VOIP News

Last week brought news of Verizon’s patent victory over Vonage. Now that people have had a chance to pause and think, they’re figuring out what it all means. An analyst at Ovum thinks that the verdict means that other VoIP service providers like 8×8 or SunRocket will be the next to get letters from Verizon lawyers–and that those letters will now be hard to ignore. Other analysts disagree. Vonage, which says it will appeal, now has an added level of uncertainty it has to address in its marketing; the trouble is, Vonage’s customer acquisition cost is so high now that detractors were already wondering if the company could make it at all. The next step is a court hearing where Verizon will try to get an injunction against Vonage. That happens March 22, right in the middle of Spring VON. There will be a lot of carriers popping Zantac that week.

For more about the Vonage/Verizon fallout:

- read this article in Computer Business Review

- check out this article from Information Week

Related Articles:

Verizon wins Vonage patent fight. Report

Verizon says Vonage infringed. Report

More talk of Vonage going wireless. Report

The CLEC Cordia is launching a VoIP service it’s dubbed Magellan. The Private Magellan service, Cordia CEO Joel Dupre told FierceVoIP, allows customers to set up a phone number in any of 40 countries that will ring in the U.S. or Canada at VoIP rates. Also, the Global Magellan service can allow a caller to dial an existing access number in those 40 countries, enter a PIN, and be connected to a designated phone anywhere in the world. Pricing is a little complicated, and depends on the amount of monthly commitment and the country that calls terminate in. Cordia is a publicly traded company with $50 million in revenue and claims 50,000 customers.

For more about Magellan:

- see Magellan’s website

 A couple of weeks ago I promised to share with our readers some more information on the Samsung OfficeServ 7100, the company’s converged IP PBX for small businesses that soft launched at the beginning of March. At the time, I met with Samsung Business Communications’ director of marketing and business development Ann Irwin, who told me a bit about the latest product offering from Samsung. Well I’ve since received a bit more information on the product, which is set to make its debut on April 19 at the upcoming Graybar technology summit. I asked the Samsung team to describe some of the key benefits of the forthcoming OfficeServ7100 solution, and they echoed their comments from our earlier meeting with regard to simplicity and flexibility. According to Samsung, the primary takeaway is that the smaller end (25 employees and under) of the SMB marketplace finally gets a product designed for them that is affordable, simple, and quick to install, with full converged IP power in a pre-packaged/pre-labeled/pre-programmed system solution. They also pointed out to me that the solution is designed to grow with the user, allowing reuse of all the phone sets and modules, which would allow users to buy the resources they need today and reinvest it in the future when the situation calls for it. I also asked them about their distribution plans for the new product. Here’s what they said: “Samsung’s distribution Plans for the OS7100 will maximize strengths in both direct and two-tier channels, utilizing the wide-scale penetration of our new national distributor Graybar including Graybar’s Call Center, and also Samsung’s current established Regional Distributors. And of course, the 7100 will also be available from Samsung’s Certified Direct Dealers.” Lastly, I’d heard so much about Samsung’s commitment to quality in previous conversations with the company, that I thought I would share some of what I learned. Perhaps the best way to describe their response is to quote two of the company’s leaders. Samsung’s Chairman and CEO, Kun-Hee Lee, proclaimed, “A Defect Is a Cancer.” And, CEO and Vice ChairmanJong-Yong Yun shared Samsung’s secret, “Quality is the conscience of the company. It is the reason for the company’s existence.” Samsung Business Communication Systems, the division managing the OS7100, is committed to providing quality products, just as other company divisions, including displays and cellular have done. Richard Ki Heum Kong, Director Samsung Telecom America, said, “We have designed our product for the SMB market. The modular design enables businesses to invest in the functionality they need today and still have the communications platform to add future resource modules. Traditional voice utilizing TDM or IP data communications or VoIP is supported with a full set of features and applications on both the station and network side. We can interface to a customer provided LAN or offer enterprise class gigabit routing, switching and security on the same platform.”  

