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12/31/2010

The Top 25 VoIP and Video Developments of 2010

After starting as the year of HD voice, 2010 ended as the year of video communication. Video in fact became so prominent that it earned a place in the title of this list. Announcements about new video communication products and services were so numerous they became routine. As the year progressed, it became clear that video conferencing/calling was no longer a luxury for the corporate and government elite, but was well on the way to becoming a commodity for the masses. Ordinary individuals will soon be making video calls with little more thought than they now give to picking up a telephone. Making that happen, however, will be a complex challenge for vendors and service providers.

A variety of other factors shaped voice and visual communication during the year. Chief among these were developments in mobile VoIP and video calling, along with an acceleration of the move to cloud-based voice services. Politics and the weather played unusually high-profile roles as well. So did the negative: Unlike last year, not all the important developments were advances – some were downright problematic. But even the negative developments had some constructive aspects. Skype of course figured prominently in many of the developments. So pervasive was the influence of the Internet VoIP pioneer that it seemed that the corporate slogan of "Skype Everywhere" applied to its appearances in headlines as well.

Overall, it was a dynamic and exciting year for VoIP and video communication. A cautionary note regarding the list: developments don't appear in order of importance. Rather, they are grouped together by subject matter to provide a semblance of coherence. For convenience and because of their high-profile nature, most video communication-related developments appear heavily at the top, though the ultimate impact of some of the items further down may in some cases be far greater.


1) The Iceland Volcano

In 2009, the ongoing recession was a good reason for trying video conferencing. But it was still a matter or choice or judgment whether to fly to a meeting or hold it by video conference. In 2010, the April eruption of Iceland's Eyjafjallajökull volcano left many with no choice. Because it shut down European airports altogether, those with crucial meetings had to choose between video and nothing. It amounted to a forced lesson on the strengths and limitations of video conferencing.


2) Cisco's Ūmi Home Telepresence Product

When Cisco applied its top-notch technical skills to home video calling, the result was utterly unsurprising: an expensive telepresence system that provided a superb user experience. The ūmi costs $599 for the equipment alone, and $24.99 per month for the service. With sophisticated features like ability to zoom and pan the camera, along with 1080p HD resolution, it makes video communication between living rooms almost like being there. As such, the ūmi clearly comes down on the quality end of the quality-vs.-price continuum in the home video communication market. And it sets the marker for the coming battle with cheap or free services for domination of the living room.


3) Skype on TV

Speaking of the living room, Skype in 2010 tied up with LG, Panasonic and Samsung, all of which are building Skype software into certain TV sets. This integration will permit free video calls to other Skype users, including those using TVs, though not to all Skype mobile users. The quality of the service won't necessarily be low, but will at least provide lower resolution that ūmi offers. And although the cost will be embedded in the overall costs of the sets, it will undoubtedly amount to less than the price of ūmi equipment, and there will also be no charge for service. Either way, the products will provide clear insights into how consumers think when it comes to deciding between quality and price in home video communication.


4) An Explosion of Mobile Video Calling Options

On the last business day of 2010, Skype (there's that name again) brought video calling to the iPhone. Though it got a lot of attention, the move was far from the leading edge. Apple had introduced FaceTime for the iPhone 4, which was the first to have a camera facing the user, in June. On September 30, Palo Alto, Calif.-based startup Tango introduced a free mobile video calling application for iPhone and Android. Within 10 days, downloads reached 1 million, and by mid-December, they hit 4 million, around the time Tango came out with a version for the iPod touch. Adding to the momentum, in early December fring announced that the number of minutes delivered by its cross-platform mobile video calling service for iPhone and Android since its introduction a year earlier reached 100 million. Also in December, ooVoo launched a mobile 4G video chat service that also connected users on Windows PCs and Macintoshes.

The implications of this trend, incidentally, extend far beyond the providers and their users. The proliferation of mobile video apps and services, including both communication and streaming-entertainment types, is the main impetus driving mobile carriers to upgrade their networks to 4G levels far faster than they had been planning to.


5) PC-Based Multiparty Video Conferencing

Once again, it wasn't the first one or the only one, but its name made it the important one. Skype introduced group video chat for up to five people in May. It was available only for Windows users at first, then Mac users got it in beta version. Either way, a lot of others were offering something similar. OoVoo uses downloaded client software, and charges for video conferences for three to six users (two-way chats are free). TokBox offers free browser-based video chat for up to 20 users, with more elaborate versions that allow things like document sharing, dial-in numbers, up to 200 participants and video submission of questions, for monthly fees. ViVu uses the Skype service itself to provide multiparty video conferencing with various business-friendly features such as slide and desktop sharing, recording and archiving and playback. With so many companies in the world that can't afford Cisco Telepresence, this is one trend that is just getting started.


