The Future of Communications

I thought it was a very good piece. with excellent clarity. It defines companies as falling into two groups. Plan ‘A’ and Plan ‘B’. The first are companies focussed on interoperability with the phone system. The second are pure computer-to-computer players.

Santa Cruz Networks (my new company) is very definitely in the ‘Plan B’ space. We provide the network devices necessary to enable a service provider to offer voice video and data communications, to individuals or groups, over IP. Our platform is a true many-to-many platform. Edge devices need no more than 100k of bandwidth, no matter how many people are in a meeting. And all end points have full voice video and data communications to all other end points.

This whole era and its process reminds me a lot of when I started Easynet with David Rowe in the UK in 1994. At that time BT were not offering internet service. We were No. 2 into the market. By 1999 there were 2000 internet service providers. UUNet and Earthlink and MindSpring and Spry all came out of that era. The Telco’s were late to market and tried to slow it down. Many tried to build walled garden, AOL like, hybrids. In the end their hybrid strategy failed. Ascend made a multi billion dollar business supplying the emergent ISP’s, as did many others.

The similarity is that now, ‘Plan B’ is available at a price point that allows new communication service providers (CSP’s lets say), to enter the market with pure IP based, computer-to-computer services that bypass the phone system entirely. Think desk-to-desk or home-to-home or desk-home calls.

My bet is that we are going to see lots of CSP’s arising over the next few years.

We have sold our 2000-subscriber , multi-party, Voice Video and Data over IP, appliance to many new service providers since December. Their price is only $85-100k MSRP, depending on which model, to put up to 2000 subscribers into service. Discounts mean that in pracctice this is even lower. Bandwidth is about $100 per month per 50 subscribers. That makes for a great business at very low price points. And the performance [great voice quality, application and document sharing, video, IM and presence, up to 200 on a call) is mind-blowing.

I think there is a lot to talk about in the edge and center issues here also. P2P and client-server both have an interesting place in IP based communications. It’s very clear that you need both, depending on what service and what QoS you want to provide client-server is actually the only way. At simpler service levels (1-to-1 and 3-way calling) P2P works quite well.

Another great issue is interoperability within ‘Plan B’ approaches. We have decided to standardize on email address as the ‘telephone number’ for IP based communications. It seems easier to explain an upgraded email address that to create a whole new ID system. Skype has a ‘screen-name’ approach. Beyond identifiers, there are really no protocols in the standards space for multi-party voice, video and data calls. Hence we are all proprietary. How are we going to get beyond that?

Anyway – I enjoyed Clay’s essay and look forward to how this area evolves.

PC Magazine Editors Choice for VidiTel

Check out the PC Mag review of Video Conferencing products. It’s here.

VidiTel did great, winning the editors choice. Here’s a key sentence:

“Santa Cruz Networks’ VidiTel offers the best combination of features and quality for business users. It works seamlessly through most corporate firewalls, supports large multiperson meetings, and includes a variety of communication tools that are invaluable when collaborating online.”

Telecoms as a subset of the Internet

Kevin Werbach nailed it today:

There’s a there there

‘ENUM and SIP. Two acronyms that mean nothing unless you’re a Net-savvy telecom geek (like yours truly). Word to the wise: pay attention. These are the bridges between the the world of telephony and the world of the Internet. People like Jeff Pulver and James Seng are recognizing that something significant is afoot in the arcane world of network addressing and signaling.’

‘Voice over IP has been around commercially for at least eight years, but it’s now reaching a critical stage of maturity. One side is consumer adoption of services like Vonage and Skype, but that’s just surface activity. Deep integration on the back end is a more profound shift. It’s the difference between making a phone call over the Internet, and voice as an internetworking application. Or to put it another way, the different between the Internet as a subset of telecommunications, and telecommunications as a subset of the Internet.

The key here is that telecoms is going to be nothing more than software running over IP networks, including the Internet. The software will offer many things for free [peer to peer calls for example] and many paid-for services [multi-party conferencing for example]. The difference between free and paid for will be market driven but today is related to architecture and costs. If there is a server, and transport involved, then there are costs and so charges. If there is no server or transport, as with P2P, service will be free. Clearly, in this world, there is no place for businesses that make cash by charging for person to person calls.

Rich Media – video and data sharing – will be optional features of this IP based communcations platform.

It really happening. As Kevin says – there is a there there.

2000 video and voice over IP subscribers, $50k

Check this out.

One of these boxes supports 2000 subscribers. If you charged only $50 per head per month for unlimited video and voice over IP a fully subscribed box would generate 50x2000x12 – that $1.2m a year. Even after bandwidth and hosting fees are taken into account you have a great business.

Santa Cruz Networks – full disclaimer, I am the CEO – is currently [through 15 November] offering to finance emerging service providers. What this means in practice is that you pay less than $10k up front and about $5k monthly to become a full communications service provider, offering voice and video over IP to individuals and enterprises. It’s like being the first ISP in your town. Contact Max Montgomery if you want to know more.

Communications Revolution

Dave said: “I told Doc tonight at dinner that I think we’re at the cusp of a communication revolution”.

OK I sooooo agree with this. When I helped start EasyNet in 1994 there were only 2 ISPs in the UK. It cost us $50,000 to start the company. Becoming an ISP was suddenly within reach of 2 guys and a credit card. Today, with Video and Voice over IP technology it will soon be possible to start a communications company for less that $50,000. This is going to make competing with the big telcos an achievable goal for many startups. Somebody is going to become the UUNet of communications, and the Earthlink of communications and even the AOL of communications. Many thousands of others will become local communications service providers, just as there are thousands of local ISPs.

It’s going to be fun to watch.

4G Wireless – IP based mobile communications

From The Register

“The second factor in 3G’s fate is, of course, whether 3G networks take off at any significant level at all, or whether they will be marginalized by Wi-Fi/WiMAX and by the advent of IP-based 4G.”


It seems clear that 2G, 2.5G and 3G wireless are simply staging posts to broadband wireless with real time communications over IP. Its just a matter of time.


However, state attempts to regulate IP based communications like Voice over IP will certainly slow things down. Shame.

Kevin Werbach on VoIP

http://werbach.com/blog/2003/09/12.html#a1163

Kevin has a number of posts – of which this is the latest – defining 2005 as “The year of VoIP”.

I think he is right. This Bell Canada announcement is equally a signpost. As is this interview with Vint Cerf.

I can’t help thinking that voice is only one component of a communications over IP world however. The future network – which is here today in embryo – is going to carry voice, video, data, messaging and presence information. VoIP will be just a small milestone.

I think of it as a process like the OS taking on more and more. Only in this case the OS is the IP network.