VoIP is stagnant

Nobody likes an “I told you so” but I have reached my limit.

VoIP is in a horrible quagmire. There is no vigor. The best proof is that the vast majority of my posts from four or five years ago, if posted today, would sound as fresh and pertinent as anything being written today on the VoIP blogs and in the press.

It’s the same old themes, the same old questions resurfacing over and over. And even worse, the answers are mostly still the same today as they were way back in 2005, 2004, and in some cases as far back as 2003.

For example, take 12/11/2003: Why AT&T, Quest, etc. VoIP announcements are lame in which I said:

To visualize how un-Internet-like these services are, consider one user using so-called VoIP from AT&T and another using so-called VoIP from another carrier offering a similar service (e.g. Vonage). The call leaves my house over the Internet to get to my so-called VoIP provider, then goes onto the century-old telephone system, then back onto the Internet again, and finally to the other party. That doesn’t seem very Internet-like.

Now contrast to Mark Gibbs at Eweek “Why Skype and Vonage must die” posted today, October 12, 2007:

But the real du’oh of [Vonage and Skype] is that to connect a Skype user to a Vonage user or vice versa requires routing via a 19th century concept: the public switched telephone network!

Or Dameon Welch-Abernathy at

“Connecting The Islands Of VoIP” also posted today October 12, 2007:
But each company creates their own island that only connects to other VoIP islands through a common method: the PSTN.

There’s no reason that each of these VoIP islands should touch the PSTN to make calls that are essentially VoIP on both ends. It’s inelegant and costs extra money. And with the technology that exists today, there’s no reason it needs to be this way any longer.

In 2003, I was talking about making voice communications work like email, where some day everyone has a VoIP address, in the same way that we pretty much assume people have email addresses today. In this case, the economics of Voice communications work like email economics, which totally changes the way people communicate. It also represents $300 billion in the US and $600 billion worldwide in money people don’t have to give away to telecos for services we don’t need. This is still an interesting vision, but one that has received very little traction to date (exceptions are Gizmo, FWD, and to an extent Truphone, in terms of commercial services).

It would be nice to see some progress. It would be nice to see something noteworthy, for good or bad, a controversy – something. Instead we have the same issues being raised again and again, and debated as though they are new. Skype hardware, Did Ebay pay too much for Skype?, How fast are landlines going away?, Is VoIP Dead? Whether the answer was written 6 months ago or three years ago, it pretty much still applies today.

So if you want to find out what’s going in VoIP, don’t waste your time on Technorati or Google – just search the Mr Blog archives.

4 comments for “VoIP is stagnant

  1. OK, time to call the bottom of the Trough of Disillusionment, so steal Gartner’s phrasing.

    Here’s what I think’s happening. We’re moving from "horizontal VoIP" to "vertical VoIP". The opportunity increasingly lies in building VoIP into bigger apps and services that solve specific problems for specific user communities. There is no "PSTN 2.0" and interoperability isn’t going to happen because it _cannot_ happen; each of these services is tailored to solve a particular user problem and the features and interaction models are almost by definition going to be incompatible. What does "Skype me" become as a presence feature in MSN, let along a more exotic setting?

    For PhoneGnome, maybe the next steps/questions are: how can I integrate this into a social networking service? and who might need a landline "better voice" application to solve their vertical logistics/healthcare/education/etc need?

  2. Interconnect was an issue even for the traditional phone companies. There is no regulator for VoIP and hence disputes in this area will take its own sweet time to be resolved.

  3. You guys both missed my point. This post isn’t about Interconnect. It’s about there being nothing new to say about VoIP. The Interconnect issue is simply an example of that. The things being debated today are basically the same as they were four or five years ago because so little has actually changed in this industry. You might say the same thing for all of "Web 2.0" and "social software" to a degree too I suppose, if not perhaps the Internet at large, but I think with VoIP it is downright palpable.

    I do not want this to turn into a debate about Interconnect, but one exception to your position Martin (which I agree with concurrently with what I’m saying, actually) is in the case of a basic call that is being dropped to a PSTN gateway anyway. In that case, dropping via ENUM/SIP if possible is a no-brainer and while it may not make feature interaction any better, it doesn’t make it worse or "hold Skype back".

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