6) The Tablet as Business Video Communication Device

If you ask kids in an elementary school class how many have iPads, you might be surprised at how many it is. If you ask how many of their parents have iPads, you might be surprised at how few it is. Message: the iPad is clearly a consumer item. Not so the Avaya Flare, a device the IP PBX vendor calls a desktop video device. It runs the Android operating system. So does the Cisco Cius, another new tablet product. In both cases, video conferencing is an essential selling point for what the vendors are touting as a new kind of business communication tool. And in line with its continuing campaign to make its consumer-oriented service a potential business tool, Skype brought its brand of video calling not only to the iPhone but also to the iPad on December 30.


7) SBCs Starting to Support Video

Session Border Controllers (SBCs) sit between networks of different communications service providers and ensure that voice and other real-time services make the transition between networks smoothly. Among other things, they ensure security, connectivity, quality of service and regulatory compliance. But video traffic is quite a bit more complicated than voice to handle smoothly. Thus it's symptomatic of the growing importance of video communication that major SBC vendors are working to make sure their products are video-ready.


8) UC Interoperability Forum (UCIF)

The biggest obstacle to the growth of video communication is the inability for systems from different vendors to work together. A group of unified communications vendors formed the UCIF in May in order to overcome that problem. Significantly, the group didn't include Cisco, which has its own ideas about how to achieve interoperability (see following item). Recently, however, the Forum has changed its structure in ways that in theory could make it easier for Cisco, along with fellow holdouts Avaya and IBM, to come to terms with the group. If they do, it will be better for everyone involved, especially users.


9) Cisco's Telepresence Interoperability Protocol (TIP)

In January, Cisco released its Telepresence Interoperability Protocol as a public domain protocol that would be available to other vendors for free. TIP allows multiscreen telepresence systems to interoperate, and will make it easier for manufacturers to build products that interoperate with Cisco's and each other's products. Tandberg, which Cisco acquired, had used the protocol in its Telepresence Server, and LifeSize and Radvision licensed it for use in their own products.

The move built on other Cisco efforts to increase video and other interoperability in ways that worked to its advantage. For example, it introduced an appliance called the Intercompany Media Engine. Companies that install an IME in their premises can hold video conferences with every other company that has an IME. Cisco has also made the technology underlying the IME available to other vendors. It had previously submitted the technology, called ViPR (Verification Involving Public Switched Telephone Network (PSTN) Reachability (ViPR) to the IETF as a proposed standard. ViPR collects information about PSTN calls between two companies using IME appliances. It then uses that information to subsequently route calls, including video calls, between such callers over the Internet or private IP networks thereafter. The main question is whether a standard originally developed by a major vendor to strengthen its strategic position will be acceptable to the broader industry.


10) Carriers' Telepresence Interconnection Push

Just as vendors are demonstrating increasing interest in interoperability, large carriers are showing appreciation for the fact that telepresence products require large numbers of users to be truly useful. Thus it was significant that in November AT&T and BT announced a deal to interconnect their telepresence services, so that all enterprises connected to either of the two carriers could carry on video communication sessions with each other. Broadening technical interoperability is another matter: To start with, all endpoints have to use Cisco gear.


11) The Release of Microsoft Lync

IP PBX vendors have long feared getting squeezed out of the office by Microsoft telephony software. Microsoft's Lync product, which became officially available in September, deepens that concern. A successor to the OCS (Office Communications Server) line, it runs on standard server software and provides voice calling and call handling, instant messaging, and voice and video conferencing. It also naturally integrates with other Microsoft business applications. Lync still won't be a full-fledged competitor to dedicated IP PBXes, which benefit from the strengths of specialization. But it's a big step closer to posing a major threat to such products. As such, it makes IP PBX vendors' moves to provide cloud telephony services and away from the hardware business look more sensible than ever.


12) HD-Capable Enterprise IP Phones for Under $100

In June, Grandstream introduced an impressive HD voice-capable IP desk phone for $95 list. It wasn't the only cheap HD phone around, but it was a clear indicator that HD voice is no longer a premium capability. As such, the move may have marked the beginning of the end of the hype that had surrounded HD voice for the past couple of years. After all, when virtually any business that wants it can have it, what's left to talk about? All that's left is the hard work of implementing it. That doesn't mean that HD voice doesn't still bring substantial benefits for adopters. It only means that it's on its way to becoming the rule rather than the exception.


13) XConnect's HD Voice Peering Federation

One example of the hard work necessary to make HD voice happen got started early in the year. XConnect's Voice Peering Federation, announced in January and launched in April, brought together interested companies to lay the technical groundwork necessary to make HD voice equipment and services interoperable. As such, it was a big step towards ensuring that the clear sound of HD voice calling becomes truly ubiquitous in the future.


