The Top 10 VoIP & Video Conferencing Developments of 2011

Video conferencing was a lot more interesting to watch in 2011 than was VoIP. It wasn't that nothing happened in VoIP during the year. It was just that a lot more happened in video conferencing. This was especially true in the SMB space. Early summer saw a slew of significant announcements from vendors and providers. These announcements figured prominently in the VoIP Evolution report "SMB Video Conferencing: Getting Beyond Clouds & Interoperability."

Some of the year's developments were on the negative side of the ledger, including the demise of some promising efforts featured here in years past. Others had mixed impact, such as the proliferation of technology that would let more SMBs use video conferencing, without offering the flexibility that would help them leverage their speed and nimbleness.

This year's list represents a significant departure from previous years. Most obvious is the shift in favor of quality as opposed to quantity, as evidenced by the focus on the 10 most important developments of the year rather than a larger number. As a result, there is minimal emphasis on skillfully promoted startups that may be interesting but have uncertain potential, and more on developments with greater likely impact.

1) Microsoft Buys Skype

Just about anything that happens to Skype is a significant VoIP and/or video communication development. The Internet VoIP pioneer started the year with the impressive news that, according to TeleGeography, it had accounted for 25 percent of all international calling minutes in 2010. Later it announced integration of its video calling app with Facebook. On the other hand, it also said in January that the planned IPO it had announced in August 2010 would be delayed until the second half of 2011.

The delay became irrelevant in May, when Microsoft announced it was acquiring Skype. So far it remains unclear how the stodgy software giant will ultimately use and integrate the capabilities of the Internet phone company. The biggest question may be whether Microsoft's corporate bureaucracy will smother or otherwise stifle Skype's notorious tendency to disrupt any market it touches. The answer will affect a lot of SMB VoIP and video conferencing users one way or another.

2) Vidyo Gets – and Spends – Money

Already well-funded New Jersey startup Vidyo got two more rounds of financing – $11.5 million in January and $22.5 million in September – to bring its total to $84.5 million. It has done a lot with the money. One of the most innovative video conferencing startups around, Vidyo has the potential to disrupt in a number of ways. In June, it challenged Cisco at the high end of the market. The immersive telepresence system it introduced in the $50,000 range dramatically undercut the $300,000 systems the dominant provider was pushing.

Vidyo also brings innovative technology capable of transforming the low end of the market. It does away altogether with the video conferencing MCU, or multipoint control unit, that conventional systems use to combine users' video streams in a single conference. Instead, it uses proprietary video routing software called VidyoRouter running on standard servers. It is significantly faster and cheaper than the MCU approach. Vidyo's Adaptive Video Layer (AVL) architecture uses H.264 SVC (scalable video coding) technology to ensure that it can deliver video streams over a wide variety of connections, including mobile, with good quality.

In November, Vidyo came out with a virtualized version of VidyoRouter that can run on servers in the cloud. That will make it possible to get the company's conferencing capability as a service, rather than only being able to purchase it as a system. Vidyo technology is behind the Google+ Hangouts video chat app. And, covering all the bases, Vidyo began offering mobile video conferencing software for iPhone and iPad in October, and for Android in December.

3) Google Voice Adds Number Porting

Google Voice remains a service of huge disruptive potential. It provides users with a free phone number, and they can have calls to that number forwarded to any land or mobile line they wish. This means individuals no longer have to stick with their existing landline or mobile phone company just because they don't want to change phone numbers. Once they have a Google Voice number, they can treat their carrier-issued numbers as disposable.

Of course, number portability now lets them keep their numbers even when they change carriers. But that's a hassle, and it's usually not possible if they move to a different area code. With Google Voice, changing carriers or area codes requires nothing more than going online and changing forwarding numbers. Even routing calls to office, mobile and home phones, simultaneously or at different times during the day, is simple. Google Voice also provides sophisticated handling, online access and even rudimentary transcription of voice mail.

