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VoIP: Definitely Not Dead Yet, the Sequel

I don’t usually write sequels to my articles, but this time, it’s warranted. My last column, “VoIP in 2008—I’m Not Dead,” served as a year-end review and, for me, there were a lot of interesting things in 2008 related to VoIP that formed the basis of that article. I did not intend to rattle cages, but it did, and set off a lot of subsequent conversation, primarily in the blogosphere.

So, there are two good reasons right there to do a follow-up piece. First, to draw attention to the fact that many people have strong feelings about VoIP—going both ways—and second, the reality that most of this well-informed conversation is taking place outside the business and tech media spaces. To help balance out this second point, it only makes sense that I revisit the conversation here in the tech media at TMCnet.

Let’s focus now on the blogosphere response. Based on the chain reaction of blog posts that came soon after my column ran, it’s clear that some people are saying good riddance to VoIP and could never understand what all the fuss was about, while others think VoIP is very much alive and well. If I knew the article was going to touch such a live nerve, I probably would have chosen my words and thoughts more carefully. Regardless, I’m pretty sure the same range of reactions would have come if all of this was taking place in the business or tech press, where the conversations are much more public.

Back to the topic. Well, why were some people saying RIP to VoIP as 2008 came to a close? Before answering that, some common ground is needed. VoIP means different things to different people, and this has a lot to do with what’s driving the conversation. For the general population, I would argue that VoIP means Vonage and other similar services. For those a bit more involved, VoIP means Skype or any other form of PC-based telephony. In this context, VoIP is really a service, and a mainstream one at that. On this count, most people will tell you that VoIP is dead, and I would pretty much agree.

I say “pretty much” for a reason. As I said in my last column, these services are still around—Vonage just barely, but Skype is doing just fine, thank you. The fact that the telcos and cablecos have not finished off all these competitors is an interesting aside, but let’s save that for another column. For VoIP competitors—especially Vonage and Skype—the problem is that, in their present state, these services are no longer disruptive, and the rest of the market has caught up. For this reason, the technorati—many of whom are passionate bloggers—don’t find this flavor of VoIP interesting, so it’s dead to them. They’ve moved on to the worlds of 2.0 and 3.0, which is where today’s disruption in VoIP is taking place. I provided several examples of these in my last column.

In that regard, how you define VoIP has a lot to do with whether you think it’s alive or not. On one level, I don’t really care which side you’re on, as I see value in simply getting people talking about VoIP, which hopefully helps us all understand it better. It’s always been a poorly understood term, and for that reason, you don’t see too many service providers calling their VoIP offerings VoIP.

Whether you call VoIP plumbing, a service, an industry or a technology, most people recognize that the heroic strides made by the likes of Vonage back in the early days—circa 2004—have not amounted to much. The telcos are still with us, and as potentially disruptive as these competitors appeared to be at the time, their net impact is negligible in comparison to how mobility has changed the telecom landscape. I’ve always believed that VoIP was large opportunity, but wireless was and is much bigger. End of story.

If you follow the conversations around this topic, you will certainly find people who share my views that VoIP is still alive and well in 2009. It’s just taking a different form. We’re now moving into a world where VoIP has value as an application and an enabler of other services, many of which are Web-based. Whether you’re using mashups, Web services, Unified Communications or Nortel’s Web.Alive virtual collaboration platform, you’re using VoIP. Nobody’s calling it VoIP, nobody’s selling it as VoIP and nobody’s telling you it’s VoIP—you don’t need to know, and you’re probably not interested.

If anything, then, I would argue that VoIP will be with us more than ever before in 2009, but unless you know how IP communications works, you’ll probably have no idea of this. I don’t know about you but, in today’s economy, I’d much rather be quietly alive than noisily dead.

As a coda, I can’t help but add there will also be cases where VoIP does make some noise in 2009, and there’s nothing wrong with that. Since writing my last column, two such instances have occurred—one mainstream and one disruptive. Google is the disruptive one, and last week they announced that i2Telecom’s mobile VoIP application, MyGlobalTalk, is available for download from the Android Marketplace. This capability is comparable to Truphone’s mobile VoIP application for Apple (cited in my last column), and is another example of how VoIP is finding its way in 2009. In both cases, however, note that VoIP is not the star. The noise around this has much more to do with this being a mobile application (as opposed to a landline or PC application), and also being offered by a disruptive competitor, rather than an incumbent mobile operator. VoIP is along for the ride, but it’s really just an application.

The second instance is with Verizon, which also occurred last week. In this case, there was some overeager reporting around the notion that Verizon would phase out its PSTN service in favor of VoIP within the next seven years. That certainly would have been a major coup for VoIP, especially since Verizon had very little success with its VoiceWing VoIP service a few years back. Verizon quickly clarified things, and while this isn’t in their near term plans, they very much intend to make their landline telephony service VoIP-based for FiOS subscribers.

This is still good news for VoIP, but the net result is the same as with the Google example. Whereas VoiceWing was offered as a standalone subscriber service to compete with the likes of Vonage and AT&T’s CallVantage, this flavor of VoIP will simply be packaged within a larger bundle riding on Verizon’s fiber network. VoIP will be there because telephony is sticky, and is the service that Verizon’s reputation has been built on. However, they did not bet the farm on FiOS for VoIP. They built it for video, IPTV and multimedia, and of all the applications FiOS subscribers will be using, VoIP consumes the least amount of bandwidth.

No doubt, VoIP will be very happy to be there, but don’t for a minute think that it will be anything more than an application. Still, I’ll take it, and once all those millions of FiOS households are happily using VoIP (whether they realize it or not), I don’t think too many people out there will keep proclaiming that VoIP is dead. Maybe it’s time to go back and watch Monty Python’s Holy Grail movie again, and then you can drop me a line. I’ll be here.

By Jon Arnold, Principal, J Arnold & Associates

Jon is also co-founder of Intelligent Communications Partners that focuses on the smart grid space.

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