In a story on VoIP Planet, Gerry Blackwell provides a case study of the implementation of OnState’s Virtual Call Center at CyberDefender Corp., an Internet security software and services firm.

CyberDefender’s new director of customer service, Jose Martinez, investigated a few solutions, including traditional Panasonic and Nortel automatic call distribution (ACD) systems. But in the end, Martinez chose a radical on-demand service from start-up OnState Communications, and coupled it with VoIP service from Skype.

“OnState was very competitive,” he says. “But not only was it priced right—and this was very important to us—they were able to implement very quickly.” It took barely a week to get agents up and running and trained.

Gerry goes on to talk about the cost savings over traditional premise-based and hosted call center solutions, the visibility and transparency of the call center activity in real time and the ability to rapidly scale the service as they add more staff. He then quotes OnState CEO Pat Kelly:

“Conversation management and knowing about people are the most important elements in our application,” says OnState CEO Pat Kelly. “We’re interested in phones, but the problems our customers come to us with are not really about phones.”

“We’re more concerned with understanding the business presence of employees. What can they do—what skills do they have, what kinds of calls can they answer? And what are they doing at this moment. Are they at work today? Are they free? Are they involved in a chat? Are they on a phone call?”

Read the entire article to learn more about how OnState handles calls, its integration with Skype and Google Talk, the competition (such as it is), costs and OnState’s DNA that underlies its legitimacy as a call center solution.

Bottom Line: A win for CyberDefender and a win for their customers with improved customer service and an ability to scale appropriately as demand varies over time. And a a Voice 2.0 world application where Skype is contributing to business model disruption.

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Over the past three days there has been a continuous stream of presentations that provide insight into a wide range of issues, opportunities and perspectives in the IP-based communications space going forward. While there will be more posts covering individual presentations, it’s worth taking time to mention a few highlights:

• Most innovative, outside-the-box, presentation: Ge Wang of SMULE (Sonic Mule) and his presentation including recordings of the Stanford Mobile Phone Orchestra (MoPhO). Become your own iPhone musician by breathing gently into the iPhone’s mic using their Ocarina iPhone application (warning: small fee $0.99).
• Most outstanding announcements: three offerings that open up new user experience opportunities in a Voice 2.0 world (Yes, I already blogged about these but they still stand out as winners for both the service providers and end users.)
  • Voxeo: Tropo.com opens up the Voxeo platform,  previously limited to the small population of voice developers, to hundreds of thousands of web developers.
  • Skype: making the superwideband SILK codec available royalty-free to any relevant hardware or software vendor that wants to bring new user experiences to voice calling.
  • Jaduka: the appointment of Thomas Howe as CEO will accelerate the adoption of voice into existing business processes, eliminating the error-prone mundane while opening up new standards for applications such as healthcare procedures, customer satisfaction and service deployment.
• Other presentations of note:
  • Martin Geddes, Head of Strategy, BT: there is value in addressing issues of efficiency and effectiveness inherent to business processes. Martin proposes that the key business model is to satisfy the needs of parties who want to interact with customers; for instance, improve the productivity of call center employees
  • Shai Berger, Fonolo, whose deep dialing service has now mapped out the IVR trees of over 500 companies and presents new opportunities for customer service operations.
  • Mobivox, expanding their voice-activated mobile services platform with their CRM for Voice business tools.
  • iNum, announcing support for IM and presence, initially with Google Talk
  • Alan Duric continues to see ongoing profitability and success at Norwegian service provider Telio. Why? a continuous stream of innovation and new value-added services.
• Some themes and issues across multiple presentations:
  • Spectrum 2.0: several presentations and a panel covering issues related to (the lack of) spectrum management and “white space”. In major markets over 90% of available spectrum remains unutilized.
  • Regulatory issues: the challenge of creating and executing a user-oriented regulatory framework under “the first technology administration”. Network neutrality: is it more a “buzz phrase” than a real issue? Seeding the policy makers with players who understand regulatory issues from both an innovation and business opportunity orientation as opposed to supporting monopolies or duopolies. Aligning regulation with the application potential of emerging communications technology.
  • API’s: several presentations from vendors who provide free API’s that support third party developers in writing applications that are then hosted by the vendor: IfByPhone, Voxeo, Jaduka, Ribbit, Adhearsion (whose Jay Phillips, right, provided a tutorial incorporating programming to Skype for Asterisk),

One note: there were a lot of innovators and forward thinking people amongst both the speakers and the audience. Most interesting was that there were at least six attendees from carriers who were asking the questions about how carriers can adapt to this emerging communications world: SaskTel (2), T-Mobile US, Rogers, NTT. eComm’s biggest challenge for next year will be to attract a larger audience of carrier personnel. In personal conversations I learned a lot about their issues that may work its way into future commentary.

Overall, eComm 2009 once again provided a primer in a wide range of aspects of the emerging communications space. With Thomas Howe leading Jaduka’s CEBP charge into larger enterprises, Voxeo addressing a huge community of web developers, Skype offering new levels of call quality to the entire communications hardware and software community, Fonolo solving that PITA known as punching your way through company IVR systems and Calliflower offering new user experiences in conference calls, the next few months will prove most interesting. Most challenging to observe will be how these technologies and services assist business and personal issues in times of a most challenging overall economy.

Timothy Hay, Wall Street Journal wrote up Jon Arnold’s panel on “New Ways to Monetize Voice” : VoIP Start-Ups Scramble To Find Niche (subscription may be required)

Alec Saunders: eComm – strong stuff

Tomorrow morning I’ll be heading out to San Francisco for eComm 2009. Kudos to organizer Lee Dryburgh, who on his own initiative and at his own personal risk, launched this event last year. Late last week Lee was able to announce that registrations had surpassed last year’s attendance.

Attendees should come away with not only a much better understanding of how this will be a watershed year for telecommunications. The combination of shaky economies, emerging Voice 2.0 offerings and opportunities for more effective personal and business communications is creating a “Perfect Storm” for a watershed year in the communications space. Smartphones, video calling, collaboration services, communications enhanced business processes, communications infrastructure, business models and regulatory issues will all be on the menu. From the eComm press release last week:

Included among the dozen keynote speakers and scores of other presenters over the three days of eComm2009 are:

•    Ge Wang, assistant professor at Stanford University and co-founder, CTO and chief creative officer of Smule.com;
•    Jonathan Christensen, general manager for audio and video at Skype;
•    John Forsyth, vice president of strategy at Symbian;
•    Malcolm Matson, founder of the OPLAN Foundation and entrepreneur;
•    Michael Calabrese, vice president, and Sascha Meinrath, research director, both of the wireless future program at the New America Foundation;
•    Tony Jebara, co-founder and chief scientist at Sense Networks and assistant professor of computer science at Columbia University;
•    Media futurist Gerd Leonhard;
•    Richard Whitt, telecommunications and media counsel for Google in Washington, D.C.;
•    Martin Geddes, head of strategy at BT Design;
•    Benjamin Joffe, founder and CEO of +8*;
•   Mark Rolston, chief creative officer of Frog Design.

Sponsors include Skype, MetaSwitch, NEC Sphere, Voxbone, Global IP Solutions, Voxeo, Jaduka, Ribbit and Broadsoft.

I have already been approached by some companies for interviews (although with full days through to 9 p.m., scheduling interviews may be a challenge) and been made aware of announcements coming from Skype, Voxeo and Jaduka. I’m sure there will be others; it will be a most interesting week.

