After my earlier post went up about today's Vonage/Verizon news, I got a note from Moshe Maeir, who has been cited here a fair bit recently.
He's wearing all the hats these days getting his startup Flat Planet Phone Company off the ground. Well, today's news could turn out to be his lucky break. He's coming to market at an interesting time, and he points out in this afternoon's blog post that the Verizon win today could really hurt innovation for VoIP. I couldn't agree more, and I think that's a genuine concern right now for anybody who wants to see this space thrive.
Have a look - he's basically saying that his company's platform can allow anyone to be a phone company - of sorts - for only $199. It's a pretty interesting proposition, and opens up very wide possibilities for innovative services. Maybe not landline replacement, but enough variations to keep this market moving forward - despite what appears to be Verizon's best efforts to the contrary.
Verizon may win the battle today - although that still remains to be seen - and to be fair, there may well be a legitimate basis to their charges (and if so, justice has been served)- but I don't think they'll win the war. Vonage or no Vonage, the VoIP genie is out of the bottle, and someone, someway is going to make this work.
Technorati tags: Vonage, Jon Arnold, Verizon, VoIP, Flat Planet Phone Company
Thursday, March 8, 2007
Verizon Gets Its Way With Vonage - Another Boston Tea Party Coming?
Well, news travels fast. I've had a bunch of people email and IM me about the Verizon/Vonage case. Looks like things have gone Verizon's way, although I think it could have been a lot worse.
Details are limited so far, and a few bloggers have posted already, pretty much all referencing the same source from the Washington Post.
I don't have anything better to add yet, so at least you can read this for now. I'm sure there will be loads more analysis to come later today and tomorrow.
All I can say is that I thought Vonage might have caught a break in this one. I'm just thinking that the AT&T/Bell South merger went through with relatively few concessions, and that the sentiment today would favor a ruling going in favor of the competition. I guess not. So, we have another case of the incumbents getting their way, and obviously, this case can hurt Vonage a lot more than Verizon.
So far, though, it looks like the pain is manageable - $58 million settlement, and a 5.5% royalty on future sales. Vonage certainly has the cash on hand, but gee, this is another hit on their margins - 10% in fact, and that's quite a bit. Why 10%? Well, their gross margins are around 55%-60%, so 5.5% is 10% of that. Call it the Verizon tax if you like, but it worries me. Is this royalty in perpetuity, or does it have a limited life?
If it's the former, I see parallels to the Boston Tea Party here. Verizon gets its way by giving Vonage enough rope to live, and to continue profiting from VoIP while Vonage and their shareholders struggle to hang on. Plus, they may even make money some day from VoiceWing, their own VoIP offering - but that's another story.
If I'm Vonage, that's not a tax I'd want to live with the rest of my days, especially if they can somehow find light at the end of the tunnel. If that day comes, maybe they'll stage a Boston Tea Party of their own to protest this onerous and unfair tax.
Of course, it's debatable whether the "tax" is fair. Verizon seems to think so, but does the punishment fit the crime? And can Vonage somehow come up with a workaround to stop using the patents in question, and hence free themselves of this royalty scheme? And in the context of my Boston Tea Party theme, the word "royalty" is rather appropos here.
And then there's the bigger question of the rest of the industry. If they can go after Vonage for this, can they not go after the other VoBB operators like SunRocket? It's not clear to me if Vonage is the only one Verizon thinks they can apply this position to. In that scenario, they would really be a threat to the competitive landscape, which is an even bigger concern.
Finally, I can't help but wonder about the bigger picture. The cablecos are causing Verizon far more pain than Vonage, and they're a much bigger threat. That's where I'd be spending my time and money. And if Verizon really has all these great VoIP patents, why are they the smallest player in the market among Tier 1 carriers?
Many questions here - more to come for sure...
Technorati tags: Vonage, Jon Arnold, Verizon, VoIP
Details are limited so far, and a few bloggers have posted already, pretty much all referencing the same source from the Washington Post.