The problem of course is that people start out with carrier-issued numbers. The prospect of trying to get all their personal and business contacts to use a new Google Voice number is daunting. But in January 2011, Google announced it would make number porting possible. For $20, users could transfer their existing numbers to Google Voice. With that, there was no reason not to switch.

Even with Google Voice, users would still need some kind of line to receive forwarded calls on. Thus most people would probably want to keep at least one land or mobile account. But it would be their secondary number, not their primary one. More important, Google Voice also offers the capacity to make and receive calls online via headset-equipped PCs. If that becomes popular, landline carriers will lose voice customers in even greater numbers than they are already.

Other intriguing Google Voice possibilities include transporting mobile voice calls over Wi-Fi, bypassing cellular carriers' voice circuits altogether, and sending international calls over VoIP circuits for the price of local calls, further undercutting carriers' revenues. Number portability makes such potential benefits available to huge numbers of people who might otherwise hesitate to try the free service.

4) Cisco Kills Consumer Video Conferencing Effort

That was quick. In October 2010, Cisco announced the ūmi "home telepresence" product. It set the standard for quality – and price – in home video calling. The equipment cost $600, HD television excluded, and service was another $25 per month. Oh, and it required premium broadband service to handle the video stream. In return, households got a superb communication experience that made it seem like being in the same room with another household (which also had to have the same equipment and broadband capacity).

One – though not the only – glaring problem was that ūmi was competing with, among other things, HDTVs with built-in Skype video conferencing, which cost nothing but the price of the set itself. Indeed, realizing that the price was a barrier, in March 2011 Cisco brought out a less-expensive, less-capable version of ūmi. But by then it was too late. The following month, the vendor announced it was folding ūmi into its business telepresence division. It also shut down its Flip consumer video camera effort at the same time.

Despite its failure as a consumer item, Cisco could conceivably have some success pushing ūmi as a capable, cost-competitive small-business telepresence product. But that also would cause one big problem: it could undercut more expensive existing low-end Cisco telepresence/video conferencing offerings. As such, the mere possibility presents a conflict between the dueling imperatives of maximizing corporate profits and maximizing customer value. Wonder which one will win (or has already won).

5) Blue Jeans Network Makes Cloud-Based Video Conferencing Easy

Call it connectivity as a service. The idea is to make it easy for any company using any video communication endpoints they've bought to hold video conferences. For complex technical reasons, universal connectivity is easier said than done. But even limited success can prove highly useful. One way to achieve such connectivity is through consortia, standards and other industry-wide approaches. The other is to provide it as a commercial product.

Blue Jeans Network is one of the more ambitious examples of the latter. In June, the well-funded ($23.5 million) startup launched what it dubs Any(ware) conferencing. The company says its cloud-based video conferencing service can connect a broad array of video phones, room systems and other endpoints from companies like Cisco/Tandberg, LifeSize, Polycom, Sony and the like. In November, it added interoperability with Skype and Lync. By reducing concerns about issues such as device interoperability, Blue Jeans Network will provide a clear indicator of how much demand there is among SMBs for video conferencing, once all the big technical and financial obstacles go away.

6) BT Kills Ribbit

It started out so well, they seemed to make a perfect pair. Ribbit called itself Silicon Valley's first phone company. It provided a platform that let developers easily add voice features to their Web apps, using familiar programming languages and techniques. In July 2008, U.K. carrier BT bought Ribbit for $105 million. Executives of both companies said BT planned to allow Ribbit to offer its services to all comers, even those that wanted to use other carriers to transport their voice traffic.

That represented quite an enlightened attitude. Established carriers typically prefer to bundle any applications and services they sell with their own transport, so they can make money both from the application itself and from carrying voice traffic to and from the app. But in August 2011, BT said it was shutting down Ribbit's commercial service, and recommended that its users move to Twilio, a similar platform. So much for enlightenment.

