to song when you need to send the crowd home happy, and it's just so fun to sing.
My gut tells me this should be his re-election campaign commercial. If it worked for Clinton playing sax, it just might work here. If the blues isn't the people's music and the Democrats aren't the party of the people, then times must have changed. Take it away, Barry....
Thursday, February 23, 2012
Cisco, Microsoft, Skype and Video Interop - Who's Winning?
We all know how high the stakes are getting with video, and Cisco's recent call-out to Microsoft for its plans with Skype and their proprietary applications has made this a hot topic. I would argue that MSFT has the potential to get the upper hand here, and if they find a way to integrate Skype with its business offerings - namely Lync - the desktop gains a big boost in becoming the locus for video. That's not what Cisco wants to see happen, so we've got a pretty important tete-a-tete shaping up here.
This is the topic we explored on this week's UCStrategies podcast, moderated by Dave Michels, who always has interesting things to say. It was a lively session, and is running on the site now - both in podcast form and with transcript.
This is the topic we explored on this week's UCStrategies podcast, moderated by Dave Michels, who always has interesting things to say. It was a lively session, and is running on the site now - both in podcast form and with transcript.
Tuesday, February 21, 2012
ShoreTel and M5 Networks - Big Bet, Big Payoff
Remember Sylantro? GoBeam? There's DNA from these long-gone companies at ShoreTel, but I think it had a lot to do with their recent move to acquire M5 Networks. If you need a primer or a refresh on the details, you can start with our podcast last week on UCStrategies and go from there. I'm not here to rehash the news, but I do want to give you my take on the deal and what I think it means for the spaces these two companies play in.
Last week I had a chance to speak with executives from both companies, and that helped me piece together the rest of the story, which I think speaks to where things are going and how you have to respond in this fast-moving business. First and foremost, kudos to ShoreTel for thinking big and thinking out of the box. I'm pretty sure they realized that organic growth and incremental moves won't cut it to stay competitive. They need to make a bigger move - and a bolder move.
Given that ShoreTel's relatively new CEO, Peter Blackmore, was ex-HP - translation, hardware - one might think they would continue on that path and try to keep growing with premise-based solutions and channel programs. Fair enough, but I'd say ShoreTel's management also knows that the upside for premise is limited and margins are getting tighter. The company may be posting solid growth, but the profits aren't there, and investors won't stick with that formula long-term. So, how best to invest and build for the right kind of growth?
As we know, cloud is the big trend, and they're betting this will be the right answer. This is where GoBeam and Sylantro come in. Both companies were pioneers in the early days of hosted/managed telephony, with the former having gone to Covad/MegaPath, and the latter folded into BroadSoft. These may not have been the most lucrative exits, but it's real nice to have that kind of experience in a company like ShoreTel.
That's where M5 enters the picture. Their roots go back to the early days of those companies, and here they are 10 years later, with over 2,000 customers. To keep things simple, what we used to call hosted/managed, is now called cloud, and I'd argue no provider understands how to make money in this business better than M5. When you look at it that way, the deal is a no-brainer and makes perfect sense.
From a business and investor point of view, the main difference between the two companies is their business models. ShoreTel's core business is premise-based phone systems - in short, a capital expense where the revenues largely come upfront. M5 is selling a service - cloud-based VoIP, where the hardware is a nominal component. This is really an annuity business that delivers recurring, predictable revenue - cashflow to fund R&D, customer support and customer acquisition. Long term, M5 has a more profitable and sustainable model, and it's a great way build both the top and bottom lines for ShoreTel.
Without a doubt, the key to this equation is customer retention, and having had a long history with M5, I can say that churn is not their problem. Customer turnover data is pretty hard to come by in this space, but I'm pretty sure M5's churn is lower than their competitors. That's another important factor to note - this is a very fragmented and regionalized business, and while M5 is a fairly small company (about 200 employees), they're probably the biggest fish in the small pond of hosted/cloud-based VoIP providers.