I don't have anything better to add yet, so at least you can read this for now. I'm sure there will be loads more analysis to come later today and tomorrow.
All I can say is that I thought Vonage might have caught a break in this one. I'm just thinking that the AT&T/Bell South merger went through with relatively few concessions, and that the sentiment today would favor a ruling going in favor of the competition. I guess not. So, we have another case of the incumbents getting their way, and obviously, this case can hurt Vonage a lot more than Verizon.
So far, though, it looks like the pain is manageable - $58 million settlement, and a 5.5% royalty on future sales. Vonage certainly has the cash on hand, but gee, this is another hit on their margins - 10% in fact, and that's quite a bit. Why 10%? Well, their gross margins are around 55%-60%, so 5.5% is 10% of that. Call it the Verizon tax if you like, but it worries me. Is this royalty in perpetuity, or does it have a limited life?
If it's the former, I see parallels to the Boston Tea Party here. Verizon gets its way by giving Vonage enough rope to live, and to continue profiting from VoIP while Vonage and their shareholders struggle to hang on. Plus, they may even make money some day from VoiceWing, their own VoIP offering - but that's another story.
If I'm Vonage, that's not a tax I'd want to live with the rest of my days, especially if they can somehow find light at the end of the tunnel. If that day comes, maybe they'll stage a Boston Tea Party of their own to protest this onerous and unfair tax.
Of course, it's debatable whether the "tax" is fair. Verizon seems to think so, but does the punishment fit the crime? And can Vonage somehow come up with a workaround to stop using the patents in question, and hence free themselves of this royalty scheme? And in the context of my Boston Tea Party theme, the word "royalty" is rather appropos here.
And then there's the bigger question of the rest of the industry. If they can go after Vonage for this, can they not go after the other VoBB operators like SunRocket? It's not clear to me if Vonage is the only one Verizon thinks they can apply this position to. In that scenario, they would really be a threat to the competitive landscape, which is an even bigger concern.
Finally, I can't help but wonder about the bigger picture. The cablecos are causing Verizon far more pain than Vonage, and they're a much bigger threat. That's where I'd be spending my time and money. And if Verizon really has all these great VoIP patents, why are they the smallest player in the market among Tier 1 carriers?
Many questions here - more to come for sure...
Technorati tags: Vonage, Jon Arnold, Verizon, VoIP
Wednesday, March 7, 2007
Blogdesk Meme - My Turn
Well, I'm not into the chain-letter thing, but this will be quick. Our man in Italy, Luca, started this on Saturday, and it's come to me via Moshe Maeir (the Flat Planet guy!). He's invited me, Thomas Howe and Garrett Smith to keep it going, and now I have to find a few bloggers to tag. Thomas has done his duty, and now I've done mine.
As you can see, it's just a desk. Not sure what you're expecting. I think the view from my window is more interesting! I'm not a gadget guy - otherwise I would have taken a more detailed photo with less contrast from the daylight to show them off. It's just what you see. As requested, my phone is a simple, 2 line classic Nortel handset. It's actually made by Aastra, who make these phones now - in Mexico, of all places. I use 2 VoIP lines - Vonage and Primus, and that's what the routers behind the phone support - plus the wireless signal for the notebooks everyone else around here uses.
Got a basic Toshiba Satellite notebook, and my old-school daytimer. That's about it. If you know me, you'll know that I also use the Nokia N93 for mobile. But frankly, I'm at my desk all day long, so the cell phone is really just used as a camera. And my RIM sits gathering dust by the filing cabinet until I need it, which is only when I travel to go to conferences.
I wish it was more exciting, but 95% of my day is either email or writing, so my world is about my notebook more than anything else.
Now, who am I going to pass this meme along to???
Update - I've now tagged Marc Robins, Dan York and Jim Courtney. Let's see what comes back.
