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