If you haven’t seen it yet, TMC has created a Verizon vs. Vonage Comments page, where the industry’s thought leaders are submitting their thoughts on the case and how the ruling might shape the industry in the weeks and months ahead. The most recent comment is from Matthew Schulman, a Regulatory Consultant with REGNUM GROUP, INC., who believes the ruling has far greater implications than the fines levied against Vonage. He recommends that the VoIP industry examines the “benefits of laissez-faire policies” in order to “seek protection from the entities that it initially wanted to avoid.” Schulman fears that this case may have a tremendous impact on the entire telecom industry. To check out Schulman’s full comments and to see what the other industry leaders have to say, check out the Verizon vs Vonage Comments page. And if the spirit so moves you, I invite you to submit your own comments, either via the “Add to this discussion” tool at the bottom of the page, or by sending e-mail directly to me.

 It’s official. As was alluded to yesterday Microsoft will acquire Tellme after all. I’m pasting the full text of the press release I just got from the Microsoft team. Of note: Financial terms were not disclosed.    Microsoft to Acquire Tellme NetworksCombined expertise will bring the power of voice technology to everyday life. REDMOND, Wash. — March 14, 2007 — Microsoft Corp. today announced it will acquire Tellme Networks, Inc., a leading provider of voice services for everyday life, including nationwide directory assistance, enterprise customer service and voice-enabled mobile search. Microsoft and Tellme share a vision around the potential of speech as a way to enable access to information, locate other people and enhance business processes, any time and from any device. Combining Tellme’s talented people and expertise in high-volume voice services with Microsoft’s platform, resources and worldwide customer reach will inspire new and innovative solutions.  “Speech is universal, simple and holds incredible promise as a key interface for computing,” said Steve Ballmer, chief executive officer of Microsoft. “Tellme brings to Microsoft the talent, technology and proven experience in speech that will enable us to deliver a new wave of products and revolutionize human-computer interaction.” Tellme is a leader in voice services for the phone, including its popular mobile search services on 1-800-555-TELL. Founded in 1999, the privately held company answers millions of calls every day for information such as finding local businesses, driving directions, sports scores, stock quotes, weather, news, movie show times and more. Businesses use Tellme’s voice services and platform to provide customers with voice-access services ranging from banking to package tracking. These services are built on Tellme’s voice platform that analyzes caller requests to continually improve the system’s accuracy and overall caller experience. Potential areas of development resulting from the deal will range from hosted voice-enabled customer service solutions that complement Microsoft’s existing unified communications offerings to voice user interfaces in existing Microsoft products to search services on mobile phones that integrate with Live Search for mobile offerings. In addition, developers and partners will be able to build new speech-based solutions on top of a scalable, standards-based voice-enabled applications platform. “We’ve made great strides in speech technologies, but have only scratched the surface of what is possible,” said Jeff Raikes, president of the Microsoft Business Division. “The acquisition of Tellme will bolster Microsoft’s existing speech capabilities, bringing both immediate and longer-term value to our customers and partners.” “Tellme was founded with the idea that anyone should be able to simply say what they want and get it from any device, starting with the phone,” said Mike McCue, co-founder and CEO of Tellme. “Now, with Microsoft, we’ll be able to extend that vision to millions of businesses and consumers around the world.” This acquisition will mark an important step forward in Microsoft’s strategy for delivering software plus services that put people at the center of technology solutions in the office, at home and on the go. For more than a decade, Microsoft has enabled speech, handwriting and touch as forms of natural user input, making computing and digital devices easier to use. Combining Tellme’s technologies with Microsoft’s existing and future products and services will help improve the way people use voice to find, use and share information: Unified communications. Tellme’s voice-enabled services and solutions for enterprise customers complement Microsoft’s unified communications voice services portfolio. This will allow customers and industry partners to build highly scalable voice solutions that leverage rich identity, presence, messaging and application integration. Speech platform. Tellme’s robust voice-enabled platform helps open new doors for Microsoft’s hundreds of thousands of developers and partners to build innovative speech solutions based on open standards.  Mobile services and search. Tellme’s speech expertise and work in mobile search, combined with Microsoft’s innovative local and mobile search offerings, will help take the mobile search usability experience to the next level. Software plus services. In the long term, Tellme technology will enhance Microsoft’s many voice-enabled applications, including the Windows Vista™ operating system, the Microsoft Office system, and mobile applications such as Windows Mobile® and Windows® Automotive. Financial terms of the acquisition were not announced. The deal is expected to be completed in the second quarter of 2007. Tellme, which has more than 320 employees, will continue to operate from its Mountain View, Calif., headquarters as part of the Microsoft Business Division. Following the closing of the acquisition, the Tellme business is expected to be maintained, and members of the Tellme executive team and staff are expected to join Microsoft.  At 9:30 a.m. PDT today, Microsoft and Tellme will hold a teleconference to discuss the acquisition. To participate, U.S. residents can dial (888) 790-3163, and those outside the United States can dial +1 (212) 547-0237. Passcode is 4386031. The call will be available for playback beginning at 11:30 a.m. PDT today through 11:59 p.m. PDT March 23. To access the playback, U.S. residents can dial (866) 376-2435, and those outside the United States can dial +1 (203) 369-0299. Passcode is 93469. About Tellme Through innovation and design, Tellme improves how people and businesses use the phone. By combining Internet data and a voice interface, Tellme radically simplifies how people use the phone to get the information they need every day. Today the company powers billions of calls to hundreds of phone services used by more than 40 million people every month. Some of the applications running on Tellme’s platform include business search on 411, information search on 1-800-555-TELL as well as customer service and ordering for companies like Merrill Lynch, E*TRADE and American Airlines. Headquartered in Mountain View, Calif., Tellme’s goal is to let anyone say what they want and get it, from any phone. About MicrosoftFounded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential. 