7) Rebtel Integrates Wi-Fi, Cellular Voice Calling

Making VoIP calls over Wi-Fi connections using a smart phone has a lot of benefits. When it involves an Internet telephony service like leader Skype or runner-up Rebtel, calls are free to other registered users, and cheap to regular phone numbers. But because calls are made from the handheld computers that smart phones actually are, there is no need to be tethered to a desktop or laptop PC. On the other hand, during lunch hour at your favorite hotspot, the Wi-Fi quality can get iffy. That's when you might want to switch to plain old cellular voice.

In October, Rebtel upgraded its iPhone app to allow seamless transitions between Wi-Fi and mobile voice connections. A feature called KeepTalking lets users switch from a Wi-Fi to a traditional voice call simply by pressing an onscreen button. The switch takes about two seconds, after which the call starts using cellular minutes. International calls to other Rebtel users still cost nothing beyond the charge for those local minutes. The feature is also convenient if you want to leave Starbucks and keep talking to that important client or investor while you head for the car, cab, train or plane.

8) Verizon Wireless Makes First VoLTE Call

LTE, for Long-Term Evolution, is getting a lot of attention as the global 4G cellular technology of choice. It provides much faster data communications and Internet access over wireless connections than does 3G technology. But delivering voice calls over LTE takes some doing. The best approach is a recently standardized technology called Voice over LTE, or VoLTE. There are a number of ways to implement VoLTE, however, and each has its own challenges. In fact, some mobile carriers are putting off dealing with it, by using LTE to deliver data traffic but continuing to deliver voice calls over existing network technology.

Using VoLTE in conjunction with an underlying network technology called IMS (IP Multimedia Subsystem) will produce the best results in the long run. It's technically difficult because it has to be implemented throughout the network in order to work – an expensive task for a national carrier. But IMS-based VoLTE supports the kinds of features and capabilities that make VoIP superior to conventional voice service, such as presence detection, availability notification, rich messaging (including image attachments), file transfer, address books and integration with video communication.

The good news for U.S. users is that Verizon Wireless is going directly to IMS-based VoLTE. This will set the standard for other carriers to meet as well. It will also offer stronger competition against so-called over-the-top (OTT) VoIP providers, which deliver mobile voice services solely over Wi-Fi, 3G or 4G wireless data connections. Verizon Wireless conducted what it claims was the first U.S. IMS-based VoLTE call over a commercial network in February.

9) Polycom Video Conferencing Platform Enters the Cloud

In July, Polycom announced that it was providing its UC Intelligent Core video conferencing platform to cloud video conferencing providers. Previously the platform had been an enterprise product, providing large organizations that could afford it with the MCU and other infrastructure equipment necessary for connecting video communication endpoints in multiparty conferences. Its availability as a ready-made platform for providers will make video conferencing more widely accessible and affordable to SMBs, since cloud-based services relieve companies of the need to buy and operate their own infrastructure equipment.

On the other hand, the Polycom platform is based on the traditional room- and reservation-based enterprise model. As such, it doesn’t offer features such as seamless escalation from video calling to conferencing that some less-traditional solutions offer. Such capabilities can help smaller companies leverage their inherent flexibility and respond quickly to keep ahead of the competition.

10) Facebook and Skype Integrate Video Calling, Google+ Offers Hangouts

Skype and Facebook integrated Skype video calling into Facebook in July 2011. The Google+ service that includes Hangouts, a group video chat service, became publicly available in September. Both moves represented big steps towards the future of voice and video communication. In that future, these forms of communication will often be invisible. Rather than functioning as separate and distinct processes, they will be something that occurs naturally in the context of some other application or service. That app or service will often be a social network.

This trend will have all kinds of potential effects. It will push video communication even closer to ubiquity. It will also further advance the notion that video communication should be free. That will make it harder for providers to make money selling video conferencing as a commercial service, particularly to individuals. But it will give end users more options than ever, and will generally work in their favor.