Technorati tags: Moshe Maeir, Jon Arnold, blogosphere
As you can see, it's just a desk. Not sure what you're expecting. I think the view from my window is more interesting! I'm not a gadget guy - otherwise I would have taken a more detailed photo with less contrast from the daylight to show them off. It's just what you see. As requested, my phone is a simple, 2 line classic Nortel handset. It's actually made by Aastra, who make these phones now - in Mexico, of all places. I use 2 VoIP lines - Vonage and Primus, and that's what the routers behind the phone support - plus the wireless signal for the notebooks everyone else around here uses.
Got a basic Toshiba Satellite notebook, and my old-school daytimer. That's about it. If you know me, you'll know that I also use the Nokia N93 for mobile. But frankly, I'm at my desk all day long, so the cell phone is really just used as a camera. And my RIM sits gathering dust by the filing cabinet until I need it, which is only when I travel to go to conferences.
I wish it was more exciting, but 95% of my day is either email or writing, so my world is about my notebook more than anything else.
Now, who am I going to pass this meme along to???
Update - I've now tagged Marc Robins, Dan York and Jim Courtney. Let's see what comes back.
Technorati tags: Moshe Maeir, Jon Arnold, blogosphere
Tuesday, March 6, 2007
My Dinner with Thomas - Mr. Mashup
If you've been following my blog, I posted the other day about colleague Thomas Howe, and his impressive ETel win last week in the Telephony Mashup Contest. Whoo hoo!
Well, for all my supportive posts - and being the first blogger to share the good news - I said dinner was on him if he won. After all, he did change our plans to meet here in Toronto when he found out his entry had been accepted. So, he went, he won, he came here last night, and as you can see from the photo, we had dinner. Now everybody's happy. Thanks Thomas!
Being an Engineer, Thomas is more tech-centric than me, and he's already posted about our dinner - just thought I'd share that. Glad he did, coz now I don't have to get into how cold it was last night. Next time, Thomas, either wear a winter coat, or come up when the weather is nicer! :-)
I should just add that we talked about a lot of things, and I think you can expect to hear more interesting developments on the mashup front from Thomas soon. On that note, he's contributing an article on mashups for the newsletter I'm putting together with Marc Robins, which we hope to have ready very soon. We also plotted out what we think is the right strategy for a startup we're both keen on - Flat Planet Telephone Company. We'll keep that to ourselves just for now...
Nice to see some validation on Thomas's mashup - The After Hours Doctor's Office - on Russell Shaw's blog today. Same for Garrett Smith on his post yesterday, Andy Abramson too, and Ken Camp from last week. Others as well, but you get the idea.
Technorati tags: Thomas Howe, Jon Arnold, ETel, Web 2.0
Monday, March 5, 2007
Microsoft Canada's OneCare Launch
This afternoon I participated in a roundtable about Microsoft's recent launch in Canada of OneCare, their all-in-one PC security solution.
I've had a copy to use here on our PCs, and it's a pretty good product. I'm not doing a product review in this post, but in short, Microsoft brings a lot of good features and functionality in one product, and I think the overall value proposition will resonate well with both consumers and SOHOs.
I was there to speak about the overall trends related to PC security, and was joined by Sumeet Khanna and Bruce Cowper of Microsoft Canada, along with Gemma Moore, who is a SOHO user of OneCare. We provided various perspectives to the media, and this should help get broader coverage about OneCare's availability, and raise more awareness of the various issues around PC security. Lots to talk about here, but will have to save that for another post.
em>Technorati tags: Microsoft Canada, Jon Arnold, OneCare, PC Security
I've had a copy to use here on our PCs, and it's a pretty good product. I'm not doing a product review in this post, but in short, Microsoft brings a lot of good features and functionality in one product, and I think the overall value proposition will resonate well with both consumers and SOHOs.
I was there to speak about the overall trends related to PC security, and was joined by Sumeet Khanna and Bruce Cowper of Microsoft Canada, along with Gemma Moore, who is a SOHO user of OneCare. We provided various perspectives to the media, and this should help get broader coverage about OneCare's availability, and raise more awareness of the various issues around PC security. Lots to talk about here, but will have to save that for another post.
em>Technorati tags: Microsoft Canada, Jon Arnold, OneCare, PC Security
Thursday, March 1, 2007
WNP Making Canadian Wireless Market Interesting - Did Bell Make a Good Deal?
