Friday, October 21, 2005
SkypeBay, VoIP 2.0, Google Wallet and the Telcos
This was followed by a post from Alec Saunders: Voice 2.0: A Manifesto for the Future pointing to his Voice 2.0 Manifesto posted on Iotum’s Simply Relevant blog.
As a follow up to the interview by Whitman Ronan Lipton (MCI) pointed me to Google Rumors on Google Wallet close to launch?
The series ended by an article in the Wall Street Jounal (restricted): Phone, Cable Firms Rein In Consumers' Internet Use.
Let's start with Whitman (some citations):
In a few short years, users can expect to make telephone calls for free, with no per-minute charges, as part of a package of services through which carriers make money on advertising or transaction fees, eBay's chief executive said on Wednesday.
...
The company is betting that by combining electronic markets, online payment systems and Web-based communications, eBay can emerge as a leader in all three businesses.
....
The chairman and chief executive of the world's largest online auction site said the transition to completely free voice communications will not happen in the next year or two, but that could happen in the next three to six years.
"Our belief is that the winner in this space will be those that have the largest ecosystem," Whitman said.
"What I mean by that is: the largest number of registered users, the largest number of voice minutes, the largest number of developers who develop the platform, the best product ... that users are willing and want to pay for."
EBay said it had 168.1 registered users for its online auctions as of the end of September. It had 68.0 million active users who signed on to bid or sell in its electronic marketplace over the past 12 months. It had 86.6 million current accounts on its PayPal payment service, it said.
Alec Saunders in his VoIP 2.0 Manifesto for the Future is taking this further. He starts:We’re witnessing the beginnings of a titanic clash between the internet and the telecommunications industry. My hope is that clash will be the, albeit painful, evolution of Voice into a full blown internet application — the birth of Voice 2.0. Voice 2.0 is the next step from where we are today.
He continues that POTSoIP like Vonage will not be successful.
Some of the headings of his manifesto:
Talk is the baseline
The meter is off
Applications as the value creators
The builing blocks: Presence, Directory, XML
The value networks
Now if you add to Skype/Ebay/Paypal Google with his Wallet and Yahoo! will also soon come up with something, it is clear who will be the new "incumbents" and provide the VoIP 2.0 applications Alex is talking about to the end-users. And Microsoft is lurking.
And what is the reaction of the telcos? They are ranting:
Several large telephone and cable companies are starting to make it harder for consumers to use the Internet for phone calls or swapping video files.
Some of the companies say the users are hogging bandwidth, taking up too much space on networks and slowing down service for all customers that tap the Internet for email, video, music, phone and other services.
Wireless phone companies like Verizon Wireless and Vodafone Group PLC stipulate in their subscription contracts that customers can't use the company's high-speed Web-access networks for Internet calling -- or may prohibit usage in the future. Several cable companies are using technology to cap the speed at which some of their customers can swap videos. A number of equipment companies are selling software and other products designed to block and monitor Internet applications such as phone calls, video and photo downloads.
Many telephone and cable companies have begun to closely monitor the uses of their network with an eye toward controlling activity by users who are swapping movies, TV programs, pornography and other video files. Operators say file sharing is growing so quickly, it threatens to sharply slow down other uses.
and so on and on ...
In essence: phone calls and porns are slowing down the poor other users.
Or is it the 1000:1 disconnect in the access Brough Turner was talking about at the Fall VON 2005 in Boston. For this only the access providers can be blamed. But help is already there, also pointed out by Brough in Boston: give the end-user fiber access to the backbone and the problem is solved once and forever. And the new elephants can finally make their money with their new business models.
To come back to Whitman:
"Our belief is that the winner in this space will be those that have the largest ecosystem," Whitman said.
"What I mean by that is: the largest number of registered users, the largest number of voice minutes, the largest number of developers who develop the platform, the best product ... that users are willing and want to pay for."
EBay, Yahoo!, Google (and lurking Mircosoft), each of them has a much larger ecosystem and capacity to develop the platforms whitman is talking about then even the biggest telcos, not to mention the tiny national telcos.
They cannot compete here, they missed this opportunity, game over.
So either they concentrate at the problem at hand they can solve and where they still can earn money: the access, or also this will be taken away from them by independant fiber providers.
Rich Shockey in an e-mail today in discussion with Alec:
Shockey's Law: Money is the answer, what was the question?
I agree there are three billable items here .. access, directory ( which btw includes naming such as phone numbers and domain names) and applications.
And the integration of full real-time communications into commercial and retail transaction is IMHO the real story here.
What the ROBC's refuse to understand is that they are losing the high margin customers to alternative technologies thus leaving them with commodity services they cant profitibly price.
So we really live in interesting times (Chinese curse for telco employees).
