Things are not looking good in VoIP land, and some of the marginal players are feeling the pressure of resurgent cable operators, and scorch earth tactics of Vonage. Presence of natural born channels AOL and Yahoo is giving some people a pause. e911 is proving to be a major migraine for most. In other words days of price-arbitrage are over, and shake-up might be under way. Andy reports that Lingo is in layoff mode. This could be AWCS sending signals of an VoIP-implosion.
Matt Marshal is batting better thank the Yankees. He just hit one right out of the park and scooped everyone on this most interesting development: Citrix buying NetScaler for $326 million. NetScaler, is one of the many companies that are in the business of “web acceleration” which basically means speeding up applications for use over the wide area network. Recently these companies have become acquisition bait. Cisco bought FineGround Networks only recently. Juniper got into the game with its Peribit/Redline acquisitions. The idea here is pretty simple – as more and more companies rely on broadband and faster pipes they need to bring the applications to match the speeds of those pipes. This is also redemption for BV Jagdeesh, who founded the company a few months after exiting Exodus, a real-estate company masquerading as a data center and a bubble era darling.
Oh goody! A real life Silicon Valley scandal. Matt Marshall wrote yesterday in the Merc about exodus of general partners from VSP Capital. Private Equity Week had reported the same last week and added that Duke University, a limited partner is looking to bail out of the fund. Hmmm.. the big question: Why are people leaving? There’s got to be more than what meets the eye.
The Oregonian: reports that Portland, Oregon-based Network Elements is desperately looking for a buyer. Founded in 1998, the privately held Beaverton company made optoelectronic devices and had raised $115 million in funding altogether, including $15 million in new investment secured in November 2003. But as we all know, the market for fiber optic components is in a bit of a slump and even big players are finding the going tough. One of the investors in Network Elements is chip maker TriQuint, which I guess is going to take its lumps as well. Oregon’s local broadband ISP Internet CDS has decided to call it quits, and is sending its customers to Qwest. Chief Executive Officer Cleve Tooker told a local daily that “his company, caught between rising costs and increasing competition, had lost money every month of its operation.”
Mobile Monday: says Hutch’s 3G service “3” has signed up 2 million subscribers in Italy.
Another day, another ATA. Apparently this one from Vocal Technologies is different, or so the company claims. It is about to introduce a new kind of analog telephone adapter design based on SIPv2 & patent pending algorithms that will cut per unit cost by over 50% – allowing the smaller ISP cost effective entry into the voice market. In their press release they say that, ” Unlike traditional architectures, VOCAL’s ATA hardware and software designs fully utilize modern DSP resources and advanced patent-pending algorithms to eliminate the need for an additional RISC processor, reducing the cost of typical building materials by as much as $8 per design.” VOCAL’s 2×2+1 ATA solution supports up to two telephone lines, two Ethernet ports and a PSTN life-line port for automated voice service switching in case of a power outage or network disconnection and is stackable to larger port configurations. Aswath always talks about how all ATAs should work with all VoIP service providers. Is this the answer.
In the penultimate issue of Red Herring, I had written a long piece about IP-TV, and pointed out that Europeans and Asians would whole heartedly adopt the IP-TV, but it will be a bit of a slow starter in the United States. A story in Reuters
says that IP-TV is taking hold in Europe.
A new breed of TV — featuring on-demand programs and choose-your-own music video channels — is delivered over phones lines that are equipped with a high speed Internet connection. TV over phone lines, also known as TV over Internet protocol (TVIP), is already taking root in Europe, with offerings from France Telecom, Italy’s FastWeb, Britain’s HomeChoice and others. There are many more on the way, with Britain’s top fixed-line phone company BT Group in talks with content companies as it prepares to launch its own service. In Washington, Federal Communications Commission Chairman Michael Powell said on Sept. 15 that almost every major U.S. phone company he has talked with is working to develop TVIP offering. Consultancy Multimedia Research Group estimates there will be 15.6 million TVIP viewers by 2007, up from a few hundred thousand today.
IP-TV in US might be a slowstarter for two reasons – first being that today’s technologies allow only one set-top box to be powered by a IP-TV line, i.e. you can use one television with one line and one set-top box. However, most Americans have two or more televisions. Ergo, we need technology to scale up a tad more stateside. The other problem is not that easily fixed – most Americans live too far from the phone company central offices, which means that the phone companies’ would need to pump more data at higher speeds to overcome loss due to distance. I think 2007 might be too optimistic, but 2010 could be a more realistic target for IP-TV in the US.
The new issue of Business 2.0 has started shipping, and I am frankly quite excited about this one. Many reasons – the first being that I wrote the cover story, The New Road To Riches (See Cover), which is about how tiny start-ups are shunning venture capital and going out and building businesses on a shoestring budget. Due to the maturing nature of the Silicon Valley, these companies are the new “R&D Labs” and are being snapped up by large players. Oddpost, an email start-up was acquired by Yahoo; and there are several other examples of companies like Finger Twitch and Message Rite. I think it was Inc. magazine which moaned that small businesses don’t get venture capital. Well they don’t need it. I remember thinking when I read that Inc magazine piece: they got questions, we got answers. We meaning Business 2.0.
The second reason I am tickled pink about this issue: our technologies of the year list. While there is a lot of cool stuff, our technology of the year is “Internet Voice.” I don’t limit myself to the VoIP revolution from a consumer perspective. We look at the total impact of packetized voice, which in many ways is bigger than Vonages of the world. The reason it is technology of the years: well because it came out of the geekdom into the mainstream. Cable companies started selling packet voice to consumers, AT&T changed its entire business model. It is a powerful force, it will change communications, and it will bring a new telecom order. This disruptive technology may end up rewarding some of the big telecom players because branding still counts for a lot. Companies to watch: AT&T, Verizon, and, of course, Vonage.
My six questions for Sonos. Tom Cullen, vice president of marketing for Sonos (a Santa Barbara, California-based start-up working on a wireless digital music system which may or may not have derived some of its inspiration from Apple’s iPod). answered them.
The Feature: Bluetooth phones have finally gained decent market share — and mind share — even in the US. Most users probably just use it to talk on headsets or in-car hands free kits. However this also means those same users have activated Bluetooth on their handsets, leaving them open to certain vulnerabilities.