VoIP has serious problems

In less than 24 hours anyone who is someone in the VoIP business will be headed down to San Jose for the Spring VON show. They will be busy showing off their wares, many of them falling in the “me too” category. And if history is any indicator, them most of them should and must talk about outages at major VoIP service providers, the current #1 Vonage and Lingo. Last year AT&T’s CallVantage had similar issues. These outages are a wake-up call for the entire VoIP industry, which so far has coasted on good will generated by consumer interest in the fledgling technology. The outages and lack of reliability of the VoIP services could turn consumers off, which in turn could slow down the momentum.

The outages are also a reminder that despite what VoIP loyalists might say about the technology, VoIP service lacks the dependability of PSTN network. I don’t expect VoIP to become as reliable as 100-year-old PSTN, but still I would have expected a cellphone network type reliability. I had been expecting these kind of outages for a while, because according to networking history, every-time you hit one million subscribers, the network complexity increases manifold. In our optimism for VoIP we forgot that back in 1990s, the IP networks would crash all the time. Are we seeing that kind of unreliability we should expect from VoIP networks? How reliable is the network infrastructure provided by the likes of Global Crossing and WilTel?

It is time to step back and take a critical view of the state of VoIP service. A reader reminds me that a similar outages were common place when the PSTN went digital, and back in 1990 even AT&T voice network went down when new SS7 software was installed. Vonage and Lingo could be having similar problems. But there is a bigger issue facing the entire industry: centralization of VoIP resources in few locations. “There was a reason for hierarchical networks in voice and data,” a source tells me. More than Vonage and Lingo’s problems, I think we need to focus on the back-end products. How scalable are soft switches? How do the gateways hold up in face of increased usage? What do you folks think?

Lately I have started to worry about all the hype has overtaken the reality of VoIP. Look at the number of companies at VoN this year – its is easily three times the 2004 total. My VoIP press release count has gone from five a day to 50 a day. And rising. Dot.com of late 1990s has now become dot.VoIP.