Wireless Number Portability - WNP - is a big deal in Canada right now, as it's been a long time coming, and is just around the corner now. We have 3 major wireless carriers here, and they're all gearing up for this since they're all going to be making frenzied pitches to steal landline subscribers away from each other. Bell certainly has the most to lose here since they have the largest base of wireline subscribers.
Not surprisingly, late yesterday, Bell announced a new plan for unlimited local calling between all Bell wireline and wireless numbers. They have special "Bell to Bell" plans for new subscribers, and existing subscribers can add this service "for as little as $10 a month".
While this sounds like a good plan, it comes at a cost. So it's an interesting twist where the subscriber is actually paying more money to stay with Bell. Of course, they're getting the benefit of free Bell-to-Bell calling, and if it works, Bell wins at both ends. They get higher ARPU - something impatient shareholders are dying to see - and they keep their customers from running to Rogers or Telus or... ummm... oh - possibly Virgin or Amp'd. We don't really have many choices in the first place, and that's what makes WNP so interesting.
Wireless competition in Canada is another topic unto itself, and I'm just trying to draw attention to how the major mobile operators are responding to changing market conditions.
So, back to my question - is this a good plan for Bell subscribers? As Howie would say, "let's open the last case and see just how good a deal you really made". Well, a few days ago, Rogers came out with their WNP salvo - My Home Connections. Guess what - it includes domestic long distance calling between Rogers wireline/wireless subscribers - and there's no charge. Gee, I think I know what Howie would say. Stacey, open the case...
Quick sidebar - interestingly, no news from Telus on this front. Of course they jumped the gun offering adult content to differentiate themselves, but that's not happening now, and perhaps they're taking a more cautious approach this time around. Good idea.
Fellow Canadian bloggers Mark Evans and Mark Goldberg have been posting about this as well if you want further reading. The latter post is particularly worthwhile as Mark raises some important questions about the government's role in promoting competition where we basically have a oligopoly.
Technorati tags: Bell Mobility, Jon Arnold, Rogers Wireless, Wireless Number Portability
Not surprisingly, late yesterday, Bell announced a new plan for unlimited local calling between all Bell wireline and wireless numbers. They have special "Bell to Bell" plans for new subscribers, and existing subscribers can add this service "for as little as $10 a month".
While this sounds like a good plan, it comes at a cost. So it's an interesting twist where the subscriber is actually paying more money to stay with Bell. Of course, they're getting the benefit of free Bell-to-Bell calling, and if it works, Bell wins at both ends. They get higher ARPU - something impatient shareholders are dying to see - and they keep their customers from running to Rogers or Telus or... ummm... oh - possibly Virgin or Amp'd. We don't really have many choices in the first place, and that's what makes WNP so interesting.
Wireless competition in Canada is another topic unto itself, and I'm just trying to draw attention to how the major mobile operators are responding to changing market conditions.
So, back to my question - is this a good plan for Bell subscribers? As Howie would say, "let's open the last case and see just how good a deal you really made". Well, a few days ago, Rogers came out with their WNP salvo - My Home Connections. Guess what - it includes domestic long distance calling between Rogers wireline/wireless subscribers - and there's no charge. Gee, I think I know what Howie would say. Stacey, open the case...
Quick sidebar - interestingly, no news from Telus on this front. Of course they jumped the gun offering adult content to differentiate themselves, but that's not happening now, and perhaps they're taking a more cautious approach this time around. Good idea.
Fellow Canadian bloggers Mark Evans and Mark Goldberg have been posting about this as well if you want further reading. The latter post is particularly worthwhile as Mark raises some important questions about the government's role in promoting competition where we basically have a oligopoly.