As Lee says at the end of the press release:

Those wishing to register online may do so at  http://www.amiando.com/ecomm2009.html. For an additional $100, attendees may register on site.

And by entering the promotional code “one touch”, you’ll get a 20% discount courtesy of Voice On The Web.

P.S. – Given that there are many these days in need of social assistance, whether food, shelter or otherwise, Lee has announced that “10% of any profit from the event will be given back to the local community by donating it to the Shelter Network (http://www.shelternetwork.org)”, a Bay Area non-profit undertaking that assists families and individuals with housing issues. Lee has personally guaranteed a minimum $2,000 donation and undertook an interesting social networking experiment to help raise additional funds.

Last day to register today for Regular Pricing; Late pricing applies for registrations after Feb.17, 2009. Enter “one touch” for a 20% discount.

Two weeks ago eComm 2009 organizer Lee Dryburgh observed that:

With the heavy backdrop of economic doom and gloom everywhere I’d been finding it ever more strange that virtually every company I was dealing with in relation to the 2009 conference, was reporting accelerating business let alone [as opposed to] flat or declining business.

Via a Skype multi-party call he held a virtual panel discussion involving:

• Jonathan Christensen (Skype)
• Irv Shaprio (IfByPhone)
• Rodrigue Ullens (Voxbone)
• Graham Brierton (Voicesage)on this topic.

When asked about today’s economy he repeatedly found eComm 2009’s sponsors saying “Oh no, we’re actually doing better, due to the downturn”. So he asked each of the panelists what their offering was doing such as to accelerate their business.

Graham Brierton (VoiceSage):

For example, we had a company that the key thing they wanted to do was bring in their debts cheaper and quicker, instead of reminding people to pay their bills.  Part of the paying the bill process was transferring them back into a call center to actually collect the money.  What we noticed when we analyzed the data was they were getting a hell of a lot of people that were wanting to pay between 3:55 p.m. and 4:05 p.m.  We still don’t know the reason why there is a peak at that point, but there is a peak at that point.

One of the issues that these guys had was that they couldn’t actually take all of those calls because they had a shift change at 4:00 p.m.  They were unaware that because they had a shift change there were a lot of people that wanted to engage in a process with them but they weren’t allowing it because of their internal business processes.  They actually changed that.  That came as a direct result of simply looking at the data generated from the interactions that their customers were having with us, and us trying to collect money from them.

Irv Shapiro (IfByPhone):

Batteries Plus is a franchise-based business in the United States and Canada that has hundreds of retail stores that sell only batteries.  If you need a battery for anything, you go into Batteries Plus or you go to their website and you can purchase a battery.

In many, many cases, people need a battery right away so they want to go to a store.  Batteries Plus was finding that they were fielding hundreds and hundreds of phone calls to stores asking for routine information such as “What are your hours of operation; which is the closest store to my address…?”  We automated that process for them.

In fact, they automated it themselves by going to our website, provisioning a toll-free number, putting in a IVR on the front end that asked a couple of very simple questions to determine whether the customer was looking for information about batteries.  In that case, the call was transferred to a central call center corporate.  Were they looking for the closest location, in which a geo-coded application automatically provided them with the closest location and driving information.  If they were looking for store hours of operation, same geo-code process except in this case we retrieved the hours of operation.

They found a dramatic increase in the productivity of their in-store personnel because now those personnel could concentrate on spending time with customers in the store.  The side effect of that is they sell more batteries.

Rod Ullens (Voxbone), who reported business growing at 15% per month:

At some point, they [cloud based services such as VoiceSage and IfByPhone] need to reach the PSTN.  Most of them actually need a telephone number to be activated.  The bigger they get, the bigger we get.  That’s already one reason.  It’s not necessarily because of us, but because of our customers that have services that are interesting, and we grow with them.

If you look at the way numbers were used in the past, where you had a telephone number that was just linked to a physical location, that’s all you can do with it.  The cost to dial such a number is pretty expensive.  What we’ve done is to just completely take away the geographical link.  Now a number is just a software-based identifier that people can use to call you on.  It’s very flexible.  You can just build up a service.

First of all, that service can be completely Internet based.  You can just use telephone numbers from Voxbone to make it reachable from traditional phone networks, from mobile phones and so on.  Basically, you can be a company and have a virtual presence in a lot of countries.  From day one, you can start a service provider, in forty-five countries.  I think that’s one major reason why we’ve grown, especially now.

Jonathan Christensen (GM Audio and Video Platforms, Skype), in response to Lee’s question: “What do you think is driving these minutes?  Is it businesses using Skype, for a change, in order to save money, for example?”

We’re seeing two things.  One is just consumer migration to value; people want to avoid long distance, but we also see in the consumer space a network effect around your friends being there, the quality being great, it being convenient and easy.  We have a large constituency of people where it is the convenience, free, and easy factor.

On the business side, Gartner, for example, recently said they kind of backed off their position that Skype is dangerous, evil, and will introduce Trojans into your network, and so on.  We hear; we have a bunch of case studies and we hear more and more from corporate IT, these commandments to their workforce saying, “When you’re travelling, when you’re making long distance calls, when you’re going to be faced with insane roaming charges, please try to use Skype.  It works, it’s easy, you can download it, it’s free”.  We are seeing acceleration in that sector, as well.

These are snippets from the discussion; Lee has transcribed the entire session in a eComm 2009 blog post.

Note that while all the participants in this call will be presenting, Jonathan Christensen will be delivering a keynote presentation: “Codec Evolution and Industry Proposal” along with a Skype announcement.

Bottom line: if you’re looking for value in communications services that drive business decisions, if you want to be a player in the emerging communications space, eComm 2009 provides the best opportunity to get a three day education in how the Voice 2.0 world will evolve. It’s an opportunity to network with the thinkers and business leaders who will be providing services for that market space. That’s why I’ve convinced a friend who is a 34-year veteran in the Canadian telecomm market to come; he wants his new consultancy to have relevance going forward.

Register here; enter “one touch” to get a 20% discount. Speakers. Schedule.

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At VON Canada 2005 I first met Stuart Henshall, the founder of Skype Journal; this Canadian VON event attracted bloggers from across North America. It was the only North American opportunity to hear Skype founder Nicklas Zennstrom personally while he was in legal limbo in the U.S. Later that year I was asked to write a couple of posts for Skype Journal; effectively Stuart had seen my personnel post about Skype’s newly launched email toolbar for which I had been a beta tester and asked if he could post it on Skype Journal.

The following April when VON Canada held its third (and last) show in Toronto, I had just completed a client business development assignment and was asked to blog on behalf of Skype Journal. Stefan Oberg, Skype’s current Vice-President for Business, spoke about Skype’s goal to be “Better than a phone…”. Today, with the SILK codec, Skype is much better than a phone; since its introduction I cringe politely when I have to go back to normal phone conversations.

But, more importantly, since then I have had a wonderful opportunity to meet many keen and passionate Skype employees, develop an understanding of what it takes to be a Skype Partner – especially with business applications — and participated with a network of great bloggers who all contribute to a better understanding of the business and technology issues of the emerging communications world.

Yes, there have been challenges; Skype has had to reorganize and restructure as a viable and growing business. Several players have attempted to get into the real time communications space; they need to find their niche and attract users and develop revenue streams. But, when I look at the outcome of the past three years in this space, Skype remains a strong player; it has become synonymous with disrupting communications barriers around the world at little or no cost.

