Brockmann and Company researches the business user experience. We write about what IT decision makers are planning and doing. We write about the business impact of communications technologies.
Voice over IP has been around for a decade. At Nortel we implemented it in 1996 as card in a PC that our reseller network assembled. With simple control logic, customers could build networks of a few dozen locations to deliver the voice packets without the phone company taxes. Now its evolving past the IP PBX into networked services where the gateways are really at the edge of the network and no longer at the edge of the premise.
ADTRAN, the $500 million Huntsville Alabama manufacturer of over 1,700 products, acquired in September 2009 the Ottawa Canada Microsoft-focused unified communications company, ObjectWorld. More recently, ADTRAN announced the Netvanta UC portfolio, which incorporates the rebranded ObjectWorld offering.
The Netvanta portfolio includes a wide range of busines-oriented communications products including SIP trunking gateways for hosted service providers (Netvanta 6000 series gateways), gateways for CPE deployments, SIP phones, small business IP PBXes and the new Netvanta UC solutions. Extending their presence in networking boxes, ADTRAN now enables software applications through the range of Microsoft-focused software-enabled UC:
UC server - allows VARs to offer feature-rich, software-driven communications-flows as an add-on to existing IP PBXes, or PBXs. This is the original ObjectWorld product line.
Business Communications server - this offer is a bundle of the ObjectWorld software and the ADTRAN Netvanta 7000 IP PBX for less than 100 users.
Enterprise Communications server - this software-only bundle integrates an IP PBX that scales from 75 to 2,000 users with the UC server software.
Business Applications server - the incredibly flexible formerly-ObjectWorld-branded software is available for developing specialized communications-enabled business processes.
Although ObjectWorld had been successfully addressing the needs of hundreds of companies for many years, it struggled as have many others, with the development of sufficient scale in distribution channels to effectively enable the small business market. With the combination with ADTRAN, however it strikes me that in fact, this channel challenge will disappear for these software products. ADTRAN has, over many years successfully built relationships with resellers and customers that reflects their no-nonsense approach to products and their total attention to functionality.
Today, on the same day as the Massachusetts special election for the US Senate (Go Scott Brown), Avaya announces its roadmap for the Avaya-Nortel integration. Wes Durow, the Global Marketing VP mentions that this is only 30 days after the completion of the transaction.
Key points:
No to Rip'n'Replace. Yes to Plug'n'Play.
Plug Aura on top of your Nortel or Avaya-branded IP PBX, plug communications-enabled business applications into Aura. Since Aura is SIP-driven, it will reduce telecom costs, support advanced and comprehensive services - IM, video, audio, messaging - to desktop devices, video endpoints, mobile devices and even softphones.
Aura is the path to the future and Nortel ACE (Agile Communications Environment) is more advanced than any other Avaya technology for Communications-Enabled Business Application integration so it will survive as the key plug in element for Aura.
Avaya will continue to sell existing Nortel and Avaya products. Customers will be encouraged to deploy Aura on top of their PBX deployments.
Contact Centers need SIP, SOA: Aura and ACE are therefore key to enabling more integrated applications, independent routing engines and more conferences not point-to-point sessions. SIP at core, SOA, inherently multi-channel and conference-based.
Contact Center Elite (Avaya) continues to be sold into large enterprise. Nortel's CC 7 will be supported and sold which is to be upgraded to CC 8.0 with more SOA and SIP features, blending technologies to target midmarkets.
Small Medium Enterprise - TDM (Partner, Integral 5, Norstar). Hybrid (IP Office, BCM-from Nortel). All SIP (SCS-from Nortel uses sipX, an open source project). BCM will continue, IP Office will be updated to be the going forward platform for BCM customers with enhancements in admin, management and operations. SCS continues as the SIP appliance.
Nortel data products portfolio will be taken whole. It is a built-for-purpose data portfolio optimized for real-time. Data center, campus, wireless, branch switching and a host of security capabilities. Excels in always on reliability, 7 x better resiliency, better call completion rates, 50% better TCO and smaller footprints and 20 x better performance.
Complementing the greatly expanded product portfolio with new services in support of channel model. Conflicts in approach: Nortel is very channel centric, Avaya less so. Changing to more 'industry standard approach.' Software support had been case-based and umbrella contracts for global customers. Now, moving Nortel services to a partner-enabled model.
Avaya Professional Services, Support - making this more partner friendly (resale, software support bundled with partner service), Operations (Managed Services).
12 month warranty to 3 months.
End of cases. Annuity-based required software support contracts over 2010.
The go-to-market model for managed services is for partners to take the lead in managing customers' multi-vendor environment.