At first glance, you have to wonder what is a telco vendor doing buying a hosted player? It's not that long ago these were very separate businesses, but they're chasing the same customers with a lot of common technology. Remember the early days of VoIP when it seemed like a radical idea to get your home phone service from a cableco? Doesn't seem strange today, and it won't be long until the telcos concede that whole market - gladly, btw - to the MSOs. If you don't think the same thing is going to happen with business VoIP - especially among SMBs, then you're not following me closely enough (or hiring me to re-think your strategy!).
So what are both companies getting here? Well, ShoreTel buys its way into a new market with lots of upside, and gets to shake up the landscape a bit. As with a lot of tech spaces, this was a textbook make vs. buy decision, and it's just way too late in the game for ShoreTel to replicate M5 - just doesn't make sense. So, if you're entering that market, go buy the biggest and smartest player. Done. It's a bit like free agency and baseball - sometimes you have to spend big to get the best, but if you lock them in long-term, you recoup your costs via better attendance and TV revenues.
Not only that, but ShoreTel has to look both ways in their market. For the domestic market, they only lag Cisco and Avaya, and Mitel is relatively close. Below them are all kinds of players - some are big companies with small shares, and others are just too small to worry about. ShoreTel will never catch Cisco, but Avaya has question marks - even post-Skype, and neither has what M5 brings to the table. Interesting, huh? As a sidenote, M5 also gives ShoreTel a nice boost in terms of market reach, as their presence is stronger on the West coast, whereas M5 is strongest in the Northeast.
M5 gets a great exit, and it's a great validation for cloud in this space. I've been assured that their homegrown switching platform can scale to the heights ShoreTel is dreaming of, and if there is any concern, it's keeping the culture strong. M5 is renowned for being customer-centric and being a small company themselves, they understand what SMBs need. This is a pretty special quality, and if they can scale that as the business folds into ShoreTel, they should be fine. I hope Mr. Blackmore leaves them alone!
Perhaps best of all is the fact that M5 exited to a vendor - and not a service provider. If you're an SMB, this is a huge sigh of relief, as M5 could just as easily sold out for even bigger bucks to an incumbent, but that would really be selling out. Just like ShoreTel is seen as a friendly alternative to the almighty Cisco, M5 is the great white hope for SMBs who otherwise would be hostage to their incumbent telcos. You don't think that has something to do with keeping churn low?
So, kudos to ShoreTel for taking the road less travelled. It's a risk, but now they can offer customers the best of both worlds. A lot of their customers are happy with premise-based systems - they're not ready for the cloud or they don't even trust it. Same for their channels. However, they know where the market is going, and can now offer cloud when these customers are ready, which of course keeps them in-house long term.
Of course, this isn't the only path available. Just look at Alteva - another leading hosted provider I've followed for a while - and their move to Warwick Valley Telecom. Nothing wrong with that move, but the deal was much smaller, and I think the upside will be too - unless Warwick ramps up by acquiring other telcos, but that's pretty hard to do.
That brings me back to thinking bigger and bolder. I think you need to do both, certainly for what ShoreTel's current station in the market is. The deal is financially manageable for ShoreTel, and they get the benefit of immediate cashflow. Given what Alteva sold for, I really don't see many players out there who could get what M5 got. In that regard, ShoreTel has acquired a nice cache of customers, so they hit the ground running. For another vendor to counter with a me-too deal, they'll likely end up with a much smaller player - and probably overpay - which means needing to invest another whack of money to expand the customer base and make the move worthwhile. This may be an early stage market still, but that seems like a much riskier move to me. No thanks.
What's next? Well, we'll all be watching to see if this is a one-off, or if other vendors try the same thing. I also wonder how the platform vendors - namely BroadSoft and Metaswitch - will respond. This is an adjacent space, but they're all after the same customers at the end of the day. There could be a domino effect - or maybe not. Either way, I like the move - it's great for M5, and it shows savvy from ShoreTel to get to the next level. If the cloud trend holds up, they'll be a big winner, and register much higher on Avaya and Cisco's radar. Gotta like that.
Last week I had a chance to speak with executives from both companies, and that helped me piece together the rest of the story, which I think speaks to where things are going and how you have to respond in this fast-moving business. First and foremost, kudos to ShoreTel for thinking big and thinking out of the box. I'm pretty sure they realized that organic growth and incremental moves won't cut it to stay competitive. They need to make a bigger move - and a bolder move.