Scott Coleman has a new post on his Demystifying Lawful Intercept and CALEA blog today. In today’s entry, Scott answers the question: How Long Do I Get To Implement A Wiretap Request?  Scott discusses the requirements and the expectations that go hand in hand with requesting a wiretap as well as the start & stop dates, the duration of the wiretap, etc… You should definitely check it out. Just a reminder for those VoIP providers who might have their head planted in the sand: The May 14 CALEA compliance deadline for “facilities-based broadband” and “inter-connected VoIP” providers is just around the corner. Only two months remain.

Tellme? Try sell me. The Wall St. Journal is reporting that long-rumored talks of Microsoft purchasing Mountain View, CA-based Tellme Networks might be inching closer to becoming a reality. Tellme, which specializes in Web-based voice by combining Internet data and a voice interface is said to be worth upwards of $800 million to the Redmond giant, which if true, would make it one of the most expensive acquisitions ever carried out by Microsoft. According to Om Malik’s blog, Microsoft is willing to place such a huge bet because the stakes in voice-activated mobile search are so high. Malik refers to a May 2006 quote by Microsoft CEO Steve Ballmer, where Ballmer tells the Wall Street Journal, “The leading edge battleground between us and Google in local search really will come on the phone.” According to Malik, “…on mobile phones the search business is still up for grabs… and  with Windows Mobile growing like crazy… Tellme’s technology could make Windows Mobile phone infinitely more user friendly.” Tellme is led by CEO Mike McCue, who is one of the original founders. Prior to founding Tellme, Mike worked at Netscape as Vice President of Technology. Corporate leadership also includes Sanjeev Agrawal, Tellme’s Vice President of Marketing, who prior to his current gig was the Global Director of Product Marketing at Google. Tellme claims 35–40 million users each month resulting in billions of calls to hundreds of phone services. Some of Tellme’s most recognizable services and customers include 1-800-555-1212; Cingular’s 411 service; 1-800-GOFEDEX; 411 for Verizon home phones; 1-800-DOMINOS; as well as customer service and ordering for companies like Merrill Lynch, E*TRADE and American Airlines.  