Channels - High Touch Channel Centric model - complex systems needs lots of direct touch to drive awareness and demand for the brand and product inputs. Avaya wants to be accountable for the customer relationship. Avaya Connect, announced in October 2009 will be available to Nortel resellers in February, simplifying certifications from product-based certifications for sales, support, architecture to UC.
Gives partners ability to consistently invest around the world. Stability gives them assurance and predictability in their orientation to their customers and their own support models.
Why will this deal succeed? Both have common heritage, culture, support for standards, customers and engineering standards. Buying a bankrupt company meant Avaya could insist on restructuring before the close, and could decide on the disposition of people, real estate and IPR before the deal was closed. Normally, these discussions don't begin until the close.
After winding down from my trip to Los Angeles and IT Expo the other week, I had a telephone briefing with Serge Forest, the VP Marketing at Sangoma, the publicly-traded Canadian card designer and card manufacturer because our calendars couldn't align at the event. I've been watching Sangoma for some time as they are a major partner of a friend of mine serving the Caribbean and Latin American markets as an open source distributor, and I met the CEO, David Mandelstam, at IT Expo East.
Sangoma has built its business around high quality building blocks for open source IP PBX integrations, offering cards for voice processing applications. Today, the company also delivers advanced predictive dialer cards for leading contact center software vendors and Microsoft ResponsePoint systems. The portfolio includes PCI cards for digital, analog and IP voice applications, but also includes DSL, frame relay and X.25 interface cards.
At IT Expo, the company announced the NetBorder Express Gateway SIP-TDM gateway card lineup which includes software to quickly enable PCI-based gateway functionality in systems built by OEM partners such as CudaTel, a newly formed subsidiary of Barracuda Networks, which announced their new product and relationship with Sangoma on Thursday. Using FreeSwitch, (an open source IP PBX), standard server packages that Barracuda knows full well how to source, the Sangoma NetBorder Express Gateway cards and a reasonable portfolio of IP and digital phones, CudaTel hopes to quickly address the growing small medium business market for next generation telephony products.
The new NetBorder Express Gateway cards are available in a variety of packages including 4, 8, 12 ports of AnalogFXO and from 1 to 8 ports of T1 or E1. Integrators and OEMs can choose PCI with Autosense Compatibility for 5 V and 3.3 V busses or PCIe Interface with single lane bus. The cards also come standard with leading echo cancellation and DTMF recognition features.
Richard Buchanan gave me a 30-minute overview of one of the most interesting companies that I met at ITExpo last week. The CMO of the 5-year-old startup talked about the company's current operation and plans for an upcoming release.
Founded in 2004 and shipping product late in 2007, the company offers a SIP gateway appliance and a network service that attaches to the broadband network for a one-time $240 retail price. The consumer takes the appliance home from BestBuy, Costco, amazon.com, Fry's and many others in a nationwide network of retailers and plugs it in. They visit the company website (www.ooma.com) and authenticate themselves to the service.
To make the service go, users plug their analog phones into the base which is connected to the broadband network or the inhome Ethernet network, which also connects into the inhome twisted pair wiring of the regular phones. Any remote units get power, dialtone and advanced feature interactions from and with the base unit. Users might then plug the kitchen phone or the master bedroom phone directly into the remote unit.
The basic value proposition is that Ooma saves consumers big bucks on their phone bills, and unless they choose the features of the Premier service, there are no more monthly charges for phone service except international LD which is prepaid at something like $.02/minute depending on where you call.
Ongoing Revenues With Premier Service
Part of the authentication process includes denoting the physical address where the hub is located which becomes the E911 physical address. Users are automatically subscribed with a free limited time offer for Premier services which include instant second-line, multi-ring (simultaneous ring), message screening, Do Not Disturb, transfer to voicemail, voicemail forwarding to email, personal numbers that terminate on the same hub, block-listing. These extra services cost $99.99/year.
Richard explains that the company expects pass the 100,000 subscriber milestone later this year.
Clever Adoption of DECT in USA
Upcoming releases of the Ooma appliance incorporate more sophisticated electronics to enable a high quality in-building wireless service. Unlike 900 MHz cordless phones which were popular and often interfered with multiple users in a neighborhood, DECT is a digital standard but was not supported in the USA until the FCC enabled spectrum for the service in the 1920 - 1930 MHz band, in 2005. Ooma plans to enable and sell DECT phones that work with the next gen Ooma base station.
This is a stylish and convenient refresh of the home phone systems that most consumers have cobbled together over many years. This design, unlike the original Ooma appliance design which required the use of an analog phone, is a clean replace, and at something like $49/handset to a maximum of six extra phones, is a great deal. But, wait there's more...
