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.

Over the past ten years Orlando, FL-based Voxeo Corporation has grown to become one of the largest hosts of enterprise Interactive Voice Response (“IVR”) applications, building not only tools for developing and hosting these applications but also a track record of twenty profitable quarters as a self-financed private company.

Historically Voxeo has provided, at no charge, resources for C++/Java and Web Developers to produce customized IVR applications that are then hosted at their network operations center. Their developer community has grown to over 31,000 participants. As their expertise has grown they have also developed their licensable Prophecy SIP platform for those enterprises that wish to host their own services using Voxeo’s tools.

Today Voxeo announced an expansion their development expertise, technology base and user community through the acquisition of Germany-based Voice Objects.

While acquiring ownership of Voice Objects’ technology assets, Voxeo CEO Jonathan Taylor emphasized in an interview with me yesterday that Voxeo’s first reason for making an acquisition is to acquire the expertise and professionalism of the employees. Contrary to the popular perception of making an acquisition and focusing on the technology assets, Voxeo looks for team players who can fit into Voxeo’s culture and then look at the technology synergies.

As a bonus the Voice Objects acquisition brings to the table as customers a new layer of developers; namely those who routinely develop “self-service” applications for service providers and enterprises as a full time occupation. Jonathan described Voxeo’s current developer resources as having two layers: API-based telephony libraries favored by C++/Java “low level” developers and  XML-based telephony languages using Voxeo’s proprietary but simplified VoiceXML as well as other XML standards for web developers. The acquisition of Voice Ojbects introduces a higher level of object-based telephony tools, employing drag-and-drop and visual rapid development techniques.

Whereas Voxeo’s legacy tools facilitated people-to-people connections, Voice Ojbects’ toolkits facilitate the development of “self-service” applications where no human is involved in delivering or provisioning enterprise or carrier-based services.  It is multimodal in that not only is voice involved but also SMS messaging and video can be brought into the application where appropriate. For example, T-Mobile Czech can easily program changes into their self-service applications reducing development times by an order of magnitude while dynamically addressing market needs.

Taylor described Voice Objects’ toolkits as having three major components: a rich development environment, unified self-service middleware – that connects customer information within an enterprise with customers who desire access to this information via voice, SMS or other modes – and, finally, extensive analytics. The analytics component gathers real customer usage data and provides justification for making application modifications based on user experiences as well as changing local market conditions. To quote Jonathan: “Business owners don’t want to build a bad experience; however, it is challenging and difficult to build applications that work well for customers.”

In closing our interview, Taylor mentioned that Voxeo, recognizing that the best way to recruit talent is through acquisitions of this nature, will be looking at three or four similar acquisitions in 2009 building up a team of “great people who understand the industry well”.

The acquisition of Voice Objects will not change Voxeo’s business model of making their developer resources available at no charge while charging either for hosting of applications or for platform licenses sold to enterprises that wish to host their own applications.

It appears that Voxeo continues to set a benchmark for operating a sustainably profitable business in the Voice 2.0 world. On a broader scale Jonathan has provided an overview of the various levels of developer segmentation and classes of tools available on the market today for creating Voice 2.0 applications.

Other posts on this acquistion:

• Vox Populi “Best Freaking Voice Platform on the Market”.
• Dan York at Voxeo: What the Voice Objects Acquistion by Voxeo means for voice applications developers.
• Michael Dinan, TMCNet: Voxeo Acquires VoiceObjects, Expands Cost-Saving IVR Solutions
• Andy Abramson, VoIP Watch: What’s New In VoIP? Lots with Gizmo, Voxeo and Fonality

Tags: Voxeo, Voice Objects. Jonathan Taylor, acquisitions

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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About three weeks ago I had the opportunity to interview Mobivox’s new CEO Peter Diedrich, a telecom industry veteran who brings both telecom executive and VC-funded startup experience to the table. Mobivox has traditionally provided a low cost worldwide calling service, including free calls to Skype contacts. Key features included (i) no client downloads, (ii) launch a voice call from any telephone handset and (iii) access via over 340 points-of-presence in 40 countries. However, unpublicized has been that they also provide a platform for voice enabling the user interface to many other potential communications service partners.

