Breaking News: Voxeo CEO Jonathan Taylor is to make a significant announcement at eComm 2009. Click on the eComm logo below to register.

When Dan York had to find a new employer in the fall of 2007, he kept hinting he had found a great employer but could not reveal it until he started his position. Turns out that Dan had become employed by one of the true innovators and success stories in the voice applications space: Voxeo, a vendor of IVR and VoIP platforms and services.

I have previously had the opportunity to interview Voxeo CEO Jonathan Taylor for a couple of stories (see links below). I find that Jonathan always has an interesting and informative story to tell. Voxeo is a case study in innovation leading to business success and is a sponsor of eComm 2009 (which means their business must be accelerating). Last week conference organizer Lee Dryburgh interviewed Jonathan and has put both the podcast and transcript up on the eComm 2009 website. Jonathan goes back to his unconventional roots in learning about telecomm and information technology and subsequently contributing to their convergence.

Voxeo turns out to be the outcome of his lack of deep exposure to, or history with, the business side of either telecomm or information technology but rather a passion to figure out “how things work” and “what customer pain” can be addressed by new products and services in a convergent world. He learned early on that, if I solve someone’s problem, the business will come.

In the interview he talks about:

• How he acquired, in one weekend, over 800 access numbers to bulletin boards in the days when “’We’re going to call your grandmother, but let’s only talk for a couple of minutes’.  Long distance was expensive.”
• How his activity led to a visit from the Secret Service. Turns out the Secret Service got a lesson in new communications technology from Jonathan and some of his acquaintances.
• His experience selling storage equipment and Novell Netware LAN’s to large BBS’s (including his first lesson on how  important email would become):

At the time, most BBS software was not multi-line, suffering on DOS, largely.  To build a large VBS [BBS?] was like thirty lines.  You would actually get thirty computers with one modem on each computer and connect them together with Novell NetWare.

• Moving from Sound Blaster to Dialogic cards to solve his problem of “There must be a way to connect a telephone to a computer”. And how it resulted in his first experience with an offering called ”Unified Messaging”: “We accidentally built a unified messaging platform.  We had no idea that there was a concept called Unified…” He went on to build his first business that eventually got sold to MediaGate.

I was thinking about what I wanted to do next.  I kept thinking back to when we first started developing the phone interface for the IRDG Unified Messaging product.  I was remembering, especially as someone not from a computer telephony or telephony background, how unbelievably arcane and difficult it was to get the Dialogic card working right, getting it to work consistently, and then dealing with phone companies to get T1 lines and Wink Start, Loop Start signaling, and DID’s and literally all the stuff I had never heard about. ….

… Right, but I had never heard of before.  I would sit down to have conversations with people and I literally had no idea what they were talking about.  I would just pretend I did and take notes, and then go home and try to figure it out.

• The other key learning from his first company: “’How is it that some of the largest companies in telecommunications don’t have enough people with enough experience to get all this stuff up and running?’  We’ve been doing telephony for eighteen months, now.”
• The three key words that resulted in starting Voxeo: “computer telephony sucks” So how did they make it not suck (in 1999)?

We roughly divided the problem into two domains.  First, it was incredibly difficult, especially outside of telephony, to create applications for the phone, learning all these API’s and the terminology.  We said what if we take web technology and apply it to the phone so you can build a voice application the same way you build a web application.  What would that look like?

The second domain was deployment.  We said rather than selling a box or software to people, and then they have to go deal with carriers or their local phone companies and all that strange terminology and process, we will just pre-deploy it all for customers, in our own data centers, and they can access that platform over the Internet.

Essentially, it was XML-driven telephony development, hosted or what we would now call Software as a Service or cloud-based deployment.

Jonathan then goes on to describe the evolution of VoiceXML, CallXML (built a prototype while at home with pneumonia) and CCXML that became core to Voxeo’s services and platforms. He also talks about being turned down by VC’s because he was only asking for $3 million; his solution to get funding: same business plan, ask for $30 million. And he talks about how Voxeo has leveraged web services into a space that did not understand the potential and value-add of web services a decade ago.

Go to Lee’s eComm 2009 blog post with both a link to the podcast as well as the transcript of the interview to get the full story. It makes a great case study in how technology evolves into a very successful business.

In closing, two comments:

• Columbia Data Products, where Jonathan was first employed, had tape drives that were a key module to a demonstration setup I used to manage for demonstrating graphics plotters for IBM mainframes and DEC/Data General mini-computers.
• At BBS Con which I attended in the summer of 1995, Jonathan should have stopped by the Quarterdeck booth to solve his problem of having a separate phone line for each BBS computer. A significant portion of Quarterdeck’s DESQview sales were to BBS operators so that they could have eight lines coming into a single PC.

