This $22B Business is Ripe for Disruption!

If I would tell you that the Telephone Industry is about to be disrupted, you would probably think that I am off my rocker, right?

We have seen so much disruption in the last 10 years, VoIP, Skype, Vonage, Whatsapp, Viber etc. etc. It is hard to believe that there is still something is still waiting for change.

Well there is! Stay with me for 2 minutes and I will explain. Almost all businesses have some kind of Switchboard aka as a PBX, Phone System, IVR, or Auto Attendant. In fact there are around 62 million active phone extensions in businesses in the USA alone.

For years businesses have installed a system on their premises. Companies like Panasonic, Tadiran, Avaya, Nortel and LG made tons from selling and servicing these systems.

Then, along came “The Cloud” and companies were told you can now save on your CAPEX, there is no need to buy a box for your phone system anymore. We will put a box in The Cloud for you and you can connect your phones to our box over the internet. Now it is the turn of companies like RingCentral, 8X8, Vonage Business and others to make tons charging businesses $30 a month (and up) per extension for their phone service. RingCentral (NYSE: RNG) is trading at crazy multiples and the landrush is on with new service providers joining the fray every day.

But, there is a catch. These “Cloud” phone companies do not innovate. They put the switchboard boxes in the cloud, but they are still complicated to use and service providers still employ large support staffs. Moreover the cost of customer acquisition is sky high and RingCentral the current leading player is losing over $30m a year.

So what will happen next? Lets look at a few points –

The majority of businesses are still on old “on premise” legacy systems. The “new” cloud systems are complicated to use. Gross Margins (before support expenses) are obscenely high.

The time is ripe for someone to come along and build a phone system for small businesses that is easy to setup, easy to maintain and costs less than the existing solutions.

Stay Tuned. Disruption is coming.

The Network is Dead. Long Live the Telecom API

Believe it or not, some people still buy their phone service, their phones and all their applications from the same company. And it isn’t a small business, the Big Telcos generate billions and billions from this.

In the ole days whoever owned the network owned the customer and had a license to print money. You have to be blind not to realize that this is changing, much faster then we think.

The Cloud, Apps and APIs are no longer buzzwords! They are here today and replacing The Network. A day doesn’t pass without another company announcing that they have published an API. Today it was Rebtel, a long time provider of cheap calls for travelers levitra 20 mg online. Continue reading

Project REBOOT: WebRTC is Definitely For Winners!

While traveling to London for the WebRTC Summit, I read Dave Michels’ post “WebRTC is for losers“. After three very interesting days there, I can not disagree more.

To put my comments in context, lets step back for a moment and remind ourselves what is WebRTC? Do you use the web? Do you need to download anything to read text, view photos, fill out a form, pay with a credit card, chat with a friend? No you don’t. Well five years ago Serge Lachapelle and a few other people asked the question why can’t you communicate with voice & video on the web? Why do you need special clients and/or extensions? Continue reading

Project REBOOT: IP Telephony is exciting again!

When we look back at IP Telephony (or what was called in the ole days – VoIP), we can discern three unique stages. Stage I – the invention and introduction of VoIP services by the likes of Vocaltec, Deltathree etc. Stage II – the launch of Hosted Services by companies like Vonage, Packet 8, Ring Central and of course yours truly. Stage III – is just starting and is truly exciting.

We can define Stage I by calling it the “Pipes Era”, replacing legacy telecom pipes with shiny new VoIP pipes that transport the bits and bytes of our voice from one side of the world to the other at very low cost. Stage II – has become known as the “Cloud Era” where new providers took legacy phone systems and trucked them over to “The Cloud”.

Ok, so we replaced the pipes and removed the boxes from our offices. Bottom line we are talking costs savings and some convenience, but where is the innovation?? Well it is almost here! Continue reading

OK, So Why Do People Immigrate?

Historically, immigration was caused by economic or political reasons. Wars, religious persecution, economic hardships have all been strong factors behind immigration trends over the years.

Surprisingly, over the last decade a new factor has joined the list. Technology is not only changing the way we live, but also where we live! On the forefront of these life changing technologies is IP Telephony (also known as VoIP – voice over Internet Protocol).

Nowhere is this more evident than in the State of Israel. Tens of thousands of new immigrants to the Startup Nation are employed in jobs that would not have existed without VoIP (Which by coincidence, or not, was first invented and patented in Israel). In fact many new immigrants made the decision to move to Israel, based on the knowledge that they would be able to continue their existing job in their new home due to VoIP.

How does this work? We all are familiar how we can see our email from any computer no matter where we are, just by entering our user name and password. Well with VoIP, a telephone number is just like an email address. I can take my VoIP phone and plug it anywhere in the world and calls made to my NY number will ring there. Physically in Timbuktu or Kalamazoo, telephone-wise I am in NY and no one knows otherwise…

Joe Asher is a good example. Joe was a stock market analyst living in Los Angeles with his wife and three kids. Since they finished college, Joe and his wife had dreams of moving to Israel. One day sitting at home during their Sabbath meal, they decided to make the move. “With the kids starting school, it was either now or putting off our dream until we retire”, Joe related.
Today the Asher family lives in Jerusalem, Joe works for a NY investment firm while sitting in a small 2 desk office in Jerusalem. On his phone are two buttons, one for his Israeli number and one for the his USA number.