New services have evolved; small businesses can enjoy the advantages of services that were previously only available to large enterprises.16 million users online concurrently every day around 2:00 p.m. EST (GMT-5) is half the population of Canada. And there are probably 30 to 40 million who use Skype daily with about 30% in business applications. Free video calling has become a reality.

But over the past eighteen months:

• Skype’s business application partners are looking for ways to have third party support marketing their leading edge services
• Other significant players have come into the real time emerging communications space offering a range of unique products and services
• Cell phones have evolved into smartphones
• Social media keeps everyone informed in real time about news, personal activities and individual opinions
• It’s the year of the Voice 2.0 world.
• WordPress has become the most powerful platform for not only blogging but also complete websites.
• Search has become a key tool in developing a significant web presence

As a result today I am launching a new website Voice On The Web – facilitating personal and business communications across a Voice 2.0 world. Check out my initial post for more details about the goals and objectives I hope to achieve. Note that all my Skype Journal posts are archived there and readily searchable. There’s still lots of warts on the site but one has to start somewhere.

At the same time Phil Wolff will continue to blog on Skype Journal, continuing to bring his perspective on the technology and business opportunities in the Voice 2.0 world. I will be providing him link love frequently for posts I feel should be checked out.

Time to move on… see you at Voice On The Web. And, thanks to Phil for the opportunity to participate on Skype Journal over the past three years.

At CES 2009 COO Scott Durchslag spoke about “liquid communications” and “Skype Wherever, Whenever”. InnerPass has developed a business-class hosted document management system; they have been marketing it via private label to over 3000 businesses or project teams on several continents.Over the past year the InnerPass team has developed a Skype Extra application that introduces real time communications, and serves as an interface, into this system.  From their website:

InnerPass helps companies control their business critical files from anywhere and anytime. Our applications are delivered thru various Software as a Service (SaaS) offerings that are entirely web-based. InnerPass primarily offers its applications to end users through a network of partners who can private label and embed the software service into their own solutions or provide as a stand alone service.

InnerPass Share and Collaborate Home Page

InnerPass starts out its communications enhanced service, called InnerPass Share and Collaborate, by building persistent document “meeting rooms” that store mission critical documents such as FDA filings, engineering and architectural drawings, legal agreements, real estate papers and other business documents which require:

• access across a geographically dispersed team of project stakeholders
• persistent storage for asynchronous 24/7/365 access
• version management

amongst other features. InnerPass has taken their document management service experience and gone a step further to support file sharing, collaboration and real time communications. They embed, within their own Skype Extra client, the ability to launch and hold real time voice and/or chat conversations, whether informal ad hoc sessions or scheduled conference calls, to discuss the underlying projects, sales meetings or other business team activity.

Using InnerPass Share and Collaborate, a user can set up a “meeting room”, store documents, launch conversations and share a designated screen for presentations or demonstrations. The room’s host can designate and invite team members from amongst his/her Skype contact list, grant permission to their team members to contribute or modify room content. From anywhere in the client, any team member has the ability to schedule and launch conference calls or group chats using the integrated Skype services.

InnerPass offers three levels of their collaboration service. A free service supports up to 3 meeting rooms with a maximum of 3 participants and 1GB of file storage (max 25MB per file). Offering perpetual file storage, the Professional Plan at $4.95/month supports 10 meeting rooms and up to 10 participants in each. The Business plan, at $12.95/month, allows up to 40 rooms and 40 people per room. Their last plan, launching in March,  is designed for the SMB (Small to Medium Size Business) will offer additional features including access to their hosted full document management service. Update (May 2009): Inner Pass also offers a “Custom” service with the potential to host a webinar with hundreds of attendees, record calls and other features.

Over the past few weeks I have experienced a few sessions using InnerPass; the InnerPass  team has been very responsive to suggestions made for improvements, especially with respect to some speed issues that are now resolved. It now works reliably with both Skype 3.8 (still Skype’s latest release for general use) and Skype 4.0 Beta 3.

Since obtaining Skype Certification and its subsequent launch last fall, InnerPass has registered over 270,000 users (as shown in the graphic) growing virally amongst Skype users with little publicity. You can download via Tools | Do More | Get Skype Extras using Skype 3.8 or Tools | Extras | Get Skype Extras under Skype 4.0 for Windows beta 3. Normally it should show up as “InnerPass Share and Collaborate” under the “Sharing” category but until a bug is resolved by the Skype Extras team, you may find it as “Share, Collaborate, Communicate”.

InnerPass CEO Steve Parsloe has written a more detailed post for Skype’s Autumn 2008 Developer Newsletter. And in early December Steve along with his colleague Bill Trail, Vice-President, Business Development discussed InnerPass as a guest on SquawkBox.

As mentioned at the beginning, InnerPass’s Share and Collaborate service is a representative example of making Skype available anywhere there is an opportunity to benefit from real time conversations. Skype has enabled InnerPass to offer real time conversations to virtual meeting rooms incorporating file and desktop (or screen) sharing. And it brings large enterprise services down to a cost level such that any individual, mobile professional or small business can afford to benefit from a collaborative document management service.

Tags: InnerPass, Skype Extras, collaboration, file sharing, Skype, Steve Parsloe

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CalliFlower: iotum rebrands its Free Conference Call service with a focus on a rich user experience not only for conference call moderators but also for participants.

Value-add in the Web 2.0 world comes primarily through the user interface. There’s a plethora of great technology innovation happening out there. But it’s becoming acknowledged that ease of installation, implementation and operation has been one reason for many services’ success to date, including Skype’s. Yet with only 30-35 million “Real users” out of 300 million registered accounts, Skype has embarked on a new beta program designed to improve on the user experience and ongoing adoption rate for both new users and power users. In the end it’s viral user adoption that builds a business.

Last fall iotum launched its Free Conference Call for Facebook service; over the intervening months, participants on iotum’s daily Squawk Box conference call, using their Free Conference Call service, have seen the evolution of a user interface that has set a standard for enriched conferencing services. While the host or moderator tools have established call recording, participant management and a comprehensive invitation process as basic requirements for any complete multi-party virtual meeting, it is the interactive participant interface that has made Free Conference Call popular with not only the regular attendees of Squawk Box but have also found Free Conference Call being used for other series of regular Special Interest Conference Call events.

But Free Conference Call initially required you to be a member of Facebook; later a separate web-based user interface, independent of Facebook, was introduced to allow participation and hosting outside Facebook. On the participant interface itself we started to see pictures of all the attendees if fewer than 20 participants are in a call; otherwise there is a text indicator. Hand raising, muting and a chat wall all made the calls a richer, more vibrant yet still manageably spontaneous experience. And the calls are stored in perpetuity for later recall. Oh, and, other than being an Unlimited Skype user, I have never paid a cent to attend these Squawk Box calls. (Seven years ago I was paying $200 for a five party, one hour conference call.) Conference calls are as much about organizing, moderating and archiving as they are about the actual call connection.

And, with over 200,000 registered users, iotum learned:

• the need to focus on the participant experience as much as on the moderator experience
• participants valued the rich user experience
• every participant is a potential organizer or moderator
• its most active users were small business entrepreneurs

Building on this feedback and introducing additional features, iotum took on a mission to reinvent business conversations. Today iotum launches the beta of its rebranded conference call service, Calliflower, with two user interfaces – one for the moderator and one for the participants – that deliver an even richer user experience. A interactive dashboard for call moderators, calendar integration, a selection of call-in options and an interactive chat wall all contribute to establishing a new benchmark for a complete conference call experience.