Finally I have just confirmed with Lee Dryburgh that Jonathan will be speaking at eComm 2009 and making a significant announcement at that time. Register here and use “one touch” for a 20% discount.

When fellow blogger Dan York joined Voxeo Corporation last October, very few of us in the IP-based communications blogging space had heard of this rapidly growing service provider. Over the next few months, sometimes with Dan’s assistance, Voxeo has become a familiar name identified with a self-financed startup, a profitable business and a very large enterprise customer base focused on supporting voice applications through third party development activity. Revenue generation comes solely from their “cloud” hosting and VoIP/SIP communications server software business. Last week, in following up on a couple of press releases, I had the opportunity to interview Voxeo’s CEO, Jonathan Taylor, and to learn much more about their success story.

Fundamentally Voxeo provides hosting environments for telephony applications, whether hosted on their in-house server “cloud” or on a customer’s premise-based servers. Developers write applications to their Prophecy platform creating XML files and SIP connections that are understood by the Prophecy-enabled servers. The Prophecy 9 client used by developers to create and manage these applications is now available for Mac OS X and Linux in addition to their legacy availability for Windows. Originally Voxeo only offered a hosted service but two years ago, in response to customer demand, they also provided the capability to support customers’ premise-based servers. Key elements of their program that have led to their success (and profitability) include:

• No charge for downloading, and use of, their software
• A focus on ease of development and deployment
• Charging customers only when a service is launched and providing business value
• Option to use either Voxeo’s hosting “cloud” or customers’ premise-based servers (usually based on the overall business case for supporting the application)
• Licensing based on a “per port” or “per minute” business model, as appropriate
• Providing Prophecy as a suite of components for SIP implementations
• A platform based entirely on open standards
• Including solutions for supporting conferencing, voice mail, call recording, speech recognition and auto-attendant requirements
• A strong channel and developer focus recognizing the role of third party professional developers as their key to implementing their enterprise customers’ services
• Lowering their customer support requirements through innovation in their software.

Two recent press releases covered:

• Launch of Prophecy 9, providing support for OS X and Linux clients to their platform as well as a new management console that not only reduces the complexity of development and associated deployment costs but also provides increased scalability.
• Acquisition of Beijing, China-based Micromethod, not only complementing Voxeo’s Prophecy suite of modules with their SIP-focused products but also providing a base for expanding Voxeo into serving the Asia-Pacific markets..

When I asked Jonathan about representative applications beyond the flexible yet effective IVR applications they can support, the list of several thousand applications includes:

• Intelligent call routing (using their call control features)
• Voice mashups providing access to, say, email or Google Calendar
• Anonymous calling services
• Facilitating calling services for children’s websites such as Nickelodeon.

Jonathan summed up their application support as providing a “services innovation platform” that operates “at the edge”, bypassing any carrier dependence beyond acting as a pipeline for their services. A final key feature is their provision of a highly accurate billing infrastructure, critical to their ability to support both their own invoicing and receivables management as well as their customers’.

Last Wednesday Voxeo issued a third press release discussing some of their business success with revenue growth of 99.7% (no rounding allowed – who would believe 100%, they say), 18 successive profitable quarters and a very high customer retention rate. Not being a public company they do not need to release any detailed financials. But building and supporting a community of 31,000 developers probably says it all.

In conclusion, Voxeo’s business represents a practical, successful and profitable implementation of Alec Saunders Voice 2.0 Manifesto, emphasizing that the value-add for voice conversations going forward lies in the applications.

Note 1: Tomorrow morning (August 26) Voxeo CEO Jonathan Taylor will be the guest for Alec Saunders’ daily Squawkbox conference call. Dan York provides more details on how to participate. If you miss the call, you can hear the recording posted on SaundersLog.com.

Note: Voxeo’s hosted “cloud” also supports connectivity to Skype for inbound calls.

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Voxeo is a hosting service for a variety of voice related business applications including IVR, conferencing services and proprietary enterprise business process applications amongst others. To encourage application development they provide a developer’s site with developer guides. Other applications deployed include auotmated speech recognition, school notification services, package tracking and a front end for voice biometrics authentication. Connections can be made via DID, 800-number with PIN, SIP and Skype. Summary from Supplier : Voxeo helps enterprises improve services and lower costs by automating and connecting their most common phone calls with IV and VoIP solutions.

Main Website : http://www.voxeo.com

Products and Services :

• IVR server hosting
• VoIP platforms hosting services
• Voice Applications
• Prophecy on-premise server license

Programming API Available : Yes

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Main Category :Service Provider, Enterprise, Small Business