But VoIP is not only for individuals. Aryeh Freund the CEO of Newtel Systems (a Lawrence, NY based IP Telephony Provider for the SMB market) relates with excitement the story of “1-800-ICE” (not their real name). “It is unbelievable what they are doing. They are disrupting a whole consumer sector back in the states, a sector with a legacy of high pricing, “1-800-ICE” is offering customization, low prices, fast delivery and great customer service, all from their office in a suburb of Tel Aviv!”
Newtel provided “1-800-ICE” with a USA 800 number and customers don’t have a clue that when they call this innovative company they are actually speaking to someone in Israel.

Based on the number of telephone lines that Newtel and other IP Telephony companies are selling to Israeli based companies, success stories like these are only the beginning.

Yes, There is a Storm Proof Telephone System

Small businesses depend today on technology more than ever. When Superstorm Sandy hit the East Coast at the end of October 2012, many small businesses discovered to their chagrin how extensive their dependence on technology was! With electricity, Internet and Phone Service down in many areas, businesses ground to a halt. Not only were many offices flooded and without power, communications – the lifeline of most small businesses were down.

In the age of the Global Village, no communications meant an immediate loss of revenue. While companies scrambled to reopen, many businesses were closed for weeks and a few were able to resume business only a few months later!

Newtel Systems, a Lawrence NY based provider of IP phone services for businesses was one of those hard hit by the storm. The building that houses their sales and customers service office, was flooded and closed for weeks. As a phone company, Newtel could not afford even one hour of downtime.

As Aryeh Freund the Newtel CEO relates “Our customers depend on us to run their business so our servers are housed in some of the best and most secure data centers worldwide. We weren’t worried about our actual phone service going down, but we knew our customers would want to talk to us, and we couldn’t afford to close our customer service department, just because our office was flooded”.

To the surprise of their customers Newtel Customer Service was up and running almost immediately. Newtel (like many of their customers) had automatic rerouting of calls setup in anticipation of such an event. As Freund tells it., “We did not miss a beat. The Newtel Phone System automatically detected that our office is down and rerouted calls to alternative phones. Due to the built-in Disaster Recovery feature in the Newtel System calls are not lost and as the business recovers, settings can be reset on the fly.

Disaster Recovery is just one of the features offered for free to Newtel customers. When a disaster or even a simple loss of power hits, Newtel will automatically reroute calls to cellphones, portable IP phones or other land lines. Customers will still hear the same “Auto Attendant” and “Music on Hold” and will not have a clue that they are calling a temporary office.

While some companies spend large sums on special DRP sites which are very rarely used, if at all, Newtel customers have a DRP solution feature in their phone system at no cost!

As Newtel reps like to say “We are Storm Proof, Certified by Hurricane Sandy!”

Are we ready for universal phone numbers?

A number is just an identifier. It is universal in the sense that as long as your phone number can identify what you are dialing it can then route the call for you.

The question should be when will such a directory be available to the general public? A directory which would list all numbers and advise you what is the quickest and cheapest way to route your call to that endpoint.

The SIP protocol partially solves this issue. According to SIP your phone number is similar to an email address. For example if you dial moshe@flatplanetphone.net on a SIP phone today you will reach me. How does that work?

A SIP address like an email is divided into 2 major parts. Your name and your domain. Like email SIP uses the DNS system to figure where is the server that hosts my domain. When you call me, your phone will contact my domain and say I have a call for Moshe, where can he be reached? The server will have that knowledge based on what I have registered with him. My server will forward a message to my phone saying someone wants to speak to you, do you want to speak to him? In reality the phone will ring and if I will pick it up the message will go back to the originator – “please initiate the call”

The problem is that SIP while it is proliferating very fast is not yet ubiquitous. Many phone companies use a general directory and peer between themselves, but this is not open to the public. So for example if you are on AT&T and call a number on Cablevision, AT&T will look up the number, see that it is on the CV network and send it directly to CV via a IP peering arrangement saving money and resources for both companies.

There are a number of initiatives out there, but none have caught on yet. Unlike email which introduced a completely new medium, the phone network is based on a legacy network and change will take many years.

If we look into the future – internet everywhere, voice recognition etc. All you need to do is say out loud “Call Moshe” and a device somewhere on your body will place a call to “Moshe”. Here is the catch – there must be a directory somewhere. How will the network know where Moshe is? In order for a directory to be effective it must be universal. There are a number of open source protocols that bring us very close, but they need to be implemented. That is already a commercial and political issue

Flat Planet Group buys Omega Telecom

We are really excited to let you know that that we have closed an agreement to buy Omega Telecom a licensed telecom carrier based in Cyprus.