Historically, Peter sums up Mobivox as having proven they can provide and host a simple service with a voice-enabled user interface; their primary challenge is to determine what should be free. The gems he sees in the current platform include:

• a voice user interface, incorporating VoxGirl, with support for many languages
• a team experienced in voice recognition and management technology
• web-based calling from a (user generated) address book
• the ability to set up and manage contacts via a voice recognition engine (and to include voice tags for each contact)
• an little publicized ability to send email and SMS messages via voice

Going forward Peter sees the challenges for the Mobivox service to include:

• make the user experience dead simple
  • determine what we do vs what we don’t do
  • easiest to just tell customers what they do
  • most important for “hands-free” requirements
  • no client download
• making the address book their stickiest asset
  • seamlessly import Outlook/Gmail/etc.
  • obtain access to mobile device address book
  • create contact voice tags
• provide an access number directory “download” to mobile devices
• make the service “from anywhere at anytime on any device”

Given the challenges of generating a worldwide user base, going forward Mobivox plans to continue the current service but also look for opportunities to find service provider partners who can take advantage of their voice-enabling platform. To have a more complete offering they are also looking to include API’s that go beyond “call control in the cloud” to include support for call completion, backend billing, CRM interface and fraud management.

Their final challenge is to improve monetization; reversing a pre-appointment decision to make all but calls to Skype contacts chargeable, Peter sees the need to develop both a retail and partner customer base.

• member-to-member calls remaining free
• pricing packages incorporating modified PSTN access “minute buckets”
• text messaging services with, say, the first five messages free, then pay
• study customer demand and usage; tailor packages to customer needs
• agreements with service providers

The first service provider partnership was announced today with Jajah; Phil has seen a demonstration and will be commenting further.

Tags: Mobivox, Peter Diedrich, Skype, Jajah

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

HTML Code Snippets Available : No

Main Category :Service Provider, Enterprise, Small Business

Skype partner HiDefConferencing enhances their conferencing infrastructure to provide high definition voice for all Skype participants on a call.

Skype-to-Skype calls have long been known for their high quality audio; certainly when I am talking to another Skype user using my stereo headset, it sounds like the other party is “inside my head”. To give a brief explanation:

The human voice and ear have an audio bandwidth range to produce voice and hear sounds up to 22 KHz. But the introduction of electronics, such as microphones, speakers, switches, amplifiers and repeaters, into the landline telephone system reduces that bandwidth transmitted by the legacy telephone system to under 4 KHz — sufficient to clearly get across the essence of the voice conversation but certainly not for recording the deep audio of that high pitched soprano or tenor solo you just may be hearing and definitely not providing the full richness of a face-to-face conversation. Mobile phones have an audio bandwidth that is about 50% of landlines bringing us the sometimes scratchy quality of mobile calls. But the Skype engine is capable of handling audio up to somewhere around 12KHz, providing a much richer and more realistic sound approaching the reality of face-to-face human conversation. At VON Boston next week, the general concept of high bandwidth voice in real time conversations is taking on the term High Definition Voice (HD Voice) at a session in the Innovators track called The Secret Life of HD VoIP. (As an aside, audio bandwidth should not be confused with the network bandwidth required to make a Skype call; different issues related to transmission of voice packets.)

One problem created by this reality is that Skype calls to SkypeOut numbers lose that high bandwidth quality. In the worst case, due to all the compression/decompression going on involving both voice and wireless compression standards, it sometimes becomes difficult to complete a call to a mobile phone. And in conference calls involving both Skype and SkypeOut participants, the call quality is reduced to the lowest common bandwidth.