The aftershocks of last week’s Verizon court victory over Vonage are still being felt throughout the VoIP industry. Last week, a federal court found that has found that Vonage Holdings Corp. infringed on three key patents owned by Verizon Communications, Inc. An eight-member jury found that Vonage must pay Verizon $58 million in past damages. The jury also declared that Vonage must pay a 5.5 percent royalty rate on any sales going forward. Immediately after the verdict was issued, Verizon requested an injunction that would prevent Vonage from using the technologies covered by the patents. Jan Dawson, VP of the U.S. Enterprise Practice of Ovum believes the lawsuit and the subsequent request for an injunction are designed with an end goal of shutting the Holmdel, NJ-based Vonage down. According to Dawson, “Verizon is asking for an injunction which will effectively close Vonage down, so if that goes through, it would affect any other VoIP provider that has the same technology,” said Dawson. “This case could have a ripple effect across the whole VoIP market. There are lots of other, smaller players who stand to be hit,” he went on, citing in particular 8×8 Inc., the company behind the Packet8 Broadband Phone Service, and SunRocket, Inc., which operates the SunRocket Internet Phone Service. “They are competitors to Vonage and are in line to be affected,” said Dawson. Huw Rees is Vice President of Marketing & Sales at 8×8, parent company of the Packet8 Internet phone service. “Unfortunately, the U.S. jury ruling in favor of Verizon’s patent infringement claims ultimately affects consumers, as large telcos continue to seek out ways to thwart the availability of lower priced, competitive VoIP phone services,” said Rees. “That being said, 8×8 is confident in the defense of its own proprietary technology which has been awarded 66 U.S. patents and remains at the core of our Packet8 residential and business Internet phone service.”  TMC president Rich Tehrani moderated a panel last week at the Voice Peering Forum, and asked representatives from Packet8 and SunRocket their thoughts on the outcome of the lawsuit. According to Rich’s blog, “…the two company representatives said they both think they are not in the same position as Vonage and these patents do not apply to them. They also said there are likely other providers who are going to be liable.” Rich also mentioned that attendees at his session “…seemed to think that many service providers will have to raise prices to compensate for the ‘Verizon tax.’” In another blog entry, Rich poses the question, “how is the consumer benefiting from this lawsuit?” Rich believes that the large carriers are using their wealth and legal might to stifle creative and innovative companies, and he laments the fact that this is a sure sign pointing to the fact that “The United States of America is the third world of telecom.” For their part, Vonage issued a statement following the jury’s decision stating their belief that the company would not be adversely affected by the ruling. In fact, according to the company statement, Vonage “expressed the utmost confidence in the following:” 

• Vonage is not going out of business.
• There will be no loss of service to our customers.
• Our customers will experience no change in their phone service.

 And, in case it wasn’t completely clear, Vonage chairman and chief strategist Jeffrey R. Citron reiterated the sentiment. “We are confident in Vonage’s future health, growth prospects, and longevity,” Citron said. It remains to be seen what will happen. A judge is set to rule on March 23 whether Verizon’s injunction request will be granted.

Alcatel-Lucent announced that Jefferson City, MO-based Lincoln University has deployed Alcatel-Lucent’s higher education solution, for a complete network transformation of its entire campus with the help of two business partners, CT Innovations and Melsernet. Lincoln University’s new converged network includes a full range of voice, data, wireless and security services, supported by a 10 Gigabit backbone to accommodate additional applications and capabilities in the future, such as video conferencing, lectures or learning outside the classroom. This deployment is in keeping with Alcatel-Lucent’s recently articulated message that they intend to continue building their enterprise business with a goal of becoming a “heavier hitter” in the North American enterprise space. This of course includes their historical focus on vertical markets, which includes education. The new network includes over 700 IP phones for staff and faculty, 750 analog ports for students and nearly 3,000 data ports across its campus.  

Nortel announced some big things this week. I was lucky enough to spend some time with Paul Templeton, GM, Enterprise Voice and Sanjeev Gupta director of Nortel’s Ethernet business. Among the things we spoke about was a new version (Release 5) of the CS 1000, which is designed to provide improved reliability and redundancy, enhanced network and voice call security and new E911 capabilities, This new release will deliver unified communications capabilities as part of the Innovative Communications Alliance with Microsoft that was announced last year and built upon this past January. A key feature of the new release is that it will be offered on industry standard hardware platforms such as those offered by IBM and other suppliers. Additionally Nortel announced a new release of the Multimedia Communication Server (MCS) 5100. With this new release, Nortel hopes to improve users’ productivity by offering integration of telephony and multimedia applications within IBM Lotus Notes. The revamped MCS 5100 also features improved and simplified collaboration capabilities and enhanced mobility capabilities designed to provide a rich communications experience for mobile workers. The new MCS 5100 release also introduces support for new SIP-based IP phones. Nortel also announced a new family of Ethernet routing switches designed for businesses that are migrating to VoIP and unified communications. According to Nortel, the new Ethernet Routing Switch (ERS) 2500 and ERS 4500 “…provide the foundation of a unified communications solution by enabling enterprise local area networks (LANs) to intelligently prioritize real-time business communications like voice, video, and multimedia services.”