Calliflower is targeted for small businesses who wish to conduct a more interactive and complete conference call experience for both the moderator and the participants. Their longer term goal is to have “open access” via any social network or any device. Yesterday I saw a demonstration of the service running through the iPhone browser but they are still working on the adaptation to the iPhone format. Certainly Nokia and Blackberry smartphones are also in their sights, provided they have appropriate advanced browser support.

But most importantly, iotum has demonstrated that an engaging, interactive, yet simple user interface is key to mass adoption of Voice 2.0 services. It’s also a business fundamental being encountered by other service providers, such as Skype and the revamped SightSpeed for Business about which I’ll be posting in the next few days.

Try out a demonstration of CalliFlower here; or sign up and organize your own CalliFlower conference call here. If you have a Facebook account, you can use your Facebook login information. You can access CalliFlower conference calls via SkypeOut; if you have a Skype Unlimited plan that includes either North America or France, that connection comes at no additional charge..

This morning Squawk Box turned the tables. Adam Somer acted as a guest host and interviewed Alec Saunders and Howard Thaw of iotum about the new CalliFlower service and their experiences leading up to its launch. Alec is putting up a recording of the call here (awaiting posting); listen in for more information.

Tags: iotum, Free Conference Call, Calliflower, SkypeOut, Squawk Box, Facebook

The past week has provided an opportunity for all the nay-sayers and pessimists to say “I told you so”. But many bloggers have followed on Jeff Pulver’s lead with I Come to Praise Skype, not to Bury Them. Alec Saunders: Stop Wringing Your Hands. Skype is a Huge Success:

No, Skype isn’t a failure. By most definitions it’s a roaring success. The failure was EBay’s when they paid so handsomely for a business that was dedicated to sucking the profits out of a bloated telecom industry. Skype’s business plan was to take less money from consumers than a telco would for the same services. What were they expecting? What Skype hasn’t done is live up to its potential. The platform which many hoped would emerge from the momentum of Skype — the Voice 2.0 ideal of voice as an element in all applications — appears to have been sublimated to the needs of EBay’s balance sheet. The potential for Skype to utterly dominate voice in this new world has not yet been realized.

There’s still time. Nobody else has come close to what they’ve accomplished.

Over the past week I have also spoken with several Skype Partners; they all can only talk about the potential of Skype. I have to say, that due to the entrepreneurship shown by these partners, the Voice 2.0 ideal is being demonstrated in practice. Yes, they may be Skype versions of some legacy applications; however, Skype makes them even more useful and cost effective as applications. Best example: OnState’s Call Center virtually eliminates the need for a six figure PBX in order to operate a call center. And it provides an additional mode of communication with its unique chat capabilities. Three collaboration tools (my series will continue later this week); a voice conferencing app that handles up to 500 participants; Skype utilities (Pamela, Skylook) for logging and archiving in depth your Skype activities and a voice hosting service are all contributing to the Voice 2.0 ideal. And Paul Amery has done an excellent job of leading the Skype Developer Partner program while still recognizing there’s still a long road ahead to make it totally successful. The recent Skype Mashup contest demonstrated developer enthusiasm for incorporating Skype services into new applications.

Ken Camp, one of Skype’s most frequent critics, in “Comments from the Blogging World on Skype” sums it up with (typos corrected):

Overall, I think the community at large is still waiting to see what happens. There have been times I have not been a fan of Skype at all. That said, I want to see them succeed. I want to see them thrive more than they ever have. And like others, I’m optimistic that under the right leadership, Skype can set the bar far higher than they ever have before.

Thanks, Ken. Enough said….

Now that we are through the Canadian Thanksgiving holiday my Skype Primer series will continue later this week also.

Tags: Skype, Jeff Pulver, Alec Saunders, Ken Camp, Paul Amery, Skype Developer Program, OnState, Pamela, Skylook, Evoca, Convenos, Unyte, Yugma

Over the past three weeks I have had the opportunity to attend the Skype sessions at the eBay-Skype Developers Conference, to meet with and/or interview several Skype Software Business Solution Partners (product reviews forthcoming), and to spend a day at eBay Live – especially in the exhibit area.

Out in the blogosphere, especially via posts from the mesh 2007 and Enterprise 2.0 conferences, we have also seen a few observations about how social networking tools and, in particular, Skype, are penetrating the small enterprise market. The combination of these activities has helped bring into clearer focus what it takes to be a successful Skype Business Solution Partner, not from a technology perspective, but rather an approach to building a sustainable business.

First and foremost – bring along some experience in a vertical market or solution:

• Unyte has been providing desktop sharing services for several years;
• Real Allusion brings expertise in graphic enhancement and animation to Crazy Talk
• The OnState team brings over twenty years’ experience in developing successful Call Center solutions to its OnState ACD product,
• VAPPS brings carrier grade conferencing technology and experience to HighSpeedConferencing.com
• The Convenos team brings several years’ experience in building virtual meeting solutions
• Evoca had been developing a call recording, messaging and transcription web service business around any telephony service for academics, media companies and political campaigns

Second: Be prepared to be a persistent, patient pioneer.

• The Unyte story, initially presented here in an interview with Unyte’s CTO, Gershon Goren , but also articulated so well by Unyte’s CEO Lou Guercia at the Skype “Concepts to Cash” presentation, describes how the Unyte developer team had to work with Skype personnel as both the API set and the developer program evolved over the past two plus years.
• But I also heard about how incorporating Skype into Evoca’s product offering required supportive assistance from Skype personnel to bring on board the first web service involving Skype.
• The OnState ACD solution required patience until Skype could offer full call transfer capability; in the interim they built a Skype chat solution accessible from any website.

The evolution to the current Skype Software Developer Program removes some of the obstacles encountered by these pioneers; on the other hand they have been trail blazers contributing towards what is offered today.

• But the most important advice comes from Dick Schiferli at Pamela: “Nurture your Skype relationship and maintain an appropriate level of engagement by building good lines of two-way communication with Skype”.
• And don’t forget about Skype Software certification whose goal is to provide standards for quality assuance. As of July 2, Skype Software Certification will be required to become a Skype Partner.

Third: Ensure you have a value add product or service, not simply a feature

As an example consider Call Recording: Three partner products involve Call Recording: Pamela, Skylook and Evoca. In addition, Skype offers its own voice mail service but it’s simply that – voice mail with no PC access via MP3 files or other enhancements.

However, when you dig deeper you will find that call recording is a feature within each of these products/services. It is the value add proposition incorporating the call recording feature that differentiates each of the offerings. For instance:

• Pamela offers (MP3) call recording/voice mail as one feature of a set of personal assistant utilities that enhance your overall Skype experience;
• Skylook logs call recordings/voice mails into Outlook for individual PC archival purposes, integrated along with archiving of chat messages and call history within Outlook. In fact, with Skylook, you can manage all your Skype real time communications activity from Outlook and leave the Skype client in the System Tray
• Evoca offers online archiving with web access and RSS feeds for website, weblog and podcast reference along with transcription and translation services but no voice mail service.

And if you investigate the respective pricing models for each, you will find they represent various approaches to providing business-driven value-add.