Given that ShoreTel's relatively new CEO, Peter Blackmore, was ex-HP - translation, hardware - one might think they would continue on that path and try to keep growing with premise-based solutions and channel programs. Fair enough, but I'd say ShoreTel's management also knows that the upside for premise is limited and margins are getting tighter. The company may be posting solid growth, but the profits aren't there, and investors won't stick with that formula long-term. So, how best to invest and build for the right kind of growth?
As we know, cloud is the big trend, and they're betting this will be the right answer. This is where GoBeam and Sylantro come in. Both companies were pioneers in the early days of hosted/managed telephony, with the former having gone to Covad/MegaPath, and the latter folded into BroadSoft. These may not have been the most lucrative exits, but it's real nice to have that kind of experience in a company like ShoreTel.
That's where M5 enters the picture. Their roots go back to the early days of those companies, and here they are 10 years later, with over 2,000 customers. To keep things simple, what we used to call hosted/managed, is now called cloud, and I'd argue no provider understands how to make money in this business better than M5. When you look at it that way, the deal is a no-brainer and makes perfect sense.
From a business and investor point of view, the main difference between the two companies is their business models. ShoreTel's core business is premise-based phone systems - in short, a capital expense where the revenues largely come upfront. M5 is selling a service - cloud-based VoIP, where the hardware is a nominal component. This is really an annuity business that delivers recurring, predictable revenue - cashflow to fund R&D, customer support and customer acquisition. Long term, M5 has a more profitable and sustainable model, and it's a great way build both the top and bottom lines for ShoreTel.
Without a doubt, the key to this equation is customer retention, and having had a long history with M5, I can say that churn is not their problem. Customer turnover data is pretty hard to come by in this space, but I'm pretty sure M5's churn is lower than their competitors. That's another important factor to note - this is a very fragmented and regionalized business, and while M5 is a fairly small company (about 200 employees), they're probably the biggest fish in the small pond of hosted/cloud-based VoIP providers.
At first glance, you have to wonder what is a telco vendor doing buying a hosted player? It's not that long ago these were very separate businesses, but they're chasing the same customers with a lot of common technology. Remember the early days of VoIP when it seemed like a radical idea to get your home phone service from a cableco? Doesn't seem strange today, and it won't be long until the telcos concede that whole market - gladly, btw - to the MSOs. If you don't think the same thing is going to happen with business VoIP - especially among SMBs, then you're not following me closely enough (or hiring me to re-think your strategy!).
So what are both companies getting here? Well, ShoreTel buys its way into a new market with lots of upside, and gets to shake up the landscape a bit. As with a lot of tech spaces, this was a textbook make vs. buy decision, and it's just way too late in the game for ShoreTel to replicate M5 - just doesn't make sense. So, if you're entering that market, go buy the biggest and smartest player. Done. It's a bit like free agency and baseball - sometimes you have to spend big to get the best, but if you lock them in long-term, you recoup your costs via better attendance and TV revenues.
Not only that, but ShoreTel has to look both ways in their market. For the domestic market, they only lag Cisco and Avaya, and Mitel is relatively close. Below them are all kinds of players - some are big companies with small shares, and others are just too small to worry about. ShoreTel will never catch Cisco, but Avaya has question marks - even post-Skype, and neither has what M5 brings to the table. Interesting, huh? As a sidenote, M5 also gives ShoreTel a nice boost in terms of market reach, as their presence is stronger on the West coast, whereas M5 is strongest in the Northeast.
M5 gets a great exit, and it's a great validation for cloud in this space. I've been assured that their homegrown switching platform can scale to the heights ShoreTel is dreaming of, and if there is any concern, it's keeping the culture strong. M5 is renowned for being customer-centric and being a small company themselves, they understand what SMBs need. This is a pretty special quality, and if they can scale that as the business folds into ShoreTel, they should be fine. I hope Mr. Blackmore leaves them alone!
