Saturday, December 31, 2005

'Free' voice and why I think Vonage (et al.) is dead

Several people (not just voip bloggers, but 'real' people ;) have been predicting free voice for a little while now - heck Om even predicts it to be ushered in in 2006. While I agree with these people, just not the 'within 2006' part, I have slightly different reasons. Its essentially what they are saying, but they just aren't saying it: we're ditching the expensive, closed network we call the PSTN and migrating to the cheap, open Internet. Its really that simple. We can talk about what company is offering what all they want, but that's all just noise - the signal is ditching the expensive vertical network in favor of the cheap 'flat' (application-wise) network.

We're building networks faster and faster all the time - and voice bandwidth is becoming a mere pittance of what is available today. This renders the transmission of voice traffic extremely cheap on new networks. We are also making the voice application cheaper - rather than expensive cabinets and proprietary software, its cheap servers and open software. Such functionality can easily be made 'free' by a portal company (Yahoo, Google, AOL, MSN, etc.).

We've already established that the bandwidth is next to nothing in the grand scheme of things - so that's not a problem. Now, how do we get free voice - the application? Easy - its the same way we get free email. Its all marketing. Now, I'm certainly not saying we should expect ads in our voice streams - although someone is thinking about it I'm sure (much to our dismay). The solution is this: there will be a day where your primary method of voice contact will not be a number - its will be an address much like an email address: Just slap sip:// or some XML method in front and you're directed to my device (PC, phone, etc.).

Now that our voice contact identifier is consistent with email, that's a hell of a thing for the portal isn't it? A free advertisement for their site in every address passed from user to user. Isn't that advertisement worth something? Worth the cost of some servers and software management? I'll bet it is - just like email is, just like IM is, etc. Bingo - 'free' voice!

Naturally there could be many different ways to charge for cool features, and I'd likely splurge for a few - but basic voice will be free...... one day. In the meantime we still have to deal with the expensive PSTN for many contacts, which is why I don't see it happening too fast. Actually not fast enough. Some are getting all bent about this 'VoIP boom', but I still think its a blip - the boom is yet to come, its coming to kill your voice coffers, and its not coming fast enough. There is no money to be made in simply being a 'phone company' any longer. Which brings me to......

Vonage. A trivia answer that few will get right in 20 years. As you just read about free voice - its all in the address, your contact management. So, why in the world would I want to check multiple sites for my messages? Why maintain multiple accounts at multiple sites? When it comes time for me to choose between my Lingo ID and my Yahoo ID - Yahoo gets my business hands down. Lingo doesn't have the portal - they're dead. Neither does Vonage - they're dead. Broadvoice - dead. Packet8 - dead. Neidermeyer...... OK, you get the point.

Which also brings me to the great Skype hype and why NO ONE should buy a broadband voice company - there's no money in it that you cannot generate yourself! The money is in the portal - don't have one - get one, and fast (Ma and Pa Bell - you listening?). eBay - ya make me laugh son, ya make me laugh. But, at least eBay has a shot at becoming a portal and surviving the debacle. Vonage and others must be green with envy over that deal - their value will diminish, if they are looking for suitors (foolish ones at that) they best get moving and sign the paper before the old folk realize the emperor has no clothes.

And while I'm thinking of it - what made Google trip over themselves and create Gmail? Again, the address is a marketing tool - why create an additional name? Another brand to pump money into achieving brand recognition. That was a major folly. And just when ya thought Google could do no wrong. Sometimes folks just out-think themselves I guess.

So - voice becomes free, Vonage et al. die, and Google isn't perfect. I'm on a roll :)


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