Fourth: follow Lou’s Rules. From Lou Guercia’s presentation at the “Concepts to Cash” seminar:

• Rule #1: Develop a product that you’d like to use with Skype .. Something that enhances the user experience.
• Rule #2: Don’t forget Rule #1 (when you get into the actual development cycle)
• Rule #3: Keep It Simple Stupid (make implementation and operation intuitive)
• Rule #4: Offer free and paid solutions
• Rule #5: (not stated but implicit in his presentation) Bring your solution to Skype’s global user base in a way that requires no (or minimal) real-time tech support

Fifth: Use Web 2.0 tools and social networking to build your customer base:

While traditional SMB marketing programs will certainly bring results, a profitable business model for selling Skype Partner software involves leveraging Web 2.0 tools wherever feasible. Social networking has become a key business tool:

• From Alec Saunders’ Enterprise 2.0 Reflections: We’re onto something BIG!:

… the business of being an enterprise solution provider just got a lot harder. Over and over we heard repeated that the young bring their own networks and applications to business. And because these are mostly web based applications, not much can be done to contain them. Within a short period of time, we should expect millions upon millions of GMail, Facebook, and Skype users within every enterprise globally.

• Unyte grew its registered user base from 250,000 to 500,000 in six months simply through the visibility provided by Skype Extras
• “Staff increasingly dictating the corporate IT agenda”. This forum entry is consistent with a story I heard while having lunch at eBay Live about a Fortune 500 company that blocked Skype internally but all their field agents use Skype to communicate externally.
• Obtain third party reviews, especially in the blogosphere.

And from several comments heard at the developer conference:

• Employees start using Skype and bring it into the business
• Skype becomes a key communications tool for building business presence worldwide for small to medium businesses
• Business investigates Skype Business Partner Solution and adopts one or more solutions
• According to Unyte, each license drives four more Skype user registrations as the product infiltrates the business’s best practices

Skype’s introduction into (initially small-medium) businesses via products such as Convenos, Unyte and OnState is demonstrating that Skype Partner Solutions will be a primary driver for building the Skype user base going forward. When you hear of 100 license sales for Unyte and 200 to 400 license deals for Convenos, and leverage those into additional Skype user registrations, you start to recognize that business solutions incorporating Skype will become a key differentiator for Skype from other VoIP players and a key driver of new user adoption in what is becoming an otherwise very competitive market space.

Tags: Skype, Skype Software Developer Program, Pamela, Skylook, Unyte, Convenos, OnState, HighSpeedConferencing.com, VAPPS, Skype Extras, Evoca, Real Allusion, Crazy Talk, mesh07, Enterprise 2.0, SaundersLog, Alec Saunders

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Alec Saunders, of iotum, Talk Now and Voice 2.0 Manifesto fame, has written one of his high level overview posts, Aikido, Retreat or War. What’s Your Microsoft Strategy? Alec brings a unique perspective to the table because he has moved from being a program manager within Microsoft when their real time communications strategy was in its infancy several years ago to one who must now find his way in a real time communications space threatened by Microsoft dominance. His key thesis is that, as we transition to a Voice 2.0 world where applications are king, Microsoft, with its software heritage, is best positioned, both culturally and resource-wise, to provide the key infrastructure software for a communications world connected solely by “pipes” with the intelligence at the end points.

Before I could fully understand his thesis, I had to Google Aikido. OK, I’m quite familiar with Judo and Karate, but Aikido? Turns out to be a good choice:

Aikido focuses not on punching or kicking opponents, but rather on using their own energy to gain control of them or to throw them away from you.

O Sensei [the developer of this martial art] emphasized the moral and spiritual aspects of this art, placing great weight on the development of harmony and peace. “The Way of Harmony of the Spirit” is one way that “Aikido” may be translated into English.

Having spoken earlier this week with Kyle Marsh, Microsoft’s Unified Communications program manager, Alec outlines how Microsoft is quietly but gradually building itself to become a key infrastructure player in the real time communications space. Not only within the enterprise sector but also in the embedded and mobile sectors. (Andy does like to remind us occasionally that Cisco and Microsoft are at odds.) Alec then goes on to outline three alternative strategies to avoid becoming roadkill in this environment:

• Aikido: launching a complementary business that’s “in harmony” with Microsoft yet leverages their momentum
• Building vertical market applications, or
• War: being the second or third player in the market.

He then outlines iotum’s Aikido strategy, positioning itself within a gap created by Microsoft’s momentum. As evidenced in practice by Talk Now’s links to, yet independence from, the Blackberry in its role as a key presence infrastructure tool, their Relevance Engine has the potential to become “the central, global presence platform for converged networks”.

So where does Skype enter into this picture? What is their “Microsoft strategy” in this scenario? Skype already provides the basic tools for effective real time conversations; simplicity of implementation and operation is one of its most effective features. As Alec states, Microsoft’s long term game involves Office integration to their communications platforms. We see the beginnings of Skype’s Office integration with its Email Toolbar for Outlook and Office Toolbar. We see Extras partner Netralia’s Skylook now being offered in the Extras Gallery as “MS Outlook Office Integration”. And Pamela 3.5 provides some Outlook integration. Certainly all of these could integrate into a global presence platform that invokes New Presence.

Are these types of offerings that enhance the user experience sufficient for Skype’s prosumer and SMB markets? Or do these markets need the overhead and complexity of Microsoft’s Unified Communications software platforms to achieve their business goals and profitability? Underlying all these considerations is also the need to build an infrastructure that has the five nines (99.999%) reliability of the current PSTN.

While these applications definitely reinforce the role of software in real time communications from another player outside Microsoft, only the evolution of accepted consumer usage and business practices will provide the final answer. As Alec states: “Microsoft’s plan is a 10 to 15 year view of the market, which is only starting to be visible today.”

Alec started his conclusion by quoting a summary statement in my recent Interruption Manifesto and I stick with the statement as a final thought here:

Bottom line: I want to be able to participate in the conversations essential to my lifestyle and my business operations – when, where and how I choose.

A few thoughts as I prepare to head out to Las Vegas this evening. While a 15-year veteran of the former Comdex, this is only my second CES show. But interesting to note how it is approaching the size and popularity that Comdex had in its heyday. While Bill Gates continues to give keynotes, there is, however, one major difference – the news comes out and is propagated worldwide instantly — not primarily by the mainstream press but via independent bloggers who can take a much more vertical approach to presenting a range of perspectives on all the announcements and new offerings. Andy at VoIP Watch talks more extensively on this subject.

As for Skype and VoIP (where V = voice and video), I will be watching for:

• the evolution of Skype phones, including cordless phones, to devices that allow Skype to operate independent of a base PC platform but rather directly via an Ethernet connection to a home router.
• how will Skype migrate to mobile platforms? Can we expect a Skype for Symbian announcement? Has Skype overcome the latency issues that have delayed the introduction of Skype over GSM-associated networks? Have wireless Skype phones addressed some basic product issues? Can they convince more carriers (beyond UK’s 3) that unlimited usage data plans are desirable?
• what is the future for Skype video? is multi-party video conferencing on the road map?
• will we start to see significant numbers of Voice 2.0 applications? will their introduction come as a revolution or evolution?