Perhaps best of all is the fact that M5 exited to a vendor - and not a service provider. If you're an SMB, this is a huge sigh of relief, as M5 could just as easily sold out for even bigger bucks to an incumbent, but that would really be selling out. Just like ShoreTel is seen as a friendly alternative to the almighty Cisco, M5 is the great white hope for SMBs who otherwise would be hostage to their incumbent telcos. You don't think that has something to do with keeping churn low?
So, kudos to ShoreTel for taking the road less travelled. It's a risk, but now they can offer customers the best of both worlds. A lot of their customers are happy with premise-based systems - they're not ready for the cloud or they don't even trust it. Same for their channels. However, they know where the market is going, and can now offer cloud when these customers are ready, which of course keeps them in-house long term.
Of course, this isn't the only path available. Just look at Alteva - another leading hosted provider I've followed for a while - and their move to Warwick Valley Telecom. Nothing wrong with that move, but the deal was much smaller, and I think the upside will be too - unless Warwick ramps up by acquiring other telcos, but that's pretty hard to do.
That brings me back to thinking bigger and bolder. I think you need to do both, certainly for what ShoreTel's current station in the market is. The deal is financially manageable for ShoreTel, and they get the benefit of immediate cashflow. Given what Alteva sold for, I really don't see many players out there who could get what M5 got. In that regard, ShoreTel has acquired a nice cache of customers, so they hit the ground running. For another vendor to counter with a me-too deal, they'll likely end up with a much smaller player - and probably overpay - which means needing to invest another whack of money to expand the customer base and make the move worthwhile. This may be an early stage market still, but that seems like a much riskier move to me. No thanks.
What's next? Well, we'll all be watching to see if this is a one-off, or if other vendors try the same thing. I also wonder how the platform vendors - namely BroadSoft and Metaswitch - will respond. This is an adjacent space, but they're all after the same customers at the end of the day. There could be a domino effect - or maybe not. Either way, I like the move - it's great for M5, and it shows savvy from ShoreTel to get to the next level. If the cloud trend holds up, they'll be a big winner, and register much higher on Avaya and Cisco's radar. Gotta like that.
Thursday, February 16, 2012
Hosted...cloud - what's the diff? ShoreTel/M5 - a sign of what's to come?
On this week's UCStrategies podcast, we tried tackling these two big questions at the same time. The initial idea was to put our heads together and try to parse through the differences/confusion between hosted and cloud-based services - and from that, talk about where the opportunities lie, as well as the implications for channels.
This is a big enough topic on its own, and the idea was to touch on the recent acquisition of M5 Networks by ShoreTel as a jumping off point for what's happening in this space. I'm closer to this story than most of my colleagues at UCStrategies, and we ended up starting the podcast here. I wasn't planning on kicking off the discussion, but that's what happened, and everyone chimed in from there.
We did our best to tie these two topics together, but there's a lot more to explore on both fronts. The hosted/cloud thing will continue having a life of its own, so keep checking back at UCS for more discussion and analysis.
Regarding M5/ShoreTel, I've been speaking to execs on both sides of the deal, and will have a more focused assessment coming here on my blog in the next few days. Stay tuned - never a dull moment around here!
So, your next stop should be the UCS portal, where the podcast and transcript has now been posted. Kudos to Blair Pleasant for running the podcast and making sure everyone got their two cents in.
This is a big enough topic on its own, and the idea was to touch on the recent acquisition of M5 Networks by ShoreTel as a jumping off point for what's happening in this space. I'm closer to this story than most of my colleagues at UCStrategies, and we ended up starting the podcast here. I wasn't planning on kicking off the discussion, but that's what happened, and everyone chimed in from there.
We did our best to tie these two topics together, but there's a lot more to explore on both fronts. The hosted/cloud thing will continue having a life of its own, so keep checking back at UCS for more discussion and analysis.
Regarding M5/ShoreTel, I've been speaking to execs on both sides of the deal, and will have a more focused assessment coming here on my blog in the next few days. Stay tuned - never a dull moment around here!
So, your next stop should be the UCS portal, where the podcast and transcript has now been posted. Kudos to Blair Pleasant for running the podcast and making sure everyone got their two cents in.
Wednesday, February 15, 2012
Is UC Losing Relevance?