... Richard also explained how the new base uses bluetooth technology to allow the busy homeowner to put their bluetooth-enabled mobile phone next to the Ooma base, where it might recharge overnight. Now, however, the base will sync up with the mobile phone and can process all incoming calls to the mobile phone as if they were home calls - all the remote extensions ring and picking up the call on a DECT handset is the same experience as picking up the call on the mobile phone in the first place. This is an awesome feature.
New services that Ooma may plan to incorporate with the design of the new device includes SMS, VoIP client on WiFi-phones such as the Apple iPhone, home automation features, wireless door intercom and network monitoring services.
It strikes me that these kinds of innovations will surely accelerate the demise of landline services in the USA.
Check out this cool commercial on YouTube for Ooma:
eBay announced this morning that they'll be selling a majority stake (65%) of Skype to Silver Lake Partners and others for $1.9 billion. The deal values the world's largest international phone company (by revenue and minutes) at $2.92 billion, a 12% premium over the company's original acquisition price of $2.6 billion, although a much higher premium over eBay's valuation on the balance sheet.
Note that Skype's goodwill was written down by $900 million (35%) in October 2007.
Don't forget how private equity works. PE firms buy companies at (supposedly) distressed prices, saddle them with the debt of their purchase prices and then operate them to high profitability standards that generate dividends for their partners. So, Skype will have to generate earnings that can service $1.9 billion in debt. Can they?
With the upcoming IPO, Skype is out marketing itself and its capabilities as a growing enterprise. GigaOm presented a nice candlestick graph showing growth in revenue - now producing $153 million/quarter up some 21% over first quarter 2008. With 445 million subscribers, there really aren't too many clubs that are as large as this, except maybe Catholicism or Google neither of which keeps track of your password.
Interesting Skype minute statistics:
23.6 billion skype-to-skype minutes in Q1, 2009
2.9 billion skypeout minutes in Q1, 2009
Skype reportedly is the largest international phone company, delivering some 8% of all human-to-human voice communications. Most phone companies only participate in one end of that international communication while Skype is designed as a global service, so is quite capable of handling both ends of the typical call.
While attending VoiceCon Orlando last week, I met up with Rich Chin and Brad Herrington, two product marketing managers from Interactive Intelligence, the successful Windows-based IP PBX, contact center and voicemail solution provider. With 3,600 installations in 88 countries, the company earns 20% of its revenues through a direct sales organization with the remainder coming from a global network of resellers and systems integrators. The applications have been Windows since inception and SIP-enabled since 2003.
The products are positioned as an 'all-in-one' where with the use of software keys, customers can deploy the appropriate functionality on demand, with built in integration to other, related and embedded applications as required.
Of course, marketers who prefer the 'all-in-one' positioning like the association with the Swiss Army knife, but from my experience, it requires engineering and functionality tradeoffs that aren't necessarily complementary. Like the Swiss Army knife with the dull scissors, the stunted or lost plastic toothpick, the corkscrew that is too short for many dry corks and the short saw blade, all-in-one devices are easy to compete against. Customers innately don't trust products that purport to fit in many places such as the snake oil salesman claiming the product can cure cancer, lame horses and incontinence.
From my own experience in another life, we marketed a WAN switch that would take the place of frame relay switches, TDM muxes, ATM switches and IP routers, but at the same time often lacked the port density, the low prices, sometimes feature richness and the rapid development cycies that single application vendors such as Cascade, Newbridge, Stratacom and Cisco could boast. Although all-in-one is easy to market, it is much harder to sell because you have to demonstrate your competency in more than one selection area, or you can only sell to customers that are searching for multiple applications at once, or can appreciate the integration value, which I believe, is a much smaller market than the sum of the applications.
The Netvanta portfolio includes a wide range of busines-oriented communications products including SIP trunking gateways for hosted service providers (Netvanta 6000 series gateways), gateways for CPE deployments, SIP phones, small business IP PBXes and the new Netvanta UC solutions. Extending their presence in networking boxes, ADTRAN now enables software applications through the range of Microsoft-focused software-enabled UC:
Today, on the same day as the Massachusetts special election for the US Senate (Go Scott Brown), Avaya announces its roadmap for the Avaya-Nortel integration. Wes Durow, the Global Marketing VP mentions that this is only 30 days after the completion of the transaction.
After winding down from my trip to Los Angeles and IT Expo the other week, I had a telephone briefing with Serge Forest, the VP Marketing at 
eBay announced this morning that they'll be selling a majority stake (65%) of Skype to Silver Lake Partners and others for $1.9 billion. The deal values the world's largest international phone company (by revenue and minutes) at $2.92 billion, a 12% premium over the company's original acquisition price of $2.6 billion, although a much higher premium over eBay's valuation on the balance sheet.
While attending VoiceCon Orlando last week, I met up with Rich Chin and Brad Herrington, two product marketing managers from 