On the first subject, a few comments: over the past few years we have seen home-based routers go from PC-based “applications” (remember WinGate?) to independent devices such as those supplied by Linksys, D-Link and NetGear; we have seen the access to our TV cable box served best via a dedicated device such as the SlingBox. Is the Skype phone the next major consumer device to operate over IP independent of a multi-tasking PC? Recently I have been able to use Truphone to make low cost international calls over my WiFi connection. What other dedicated-function devices that simply attach to an Ethernet port on the router or connect via WiFi can we expect to see?

P.S. – the latest version of SlingPlayer is giving me superb quality over my home network (with speeds up to 3Mbps) even when full screen on a 1650 x 1080 display.

Tags: Skype, SlingBox, CES2007

Naked Conversations co-author (with Robert Scoble) Shel Israel and American-converted-to-Canadian VC and blogger Rick Segal (and our former Microsoft evangelist when I was at Quarterdeck) are currently traveling through Europe. With an objective of learning about Europeans who have been bitten by the technology development bug, as well as about the integration of technology into European societies,. Shel is planning to write another book, Global Neighborhoods, while Rick may be seeking out new ventures that would complement current ones funded by J.L.Albright Venture Partners.

Yesterday they met with Sten Tamkivi, Skype’s 28-year-old COO learning about Skype’s strategy, vision and operations.

The core of that strategy, according to Sten, is Skype ’s intention to increasingly derive revenue from non-telephony services such as text, SMS and video.

“Very few VOIP services do not compare themselves to Skype.” That means they are positioned to follow not lead. “Skype is more focused on staying ahead by focusing on its own opportunities,” he told us..

Consistent with what we heard at the Voice 2.0 Conference in Ottawa last week, Sten states,

“the biggest threat to Skype today is not being able to develop non-telephony streams of revenue. There is excitement in eating our own revenue streams,”

Other highlights:

• There is a focus is on migrating its telephone services to handheld devices.
• Over the past year, since the eBay acquisition, Skype has doubled its Tallinn-based team to 270, mostly technical, employees.
• The technical talent pool in Estonia, a country of 1.4 million, is getting tapped out; there are some unique challenges in recruiting from outside, especially given its geographical location and history.

Read Shel’s full post to learn about the advantages of operating in a small country and the end of paying for calls by-the-minute. And follow Shel’s travels through his Naked Conversations blog to learn more about how technology is impacting education and European cultures.

Last week’s Voice 2.0 Conference in Ottawa exposed examples across the entire range of infrastructure and services that lead to voice-related applications. Martin Geddes led off with a keynote asking What’s telephone for? What’s the unmet user need? Where’s the money and What’s next? Sam Aparicio of Angel.com provides an excellent commentary on Martin’s presentation ending with Martin’s economic model for Voice 2.0 telephony:

• Martin talks about an inversion of the model. While most of the money was being made once the call was connected, now most of the money is to be made pre- and post-talk.
• Before talking you have devices, connectivity, privacy, presence, availability, directory and integration
• After the call, social networking.
• Google managed to create $400B of market value by exploiting digital social gestures around hyperlinks, but Telcos still fail to see how CDRs are a goldmine.
• Some of the growth areas: B2C (I’m soo glad he mentioned this…), C2B — whenever you cross the trust of a social boundary. An example: In Finland, some people organized a grassroots, non-official Voice Idol type system, creating tons of value for the carriers without much of their involvement.
• Some examples of new thinking: considering a cell phone as a retail outlet you get to carry with you wherever you go.
• In the end, whoever controls the context in which conversations happen. (Following the Starbucks model, where they get to capture the bulk of the value generated by the chain starting at the bush of Juan Valdes). He mentioned how, in the future, when in a hotel, options for room service will be in a buddy list.

One other item Martin pointed out with respect to “post-talk” value was the goldmine available to the service providers in call detail records and communications traffic information.

An vibrant session followed on the role of Open Source as a key Voice 2.0 disruption tool. Jim Van Megellan led us through the evolution of Open Source towards becoming an enterprise grade technology through the development and maturation of Asterisk, the commoditization of hardware (eliminating vendor lock-in while deploying best of class components) and the embedding of PBX capabilities into virtually any device. He sees the challenges of Open Source as:

• complexity
• cost (Open Source is not “free”)
• security, and
• finding new ways of looking at products.

While Open Source contributes to the Voice 2.0 infrastructure and services it was mentioned more than once that we still need to consider Windows integration when it comes to user interfaces and Voice 2.0 clients. Just because it is there! Another eye-opener that came out in Mike Milinkovich’s presentation on the Eclipse Foundation was that vendors of products based on Open Source compete in an environment where over 90% of Linux developers are full time employees in commercial enterprises. Yet they work in cross-vendor Open Source communities co-developing and sharing “stuff that doesn’t matter” when it comes to building basic infrastructure software tools. They define their competitive differentiators around customers’ needs.

In the Alternative Networks session, Bill St.Arnaud described some promising alternatives to wireline, cable and traditional wireless access using fiber for the last mile. But there are still struggles to build appropriate business models that can finance the initial capital costs while maintaining a sustainable ongoing service level. On the other hand, fibre appears to be one of those technologies that, when you see it perform, you have to have it. Martin Geddes talked about post-apocalyptic Europe operating in a highly competitive environment where access, basic service provisioning and content have become totally unbundled — to the point where net neutrality is not an issue. Stephane Monette of Unlimitel talked about “trunking for IP-PBX”, basically hosting PBX services for small-to-medium, geographically challenged businesses. With over 90% of his customers using an Asterisk-based service, he differentiates on QoS and technical support.

In summing up Voice 2.0 is about:

• building infrastructure for social networking, incorporating communication of context, presence and information while building mutual trust relationships
• opening up API’s that allow developers to freely and rapidly build mashups
• energizing Open Source communities that can share basic building blocks
• providing infrastructure for collaborative activities
• creating user interfaces that create passionate users
• mining the Long Tail for new business opportunities

And one final tip from Bill Buxton, Principal Researher at Microsoft and award winning researcher in human-computer interaction: “Voice 2.0 needs to be easier than Voice 1.0″.

Other blog posts with further commentary: Alec Saunders, Ross MacLeod – who did such a great job organizing this event, Ron Lewis. In closing I quote from Ross’s article:

VoIP has become a key trigger to challenging the supremacy of the walled garden; however, on its own it is not sufficient to unleash the potential innovation around voice applications. But, when combined with several maturing technologies including; voice recognition, the Web markup language VoiceXML, and open source telephony, VoIP will enable an avalanche of new voice enhanced Web applications.

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I have just been asked to moderate a Round Table at the Voice 2.0 conference in Ottawa next Monday; Topic: the Future Visions for Telecom. Recently there have appeared three posts that provide a foundation for discussion of the subject:

First, James Enck, a highly respected telecom analyst and blogger, based in London, posted details of his keynote presentation last week, Ten Things I Hate About You, at Telco 2.0 in London James has developed a strategic framework around which he sees the future of telecom:

• Telcos have lost control of their core product
• Voice is becoming a feature, not a service
• Telcos can’t grasp that consumers may not want what they’re being sold
• Telcos thrive on scarcity – future value will be built around abundance
• Command and control culture is dead, open API’s rule
• Telco DNA is fundamentally unsuited to the current dynamics of content
• Telcos expand their footprints physically, not virtually
• Telcos can’t innovate
• Telcos shouldn’t try to innovate
• Maybe the entire foundation is wrong

Definitely a landmark post. So what should the foundation of telecom become? Alec Saunders presents a first anniversary update on his Voice 2.0 Manifesto:

The customer experience predicted by the Voice 2.0 Manifesto is not of a single carrier, but rather of three classes of entities – access, directory, and applications. As a customer, you’ll pay to be part of the network, you may pay for an identity (and this is an idea who’s time will come, although it’s hard to see today), and you’ll pay for applications that that help you communicate in a diverse number of ways. This is a very different model from the traditional, vertically integrated, communications network.