This question kept popping into my mind over the past couple of weeks, during which I was involved in four telecom events. Don't get me wrong - I'm a big fan of Unified Communications, and write about it regularly in a few places. However, my basic takeway is that UC isn't keeping pace with how quickly things like BYOD and social media are seeping into our lives - and the workplace.
There's a lot invested in UC, and I'm getting a sense there's a gap growing between what vendors are bringing to market, and what end users and IT is being drawn to. It's a confusing mix for sure, and hopefully I can stir the pot a bit here and get some productive dialog going.
So, to read all about it, "Is UC Losing Relvance?" is running now on the UCStrategies portal. See you there!
There's a lot invested in UC, and I'm getting a sense there's a gap growing between what vendors are bringing to market, and what end users and IT is being drawn to. It's a confusing mix for sure, and hopefully I can stir the pot a bit here and get some productive dialog going.
So, to read all about it, "Is UC Losing Relvance?" is running now on the UCStrategies portal. See you there!
Tuesday, February 14, 2012
Ooma Revisited - Now in Canada, and in HD!
If you’re new to my blog or the VoIP space, you may not know Ooma. On the other hand, if you go back far enough with me, hopefully you’ll recall I was one of the first to trial Ooma as well as write about them. The VoIP space has evolved since then, and while my early posts were not optimistic about Ooma’s prospects, that view was balanced by their strengths, which I believe have served them well to survive into the present.
Two things in particular stood out for me, especially compared with OTT services. First is voice quality, which I feel has always been better than any other VoIP service I’ve used; with Vonage, Primus and Skype being my primary reference points. Second is how they’ve packaged the offering – notice that I didn’t call it a product or a service. That’s where I think they’ve done a good job – they’ve managed to productize VoIP by tying it to an end device you buy in a store.
Ooma is unique that way, and their slick packaging and product design really does make you think of Apple. That’s definitely a plus in my books – not just because it makes you feel good about dishing out the cash up front to buy Ooma, but also because you’ll be more likely to recommend this cool-looking/cool-sounding thing called Ooma to friends/family, which is a pretty important driver for their growth.
Being an early adopter, I could go on about the product-based elements of Ooma, but this post is tied to more current events that I think need some amplification. First is the fact that Ooma is now offered in Canada. When I was invited to trial Ooma, the service was strictly U.S.-based, and being in Toronto, they could only assign me a DID with a U.S. area code. Last November, their Canadian service was launched, so in addition to my initial Ooma number, I now have a second number with a Toronto-based area code. Due to my long and unique relationship with Ooma, I’m pretty sure I’m the only Ooma user in Canada to have this setup with two inbound DIDs.
I haven’t posted about this until now for a few reasons. Aside from being busy with projects and conferences, I didn’t actually get my Canadian Ooma number until recently; plus, I wanted to spend some time using the service with both numbers. On that front, I can say that the call quality has remained great, and now they tout Ooma’s “HD-quality”. That moniker didn’t exist a few years ago, and I’m glad to see them using it as a differentiator. I say that for two reasons.
First, consumers need to understand that VoIP can actually be better than TDM, and at minimum, they must perceive that quality will not be compromised when switching. Today, this actually applies to two scenarios. The main one is switching from their incumbent where they’re going from TDM to VoIP, but there is also another market opportunity in play here – VoIP subscribers from other services. I find the latter a more interesting scenario since there are so many options available. Most are OTT, and being run over the public Internet, quality can be highly variable. In my experience, Ooma doesn’t have this problem (you should read up on their peer-to-peer architecture on their website as a starting point to understand why), but there’s another factor to consider as well.
Most VoIP services have no contracts, so switching costs are basically nil. This plays nicely into Ooma’s value proposition, whereby your only cost is the roughly $230 upfront layout for the Telo box. You can add some higher-end features, but the basic service is free from that point on, so knocking out the $30+ monthly cost of an OTT VoIP service should be a no-brainer.
The second factor that makes HD attractive is the comparative quality against mobile calling. You may rightly ask "who the hell uses a landline these days, dude?", but bear with me. I know people like this have very short attention spans, but put your so-called smartphone down for a sec and read on - you might actually learn something.
