Is VoIP Dead?

There has been a flurry of blog postings and industry chatter recently all around the question of “Is VoIP Dead?”

Alex Saunders says, yes, it’s dead (http://saunderslog.com/2008/12/30/2008-the-year-that-voip-died/) with the caveat that it’s the VoIP-specific industry that’s dead and not the idea.

On the side of “VoIP is not dead”, Jeff Pulver leads the charge (http://pulverblog.pulver.com/archives/008747.html). Ever the IP Communications optimist, Jeff thinks that it’s just a timing issue and there will come a day when innovative VoIP companies will rise from the ashes, just you wait. Uber analyst Jon Arnold, who sparked the most recent thread (http://www.ipcom-insights.com/blog/jon/2008/12/my-take-on-2008-voips-not-dead-yet.aspx), declares VoIP is not dead and ready to thrive.

Silicon Valley blogging giant Om Malik of GigaOm covers both sides of the debate (http://gigaom.com/2009/01/01/voip-dead-or-alive/) and doesn’t come down either way. But clearly he is a skeptic given the many failures for new companies to arise. Ian Bell (also of GigaOm) comes down harder on VoIP saying that VoIP had promise back in the day. But Ian inexplicably blames the failure of VoIP on the “PSTN” getting in the way of true innovation.

To be sure, VoIP is now the de facto standard for all future telecom service (ALL current deployments are VoIP and in the near future, 100 percent will be VoIP. All carrier switches. All enterprise PBXs. All transported calls. Everything). So let’s put this question to rest. VoIP is the present and the future of telecom with absolutely no doubt about it.

But who cares. The mistake many in the telecom industry made is assuming that VoIP was something innovative from a business model perspective or that you could differentiate on it. Also, most in the industry either used VoIP to essentially do the same thing (i.e., plain ol’ telephony service aka POTS) or continue to use VoIP transport as an arbitrage mechanism for telephony.

To the defense of the former VoIP industry, there were many in the vendor community that tried to create both the underlying innovation structure (e.g., VoIP and SIP) and in fact, did create a number of compelling applications and features for service providers to deploy. At my former employer BroadSoft, we created many interesting applications (a click-to-dial toolbar in Microsoft Outlook, rich video telephony, custom ringback for landlines, easy to use find-me-follow-me a.k.a. “simring”, a compelling fully hosted PBX application, integration with Salesforce.com). The list goes on and on.

However, the bottleneck was not on the vendor side but with our customers (the service providers). They cried the clarion call for “innovative applications” but at the end of the day, really only wanted to deploy the same thing they were comfortable with (POTS!!!). It did not matter that it was VoIP, the offer was the same thing. For some service providers, they bought the dream of innovation but could not execute (or more accurately, could not market to end users anything more than the same thing). And lastly, there are the arbitrage players: Service providers that used this wonderful new technology to focus on the innovative offer of low prices (most famously Vonage, SunRocket, Jajah, and iBasis, but also hundreds of others).

One could make the argument that service providers tried but ultimately end users did not want new services. I think this is a cop-out and a bunch of BS. There were (are) a few players like PhoneTag and Skype that ultimately looked at the underlying technology and asked the question: “How can I provide either a better experience for the end user or disruptive economics?” or some combination thereof. The fact of the matter is that most service providers never tried.

There continues to be some amazing underlying technology being created but mostly sitting in the software vault of vendors waiting for someone to unleash it in a meaningful way. It takes not only great technology but the ability for someone to both harness and execute on a vision.

I got tired of waiting around for the industry and decided to take the future in my own hands. After 13 years on the vendor side, I determined that what the industry needs is a service provider to get something directly in the hands of the ultimate end users – consumers and business customers.

And so I’m putting my money where my mouth is with Vidtel (http://www.vidtel.com). My vision is that VoIP is a nice technology for POTS but a great technology for video. Video is to VoIP what radio was to TV in the 1930s: A visual superset including human voice but also the human face. We are building on the great underlying VoIP and SIP plumbing developed in the past 13 years to create something meaningfully compelling and new for the end user that is easier to use at a reasonable price but also life changing.

So is VoIP dead? As a method of better plumbing, it couldn’t be more alive and successful. As a driver of innovative telecom deployments, it is surely in intensive care hanging on for dear life. For all of our sakes, let’s hope the post-mortem blogs of 2009 hail the rebirth of VoIP and innovation yet to come.

Scott Wharton is the founder and CEO of Vidtel. He can be reached at
scott@vidtel.com.