Technorati tags: Bell Mobility, Jon Arnold, Rogers Wireless, Wireless Number Portability
Canadian IP Thought Leaders Series - Claude Galipeau - BlogTV Canada
For anyone interested in disruptive broadcasting and social media, I think you'll find this week's podcast worth listening to.
I spoke with Claude Galipeau; he's the SVP of Digital Media for Toronto-based Alliance Atlantis Communications. The company is one of Canada's largest and most progressive media players, and is the driving force behind the introduction of BlogTV to Canada. In January 2007, BlogTV.ca was launched, and Canada was the first market that Israel-based BlogTV has expanded into. I posted about the launch, and am in the process of evaluating the service for them. I'm even planning on producing a regular technology review segment with my son Max for one of their channels. Why not?
Claude and I first talked about BlogTV.ca - what it is, what it is not, and why it came to Canada first - and not the U.S. I also am hung up a bit on the idea of calling it TV when it's web-based. My theory is that people will do anything to get on TV - even it's really just the Internet, and nobody may be watching. That's ok - we're all figuring this out, and blog TV is still just a science experiment, even for the likes of Alliance Atlantis. We touched on the idea of BlogTV being a talent feeder for more traditional media, and I couldn't help but reference the SightSpeed Guy story, which Claude hadn't heard about until now.
All told, we covered a lot of ground, including a few thoughts on the business models around BlogTV - but could have gone on a lot longer. Let's save that for another podcast, and by then, we'll probably do this as part of a video segment right on BlogTV.ca. Stay tuned!
I should also mention that since we're talking about TV and video here, Claude has his own live broadcast on BlogTV.ca, and I was able watch him, fishbowl-style, during our podcast. Pretty strange experience, but kind of fun. I've included a couple of photos here, so you can see what I was seeing while were doing the call.
You can download the podcast here, as well as read more about Claude. Hope you enjoy it, and your comments are welcome!
Photos of Claude on BlogTV.ca, courtesy of my Nokia N93....
Technorati tags: Claude Galipeau, Jon Arnold, VoIP podcasts, BlogTV Canada, Alliance Atlantis, Social Media, video blogging
I spoke with Claude Galipeau; he's the SVP of Digital Media for Toronto-based Alliance Atlantis Communications. The company is one of Canada's largest and most progressive media players, and is the driving force behind the introduction of BlogTV to Canada. In January 2007, BlogTV.ca was launched, and Canada was the first market that Israel-based BlogTV has expanded into. I posted about the launch, and am in the process of evaluating the service for them. I'm even planning on producing a regular technology review segment with my son Max for one of their channels. Why not?
Claude and I first talked about BlogTV.ca - what it is, what it is not, and why it came to Canada first - and not the U.S. I also am hung up a bit on the idea of calling it TV when it's web-based. My theory is that people will do anything to get on TV - even it's really just the Internet, and nobody may be watching. That's ok - we're all figuring this out, and blog TV is still just a science experiment, even for the likes of Alliance Atlantis. We touched on the idea of BlogTV being a talent feeder for more traditional media, and I couldn't help but reference the SightSpeed Guy story, which Claude hadn't heard about until now.
All told, we covered a lot of ground, including a few thoughts on the business models around BlogTV - but could have gone on a lot longer. Let's save that for another podcast, and by then, we'll probably do this as part of a video segment right on BlogTV.ca. Stay tuned!
I should also mention that since we're talking about TV and video here, Claude has his own live broadcast on BlogTV.ca, and I was able watch him, fishbowl-style, during our podcast. Pretty strange experience, but kind of fun. I've included a couple of photos here, so you can see what I was seeing while were doing the call.
You can download the podcast here, as well as read more about Claude. Hope you enjoy it, and your comments are welcome!
Photos of Claude on BlogTV.ca, courtesy of my Nokia N93....
Technorati tags: Claude Galipeau, Jon Arnold, VoIP podcasts, BlogTV Canada, Alliance Atlantis, Social Media, video blogging
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