When Ooma first came out, mobile wasn’t as entrenched, but today, it’s really killing all forms of landline telephony. Fair enough – even I concede that mobile will eventually rule – but there are still tons of landlines out there, and in the overall scheme of things, Ooma is still a pretty good deal to have as your backup service at home. It’s more economical than TDM, and with HD, the calling experience is way better than any mobile service or on any "smart" phone. For people who routinely use their mobile phones at home – I have never understood the logic there – I’m sure they would revert to landline once they experience how good Ooma sounds in comparison.
My main message here is to get the word out that Ooma is now available in Canada. The service has been available since November – and yes, it has 911 – with distribution where you’d expect to find it – namely Best Buy, Future Shop, Canada Computers, London Drugs, select Costco locations, and Amazon.ca. As their website shows, some of these channels are in-store only, some online only, and for Costco, both options exist.
VoIP has gained more traction in the U.S., namely because there are more offerings, and of course, Vonage created awareness with its mass market advertising. We got a little of that in Canada, but not much, plus the incumbents have had a pretty good hold on the market. That’s been changing, though, as cablecos have made big inroads with VoIP, and with the recent addition of new wireless players, mobile adoption has been growing – but still lags the U.S. As such, there’s still good upside here for VoIP, and while Ooma has a distinct offering, I believe there’s an appreciable segment of the market that will see value here.
There’s one more thing to add to strengthen this story. More recently – at CES last month – they announced their HD2 cordless handset. I think call quality is the killer app for Ooma, and to maximize this opportunity, you need the right handset. Existing analog or digital home phones will work just fine, but you’ll need HD2 to get the true HD experience. Just like watching HD TV for the first time, once you experience this, it’s hard to go back. Of course, this also gives Ooma another product to sell and adds to their top line revenues, but it makes the service stickier. A top quality audio experience is the best way to keep Ooma customers, especially those who live on their wireless phones.
Not only that, but HD2 takes VoIP beyond free phone calls. The phones have a 2” color screen, which shows photo caller ID. Now the experience starts to feel more like a mobile call, plus there’s a social media tie-in by supporting Facebook profile pictures as well as displaying contact lists from IM platforms like Google and Yahoo. That’s pretty key, since happy Ooma users can now use word-of-mouth virally. I’ll take that path any day over expensive TV advertising to acquire customers as cheaply as possible.
Before you get too excited about this, though, we are in Canada after all. HD2 will be available in the U.S. next month, but won’t likely be in Canada until the spring. Just be a little patient, folks, but your time will come too in the Great White North. Hopefully, the takeup will be good, and I’ll revisit Ooma once there’s time to gauge their success. Until then, drop me a note if you’d like to call either of my Ooma numbers and experience it first-hand. I’ll be happy to oblige!
Two things in particular stood out for me, especially compared with OTT services. First is voice quality, which I feel has always been better than any other VoIP service I’ve used; with Vonage, Primus and Skype being my primary reference points. Second is how they’ve packaged the offering – notice that I didn’t call it a product or a service. That’s where I think they’ve done a good job – they’ve managed to productize VoIP by tying it to an end device you buy in a store.
Ooma is unique that way, and their slick packaging and product design really does make you think of Apple. That’s definitely a plus in my books – not just because it makes you feel good about dishing out the cash up front to buy Ooma, but also because you’ll be more likely to recommend this cool-looking/cool-sounding thing called Ooma to friends/family, which is a pretty important driver for their growth.
Being an early adopter, I could go on about the product-based elements of Ooma, but this post is tied to more current events that I think need some amplification. First is the fact that Ooma is now offered in Canada. When I was invited to trial Ooma, the service was strictly U.S.-based, and being in Toronto, they could only assign me a DID with a U.S. area code. Last November, their Canadian service was launched, so in addition to my initial Ooma number, I now have a second number with a Toronto-based area code. Due to my long and unique relationship with Ooma, I’m pretty sure I’m the only Ooma user in Canada to have this setup with two inbound DIDs.