Alec builds cases around several of James’ statements; for instance:

• Unsurprisingly, the biggest stumbling block to the Voice 2.0 vision is the incumbent service provider. Not only do these folks move at glacial speeds, but most regard the Voice 2.0 model as a threat, rather than an opportunity.
• In a Voice 2.0 world, control is with the customer. I buy the services I want, from whom I want.

Finally Robert Young at GigaOM has written a definitive post on the role of communications embedded into social network infrastructures stating that “communications ultimately serves as the anchor feature and the driver of retention and growth”. Robert concludes with:

Social networks, which are rapidly becoming the portals of the next generation, must place high strategic priority on their communications functionality if they wish to continue their pace of traffic growth, usage, and retention.

Three “primer” posts that serve to help us understand the opportunities provided in a Voice 2.0 world. And provide a framework for assessing where the voice communications space will evolve as Skype, AIM Phoneline and similar services become integrated into Web 2.0 and mobile communications offerings. Yesterday Malcolm Geddes (who will be on the panel) summed it up in posting his thought for the day:

Exercise for the reader: is it possible to transition an institution from control to co-creation of value, or can you only build such edifices on greenfield sites? Or to be more blunt and specific, does the journey from Telco 1.0 to Telco 2.0 on average require the capital and goodwill to be split apart and re-cycled via the bankruptcy courts or distressed asset sales?

Update: James was taken aback by the widespread response to publishing his bullets.

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In a previous post I talked about the announcement of the Open AIM PhoneLine initiative and how, as one of their launch partnerships, they will be working with iotum to incorporate iotum’s Relevance Engine call management service into AIM PhoneLine. But there is another story behind the scenes in terms of how iotum and the AOL PhoneLine API development team came together to bring about this service.

Driven initially by its military connections where Halifax, Nova Scotia is Canada’s major east coast naval base as well as home to a major oceanography research center and four universities, Halifax has been a hotbed of Internet technology since the early days of ARPANet. In the late 1980′s one of the navy’s custom software vendors, Software Kinetics, got involved with ARPANet and ended up migrating the technology to open one of Canada’s first Internet Service Providers called NSTN. When the first national Canadian event on the commercial Internet was held in Toronto in early 1994, NSTN was the poster child for what could be accomplished over the Internet; they even had a bookstore making sales worldwide. During the late 1990′s I was consulting for Software Kinetics, visited Halifax many times and came to appreciate that Halifax was an “under-the-radar” mini-hotbed of Internet technology and innovation. So it was no surprise to me when I learned that AOL had setup their AOL PhoneLine development team in Halifax through an acquisition of InfoInteractive who had previously developed some infrastructure software for use with AOL’s services.

This Halifax team has become the core team for development of the API’s and other tools required to expose AIM PhoneLine to third party developers who can the innovate in ways such as mentioned in today’s press release. They are responsible for establishing requirements, design of the API’s and their architecture, call control interfacing, developing certification specifications as well as testing and the accompanying test environments. But Howard Thaw of iotum calls it a “Think Tank for Creativity”. Their criteria for success include:

• make a program that is appealing to developers
• provide rich tools and a higher level of API’s than simply links to protocols
• make the program easy to join and to participate
• make it a platform for innovation while using the AIM PhoneLine infrastructure

Howard explained to me how iotum and the AOL PhoneLine team developed a partnering process. iotum initially explained what they needed; the AOL team explained what they could expose through API’s. The two groups went through some brainstorming sessions and then established specifications for API’s that were broad enough to be used by any development partner. Both parties then developed or modified their software through an iterative process always exchanging experiences and feedback. The entire process also had to involve security and operations issues which, in turn, brought input and feedback from appropriate personnel at the AOL network operations center. Howard mentioned there were some conference calls with as many as 15 people participating. The entire process was especially beneficial to iotum as they were able to contribute input and feedback to the development of the call transfer API functionality fundamental to iotum’s service.

They worked under requirements where there was:

• no tolerance for product defects or not working
• intensive quality control
• a willingness and openness for discussing what makes a good user experience along with a good partner experience for the innovating partner.

Howard sums it up by saying that AOL has created the poster child for the developer experience with AOL PhoneLine. And he gives full marks to David Trueman, the technology team leader at AOL PhoneLine Halifax for pulling it off.

With a goal of providing a demonstration at Fall VON they took about eight weeks to work out the details and process described above. It was then a matter of days required to build the final product and service integration.

More details and background are at Alec Saunders’ post today. Note in particular Alec’s attribution of this program’s achievements to date to AOL VP Ragui Kamel who provided much of the vision and guidance required to champion such a program. Jeff Pulver, who introduced iotum to AOL almost a year ago, provides additional insight:

Kamel’s idea was to find companies who could be part of an ecosystem which he and his team are building around a set of API’s. It’s those API’s that make it easy for developers to be able to leverage and easily reach the AOL installed user base of AIM Instant Messenger users.

What are the implications for Skype?

• First I would make the point that Skype has many partners who have worked successfully with the Skype partner development team. Many presented at the Skype Developer conference in June and many left that conference feeling they knew where Skype was going with its API program over the next six months to year.
• There are many Skype partners demonstrating products at Fall VON next week. Many have highlighted in their invitations for press interviews how they worked with Skype to achieve Skype certification.
• On the other hand, while Lenn Pryor led this team for the past year and took the developer program to its current level of achievement, Skype’s new Development Program Director, Paul Amery, needs to demonstrate through execution his initial commitments to (i) a rich, evolving platform of API’s and supporting components, (ii) a rapid painless route to market and (iii) a responsive support and development program.
• At the Skype Developer Conference in early June the most requested API’s were:
  • a connection to the Skype voice stream; this is available in the Skype API 2.6 beta released a week ago
  • a Naked Skype that would allow the Skype “engine” to be embedded within partner clients
  • call transfer functionality. Announced as coming out for Skype to Skype calls this fall and Skype to PSTN calls in early 2007, this is the key API required such that iotum’s Relevance Engine can be interfaced into Skype but is sought by many other current and potential partners.

While both Skype and AOL recognize the need for Partner programs as a key element of their ecosystems, partners need to offer innovative service offerings which can support a sustainable and growing business by delivering true value-add. The good news for both users and partners is that there are now two recognized players providing opportunities for innovation and enhanced voice-enabled services. The future promises to be interesting with two keen, enthusiastic and passionately committed Development Partner teams in the game. And who would have thought ten years ago that key players delivering leading edge technology today would be in Halifax, Nova Scotia and Tallin, Estonia?

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AOL has a long history of innovation. Initially launched as a proprietary pre-Internet personal communications platform building up to several million users via dialup connections, AOL has evolved its integration into the Internet to the point where it recently broke down its “closed garden” business model and opened up the majority of its content and services to anyone visiting their site. It has certainly gone down a bumpy road with its history of balancing the conflicting needs of innovation against the needs of an operation bureaucracy looking for a profitable business model. At one point it was the poster child for the Bubble 1.0 bust as the business world tried to work out business models to provide a profitable combination of both infrastructure services and (syndicated) content. Breaking down the walled garden is but one example of the direction it is going under new leadership.