For three years, VAPPS, Inc. of Hoboken, NJ has been offering its HighSpeedConferencing service extending conference calls involving both Skype and PSTN participants to as many as 500 participants. A key differentiator of this service is that VAPPS uses their own proprietary conferencing bridge which mixes the Skype and PSTN audio streams for listening by all the conference call participants. Today VAPPS is launching a beta high definition voice version of their High Speed Conferencing service that incorporates an enhanced version of this bridge. The result is that all Skype participants on the call will hear each other at the full audio bandwidth inherently available with Skype. Participants on landlines and mobile will still get the quality level associated with the underlying landline and mobile services.

Ben Lilienthal, CEO and Founder of Vapps, Inc., has made several demonstration calls with me over the past few months where he goes from a Skype connection to a landline connection; the voice quality difference is very noticeable with a richer deeper sound from the Skype connection and a “squeakier” sound on the landline connection.

But from a target market perspective, Vapps has combined the new high definition voice capability with the established robustness. reliability and scalability of their conferencing server into services that target the entire enterprise conferencing market currently served by the legacy telcos, such as AT&T, Verizon, Bell Canada and Telus. With its continued 500 participant capacity, weekly sales meetings, virtual webinars and even (eBay) analyst presentations can now be handled through the HighSpeedConferencing service with much higher voice quality and significantly lower costs.

So where does Skype fit in? HighSpeedConferencing offers, in addition to a “Pay-As-You-Go” plan, several monthly subscription, unlimited use plans based on the maximum number of participants. The “additional costs” are in making the connection between the participant and the conference bridge. Under these plans:

• Skype-based participants have no additional costs
• Calls from landlines and mobile devices have any associated long distance charges to the conference’s landline number
• The host can also make available an 800 number (in eight countries) and pay for the participants calling in from a landline.
• The plan includes a base number of toll-free minutes per month for landline/mobile participants.

Reservations and scheduling of calls are optional but no reservations are needed. Additional features with the subscriptions are:

• Call recording with 30-day storage
• Hand raising along with host control of individual participants’ mute/unmute
• Web Controls for host management of the calls

For instance, a 100 user plan costs $125 per month for the host; this includes unlimited minutes for Skype users, 2500 toll-free minutes for landline/mobile participants as well as the call recording, hand raising and web controls features.

Also of note:

• Skype participants on a Pay-As-You-Go call will pay $0.04/minute per participant; landline/mobile participants (US/Canada) are $0.07 per minute per participant
• A 30-day free trial of the “HighSpeed 25″ subscription is available to allow enterprises to work out how HighSpeedConferencing can be incorporated into their communications activities.
• High Speed Conferencing is a Featured Skype Extra for this quarter and can be accessed from the Tools | Do More | Get Extras menu in Skype.
• High Speed Conferencing also works with the Skype-enhanced collaboration services Skype Extras: Convenos and Yugma Skype Edition.

From the press release:

We are thrilled to offer this service to the small businesses and entrepreneurs that are always searching for the most effective tools for success,” said Ben Lilienthal, CEO of Vapps. “Highspeedconferencing.com presents the perfect convergence of high quality, low-cost and flexibility in the audio conferencing industry.”

The ability for small businesses to host these calls via the telephone or the Internet, not only enables them to present their clients with big business offerings, such as flexibility, but it also enables them to do so using the low cost of Internet communications.

Skype for one has recognized the importance of applications built by partners like Vapps for three years now and the value they bring to the Skype platform. Since 1st October, 2007, Skype has been promoting the Vapps HighSpeed Conferencing solution to its 220 million registered users as a premium extra.

Update: Andy Abramson comments at VoIP Watch:

A call yesterday showed how bright and full it sounds. The platform works with mobile, VoIP, PSTN and Skype inbound calls, and can handle up to 500 simultaneous participants per call.

Footnote: we are starting to see mass confusion about what is meant by HD when it comes to audio-based services:

• Intel actually has set specifications and released products using the term HD Audio
• HD Radio really means Hybrid Digital Radio
• And VON Boston next week is having a session on HD VoIP.

Tags: Skype, VAPPS, HighSpeedConferencing, Convenos, Unyte, Yumga Skype, HD Voice

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