I haven’t posted about this until now for a few reasons. Aside from being busy with projects and conferences, I didn’t actually get my Canadian Ooma number until recently; plus, I wanted to spend some time using the service with both numbers. On that front, I can say that the call quality has remained great, and now they tout Ooma’s “HD-quality”. That moniker didn’t exist a few years ago, and I’m glad to see them using it as a differentiator. I say that for two reasons.
First, consumers need to understand that VoIP can actually be better than TDM, and at minimum, they must perceive that quality will not be compromised when switching. Today, this actually applies to two scenarios. The main one is switching from their incumbent where they’re going from TDM to VoIP, but there is also another market opportunity in play here – VoIP subscribers from other services. I find the latter a more interesting scenario since there are so many options available. Most are OTT, and being run over the public Internet, quality can be highly variable. In my experience, Ooma doesn’t have this problem (you should read up on their peer-to-peer architecture on their website as a starting point to understand why), but there’s another factor to consider as well.
Most VoIP services have no contracts, so switching costs are basically nil. This plays nicely into Ooma’s value proposition, whereby your only cost is the roughly $230 upfront layout for the Telo box. You can add some higher-end features, but the basic service is free from that point on, so knocking out the $30+ monthly cost of an OTT VoIP service should be a no-brainer.
The second factor that makes HD attractive is the comparative quality against mobile calling. You may rightly ask "who the hell uses a landline these days, dude?", but bear with me. I know people like this have very short attention spans, but put your so-called smartphone down for a sec and read on - you might actually learn something.
When Ooma first came out, mobile wasn’t as entrenched, but today, it’s really killing all forms of landline telephony. Fair enough – even I concede that mobile will eventually rule – but there are still tons of landlines out there, and in the overall scheme of things, Ooma is still a pretty good deal to have as your backup service at home. It’s more economical than TDM, and with HD, the calling experience is way better than any mobile service or on any "smart" phone. For people who routinely use their mobile phones at home – I have never understood the logic there – I’m sure they would revert to landline once they experience how good Ooma sounds in comparison.
My main message here is to get the word out that Ooma is now available in Canada. The service has been available since November – and yes, it has 911 – with distribution where you’d expect to find it – namely Best Buy, Future Shop, Canada Computers, London Drugs, select Costco locations, and Amazon.ca. As their website shows, some of these channels are in-store only, some online only, and for Costco, both options exist.
VoIP has gained more traction in the U.S., namely because there are more offerings, and of course, Vonage created awareness with its mass market advertising. We got a little of that in Canada, but not much, plus the incumbents have had a pretty good hold on the market. That’s been changing, though, as cablecos have made big inroads with VoIP, and with the recent addition of new wireless players, mobile adoption has been growing – but still lags the U.S. As such, there’s still good upside here for VoIP, and while Ooma has a distinct offering, I believe there’s an appreciable segment of the market that will see value here.
There’s one more thing to add to strengthen this story. More recently – at CES last month – they announced their HD2 cordless handset. I think call quality is the killer app for Ooma, and to maximize this opportunity, you need the right handset. Existing analog or digital home phones will work just fine, but you’ll need HD2 to get the true HD experience. Just like watching HD TV for the first time, once you experience this, it’s hard to go back. Of course, this also gives Ooma another product to sell and adds to their top line revenues, but it makes the service stickier. A top quality audio experience is the best way to keep Ooma customers, especially those who live on their wireless phones.
Not only that, but HD2 takes VoIP beyond free phone calls. The phones have a 2” color screen, which shows photo caller ID. Now the experience starts to feel more like a mobile call, plus there’s a social media tie-in by supporting Facebook profile pictures as well as displaying contact lists from IM platforms like Google and Yahoo. That’s pretty key, since happy Ooma users can now use word-of-mouth virally. I’ll take that path any day over expensive TV advertising to acquire customers as cheaply as possible.
Before you get too excited about this, though, we are in Canada after all. HD2 will be available in the U.S. next month, but won’t likely be in Canada until the spring. Just be a little patient, folks, but your time will come too in the Great White North. Hopefully, the takeup will be good, and I’ll revisit Ooma once there’s time to gauge their success. Until then, drop me a note if you’d like to call either of my Ooma numbers and experience it first-hand. I’ll be happy to oblige!
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