Last week there were several posts (Aswath, GigaOm) about the closure of AOL’s TotalTalk, where AOL effectively recognized there is little to gain by playing in the pure legacy telephone replacement game and has decided to abandon it. Earlier this week there were several posts (Jon Arnold, Andy Abramson, Mark Evans) discussing Vonage’s latest quarterly results; the common theme is that Vonage is spending such enormous sums on customer recruitment that there is little hope of profitability in the foreseeable future. Cablecos and legacy telcos offering DSL services have a leg up as they already have a customer base to whom they can market. But Andy at VoIP Watch sums it up best when talking about the demise of AOL Total Talk in his Requiem for the Future of VoIP:

Rather than look at it as a failure, my take on this is AOL really has seen the future sooner than others. Much like the BT announcement earlier this week about their softclient, and like their other online portal player competitors including Yahoo, Google and MSN, AOL’s Voice Team has seen the future of telephony and is moving in that direction with AIM PhoneLine, and the burgeoning ecosystem that already has started to bubble earlier this month at the VoIP Developer’s Conference, and will likely have a big boost at VON in Boston next month.

But unlike Yahoo and MSN who have so many internal battles to fight, AOL as part of Time Warner has leadership that is smart enough to not fight a marketer (Time Warner Cable) who wants to sell a phone 1.0 replacement, and instead is focusing on Phone 2.0 and where it can be.

Today AOL issued a press release outlining their execution on the Voice 2.0 Manifesto through building an ecosystem around their AIM Triton IM client and its AIM PhoneLine service called the Open AIM PhoneLine initiative. AOL will introduce three API’s this fall that will give developers and hardware partners the ability to:

• Personalize the AIM Phoneline service by adding ringback tones and unique ring tones for frequent callers.
• Enable a wide variety of USB devices such as speakerphones and phone adapters that will allow standard cordless phones to initiate and receive calls with the AIM Phoneline service.
• Build new call management functionality into the AIM Phoneline service such as context and relevance-based call handling that could treat each call on the basis of rules that use Caller ID, online presence, calendar activities and more.

AIM PhoneLine provides free inbound numbers and, for a $9.95 per month charge, provides calling out both within North America and internationally on their Unlimited Plan. This is all tied into AIM’s Triton client to provide presence and chat functionality. Using the Open AIM PhoneLine API’s, AOL will be providing demonstrations next week of:

• MyNuMo, an online content community demonstrating ringtones that allow personalization by caller, and
• MVox Technologies, demonstrating their versatile speakerphone technology linked into AIM PhoneLine
• Iotum’s Voice 2.0 call management service using the iotum Relevance Engine

By combining the AOL PhoneLine API’s with iotum’s Relevance Engine, inbound AOL PhoneLine calls can be directed to voice mail or AIM’s Triton client or, if the user has the Unlimited Plan, to the user’s wireless phone. Potential applications include using the service as a second line to home-based businesses to triage incoming calls such that the existing customer base gets priority attention.

This is a break through for iotum in that

1. it becomes their first platform that makes their Relevance Engine available to a broad consumer audience, namely, AIM’s 43 million registered users.
2. they can focus on their core expertise and incorporate it into AOL’s platform that manages the infrastructure issues such as providing phone numbers, call termination and switching.
3. For iotum, it is the first agreement where users can simply extend their current setup to incorporate and experience their Relevance Engine. There is no need to purchase additional equipment, subscribe to an additional service and/or write interfacing software (such as with their PhoneGnome or Asterisk implementations).
4. AOL will promote its partners’ applications and devices at an on online store that users can access by simply clicking the “Shop” link off of the AIM Phoneline dashboard.

In an interview with Alec Saunders, iotum’s CEO and author of the Voice 2.0 Manifesto, he made the following points:

• AOL wants to create a community of innovation by opening up appropriate API’s to developers. For instance, opening up API”s to PhoneLine’s switching infrastructure allows iotum to handle call transfers. This is a feature that Skype has said will only be available in Q1 of 2007.
• Development of call transfer functionality requires not simply creation of an appropriate API but iterative co-operation between the platform vendor (AOL in this case) and the technology team at the partner (iotum) to develop an API specification such that the logistics of call transfer functionality operate in a user friendly manner while meeting the general business process rules for handling call transfer.. In this case iotum worked over the past few months with an AOL developer team in Halifax, Nova Scotia to come up with the relevant API. How this happened will be the subject of a separate post.
• The demonstrations at Fall VON next week are the launch of a startup phase with the final service becoming available by year end.
• While details of a launch marketing plan still need to be worked out, users will be able to subscribe to the service via AOL’s store front; the business model involves revenue sharing with AOL as the conduit responsible for recruiting customers..
• The AOL PhoneLine team has been “a superb partner to work with; they have been responsive; they provide promotional opportunities and they’ve delivered”.

At Fall VON next week I will be looking for examples of execution on the Voice 2.0 Manifesto as it provides the route to sustainable and growing profitability for Telco 2.0. The demonstration of iotum running on AOL Phone Line is certainly one stop I will be making and reporting on.

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With the turbulent migration to VoIP occurring in 2006, it will be interesting to track usage and subscriber data to support the impact of VoIP and Voice 2.0 business models. A couple of items that appeared this week:

Skype vs Vonage in the UK: Heather Hopkins of Hitwise, an online Internet usage monitoring service, has reported on Skype, Bebo and Vonage — Why Skype Visits are Through the Roof. Her chart that results from tracking visits to websites for each demonstrates how UK visits to Skype have climbed from ~1% of UK site visits in early February to 6.9% mid-May while Vonage has stagnated in the 0.8% range. And this happened in a market with no free SkypeOut! Score one for market penetration by a Voice 2.0 business model.

Earlier this week I reported on the $15 million funding of Bebo, a social network with 24 million members predominantly in the European market and Andrew Hansen’s observation as to how Skype support was probably a factor in their financing success. Heather goes on in her post to report on how Bebo is responsible for over 50% of the upstream sources for visits to Skype. And this number has increased with a Bebo-Skype partnership tied into the launch of Skypecasts. A Voice 2.0 application driving adoption and market penetration in the social networking space.

Acknowledgement to Mathew Ingram for the post that brought my attention to Heather’s post through the Comments.

Telus – a legacy Canadian telco in transition: Jon Arnold has posted some numbers provided at the Telus President’s Symposium held last Thursday in Toronto. Telus is the primary (and legacy) telco in Alberta and British Columbia and has a very successful national mobile network in Telus Mobility. They have a reputation for rapidly introducing new technology — they were the first to have an EV-DO offering in major Canadian metropolitan markets; also they went through a strike last summer that was essentially about transitioning labor costs to a level consistent with a Voice 2.0 business model. Telus has continued to be profitable; their stock price has risen over fivefold since mid-2003.

This is the picture of a telco successfully transitioning to a Voice 2.0 model reflecting the value is in applications (as opposed to access and directory) where:

• Talk is the baseline through provision of connectivity and directory services, yet
• The meter is going off — as evidenced by their reduced long distance activity and the reduced reliability on voice for revenues.
• Applications (as evidenced by their increasing reliance on Data and Wireless) are becoming the value creators.