In regard to my recent post in which I note that VoIP has become boring, I’m not sure I really made my point. Perhaps I didn’t know what my point was then. No matter. Here I go again.
The current trends in VoIP sure look familiar. To me, the current VoIP “gorillas” look like the future CompuServes of VoIP. They are to the future of real-time communications what CompuServe was to email and online communications.
In 1990 CompuServe held massive dominance of the online user market share. They were the 800 pound gorilla. They were thought to be immovable. They had the capital. They had such a head start, there was no hope for anyone else in that space.
CompuServe was off spending a whole lot of money and resources solving all kinds of difficult problems. They were the best at what they did. They got so good at it, they couldn’t see any other way the world could operate. These problems had to be solved and they were sure they were the right company to do it.
Nobody could beat CompuServe at their game; and no one did. But some people invented a new game. CompuServe couldn’t adapt. They already knew how the world worked, after all. They were the best at what they did. But all those difficult problems they were working so hard to solve were suddenly obviated by a radically different approach, not by another company doing more of the same.
So for or all the VoIP users and the massive dominance of market share, consider for a moment that there are far more users not using VoIP than there are those using VoIP. The market leader today is the wide open untapped market — by a long shot.
When I look at something like the Telephony Conference & Expo agenda I mentiioned in my prior post, I see CompuServe: lots of resources being spent on problems that look a lot like 20th century problems. Lot’s of people thinking this is the way the world has to work, that these are the problems that have to be solved.
When I see people talking about Vonage market share and how they are immovable and unstoppable, I see CompuServe.
I’d say we are poised for another contrarian play. And those with their heads buried in the world defined by the Telephony Conference & Expo won’t know what hit them.
I love this analogy. I blogged about it:
http://www.noirextreme.com/node/64
I wonder if you had some examples of these dificult problems Compuserve were working on while the market was going somewhere else…
Thanks,
JC
Hi JC. Nice to meet you.
A few examples of the kinds of things I refer to include that Compuserve was deploying their own X.25 network. They were building modem banks and gateways and all sorts of custom protocols.
At one point Compuserve was even designing their own modems.
In the mid-nineties they were frantically trying to replace all this proprietary legacy with IP over PPP and industry standards. But it was too late.
My point of course isn’t that things will go just like Compuserve for Vonage, but that history shows a company can appear overwhelmingly dominant, but still be displaced (and rather rapidly), not by a frontal assault, but by being out flanked.
Thanks, this is helpful.
I completely share your views. Beyond Vonage, the risk that you highlight applies to all service providers that are moving into broadband services and content delivery such as video. To reuse your words "they are spending a whole lot of money and resources solving all kinds of difficult problems" such as scalable and reliable real-time delivery of a high bandwidth broadcast streams to their subscriber. But these subscribers may actually be looking for something different than what they already get and be better served with just-in-time delivery of on-demand content through a peer-to-peer network for a fraction of the cost.
I think Vonage has a big problem. I tried to transfer my business number from Qwest to Vonage, and Vonage dropped the number on the transfer. Qwest and Vonage each said it was the other