In the past few years we acquired a number of call centers based in Cyprus as customers and became familiar with the local telecom market. These call centers enjoy our unique services such as Local Phone Numbers in 50 countries with Dynamic Caller ID. With Dynamic Caller ID, call centers see a tremendous rise in calls answered and sales closed!

While there are 6-7 other active licensed carriers in Cyprus, there is plenty of room for innovative services such as those offered by our company. So when the CEO of Omega told us that he is interested in selling the company, it did not take us long to make an offer.

Why are we excited? Well for a number of reasons. Cyprus has become a major financial center due to it’s central location, membership in the EU and low tax rate. Many of these companies can profit from our IP services.

In addition we will now have our own range of geographic, premium (900), national (77) and toll free (800) numbers. In many cases we can offer a substantial payback for use of our numbers, which makes it even more profitable.

In the next few weeks we will finalize our plan and hire a local sales team. We are looking forward to becoming a major force in the Cyprus telecom market. Please contact me for more information. I will be happy to discuss with you more details!

My Bedroom – Your Call Center

In the mid 80s I saw my first call center in Atlanta, GA. While I can’t remember why I was in Atlanta, I definitely remember the impressive tour. Seats for 400 agents were set in a theater like hall. The CEO of the company sat on a raised platform and oversaw his troops.

While such call centers still do exist, many have moved to a much more cozy atmosphere, your bedroom. Working from home, is a win win situation for both companies and employees. VoIP services have enabled home workers for a few years already, but until recently they did not fully emulate the call center functionality such as what I saw 20 years ago in Atlanta.

In addition to sophisticated queue routing capabilities, call centers must have management tools so
managers can track calls status in real time. At the Flat Planet Phone Company, we have recognized these needs. We have developed two solutions for customers who want to deploy distributed home based call centers.

First, we have enhanced the basic Flat Planet Hosted PBX to include enhanced queue management, Call Spying and Call Whispering. These 2 functions let a manager listen on an agents call and talk to the agent without the customer hearing the manager.
These functions are now included for free in the standard FPP Hosted PBX.

Today we are taking the solution to the next level. We are integrating with a 3rd party solution that includes central real time graphs & reports, so the manager can see how employees worldwide are handling there calls, without intruding into the privacy of the employees bedroom…

Now you can have your cake and eat it too! Allow your workers to work from the comfort of home, but still be in control. A great solution for the current economy.

The Last Frontier?

Looking back, one of catalysts that pushed me into the telephony business was an article that Harry Newton wrote in 1995. Harry for those of who are not familiar with him was in his previous life the outspoken publisher and editor of the Computer Telephony magazine. As I recall, Harry wrote about the uniqueness of the telephone business, where you can sell the same product for 2 cents or $5 dollars. Newton’s law of telephony pricing (my naming) stated that the exact same “minute” can be packaged and marketed in endless ways with umpteen price points.
Harry Newton
Reading that made me realize that there is plenty of room in telephony for creative marketing. The small guy can play on the same level as the big guys. Took me about 10 years and eventually I did find my niche in the business. Meanwhile VoIP replaced Computer Telephony, the costs of minutes went down and while there is still some flexibility, the game is on fractions of pennies and the Minuteman is no longer king. Today as we all know the money is in features, functionality and ease of business processes.

So is Newton’s law dead? In the landline market probably, but it is live and kicking in the mobile market. A call on a mobile from NY to London can cost 2 cents or $5 depending on carriers, roaming fees and other miscellaneous tariffs. Savvy subscribers know how to play the game and some, like our friend Andy Abramson have multiple phones, sim cards and phone applications to squeeze the most out of his telecom dollar.

However most subscribers are victims of price gouging. I have more than once met travelers who have come back from a trip with phone bills of 4-5 THOUSAND Dollars! Either they are not aware of the price saving options or more likely they do not have the time and patience to use them. For the last 2 years I have been looking for a mobile solution that is low cost but more important – invisible to the user! Most people hate to dial codes, install software, change SIMs etc. They just want to dial from their contact list and talk!

Well that is going to change :-). The Flat Planet Phone Company will be introducing a unique LCR (low cost routing) engine for the mobile market at the upcoming ITEXPO show in Miami. Developed by an Israeli startup , this solution together with our successful hosted VoIP platform for resellers (set up your own phone company in an hour) will be a great solution to sell to businesses.

How does it work? Pretty straightforward. It works on all cellphones even those that are not smartphones. The account manager defines on the LCR server his costs when dialing direct and when using cost saving options such as callthru, callback, SIP over wifi/3G etc. Then all his users receive a SMS text message and synchronize their contact list with the server. The server automatically configures each contact on the contact list to dial in the most cost effective way. The process is invisible to the user. The dialing method is the same. Pick out a contact and dial.

No more big bills. No more excuses. Come to Booth 924 in Miami and check us out!
If you can’t make it – drop me a line at miami@flatplanetphone.com.

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