14) Google Voice Access Through Gmail, iPhone, iPad, iPod touch

Google Voice became ever more widely available and usable in 2010. In August, the free service became accessible through Gmail, letting users make outbound and receive inbound calls using only a headset connected to a PC, rather than requiring them to use a conventional phone line to both make and receive calls. Because Google Voice provides free outbound calling to North America, this allowed users for the first time have free phone service through an Internet-connected PC, and made it feasible to cut the cord even without a cell phone. It was even better than Skype, which charges for both outbound and inbound calls to and from conventional phones.

And though it took a while, in December the ground-breaking service became available again through Apple's App Store. After its rejection by Apple the previous year triggered an FCC investigation, the iPhone version of the Google Voice app officially hit the App Store in mid-November 2010, with support for iPad and iPod touch coming about a month later. Although guessing Google's intentions is always risky, it's clear that the giant is assembling the pieces of a service with the potential to undercut the business models of almost every voice service, whether conventional telco or Skype-like disrupter. Perhaps the most radical possibility of all is a permanently free voice service supported by revenues from non-voice sources such as search. Among other things, that would present regulators with all kinds of new conundrums as they try to figure out where it fits in the regulatory scheme of things.


15) States Allowed to Collect Revenue on VoIP Services

In 2004, some U.S. states wanted to regulate so-called nomadic VoIP services like Vonage. Doing so would have allowed them to impose fees to pay into the Universal Service Fund, which subsidizes phone service in rural areas where there aren't enough users to support commercial service on their own. At that time, the FCC denied the States' request. But in November 2010, the agency ruled that states could impose such fees on VoIP services on a prospective basis. The move showed that VoIP has become such a mainstream technology that there's little to differentiate it from conventional phone service. And it made the future business models of VoIP providers potentially a lot more complicated.


16) Network Neutrality Unreality

The arguments over network neutrality have become so emotional and political that they often have little to do with reality. Anything that serves as a reminder of the real-world impact of the debate is thus beneficial. For VoIP and video communication in particular, that impact will be substantial. One way or another, decisions and actions for and against network neutrality will affect all services that run over the Internet, particularly those that have the potential to compete with ISPs' offerings. By now, attempting to influence the debate in favor of "for" or "against" may be futile. But it's at least worth trying to move it towards where it's based on reality rather than on fantasy.


17) Congress Outlaws VoIP Caller ID Spoofing

The necessity was obvious. VoIP makes it easy to attach different caller ID numbers to outgoing calls. Sometimes that's a benefit, as when you want to call from your cell phone while you're on the golf course, and have it look like you're calling from your office. Sometimes it can be used in malicious ways. The law that the Congress passed in August made caller ID spoofing illegal when used "with the intent to defraud or deceive." It was yet another indicator of the extent to which VoIP has become a technology that potentially affects everyone.


18) China's Plan to Ban Internet VoIP Services

Speaking of government actions, in December China indicated its intention to ban unregulated Internet VoIP services like Skype. One motivation is undoubtedly to keep such services from undermining the revenues of government-favored carriers. Another may be the desire to keep citizens from using communication methods that are difficult if not impossible to tap. Either way, technologies such as deep packet inspection make such bans technically feasible, so it may work. China has already proven that tight control of citizens' access can prevent the Internet from serving as driver of democracy and freedom of information. It may be about to prove that similar methods can prevent VoIP from becoming a source of disruption and privacy.


19) Fonality's Transition to the Cloud

After a long run as a provider of economical Asterisk-based IP PBXes, open-source telephony pioneer Fonality transformed itself into a provider of hosted VoIP services, sometimes also known as cloud telephony or Communications as a Service (CaaS). The transition represented a move from the low-margin roller coaster of hardware sales to the relative security of recurring revenues. It was also yet one more indicator that the future of telephony lies in the cloud, not in boxes.


20) The Growth of Hosted Unified Communications

A number of developments in 2010 indicated that, as with VoIP, the future of unified communications is in the cloud. UC, a term with meanings that vary depending on who is talking about it, integrates multiple methods of communicating, often including video chat or conferencing, with voice calling in a single platform or interface. One development was an early-summer tie-up between BT and Cisco to offer hosted IP communications based on Cisco's Hosted Unified Communications Services (HUCS) platform and BT's Onevoice UCC (unified communication and collaboration) service. The announcement followed closely one that saw Verizon and Cisco collaborating to offer a cloud-based UCC service. Meanwhile, IntelePeer and WorkSpace launched a cloud-based UC service based on the Microsoft OCS platform.


21) Virtual Reality Voice and Visual Chat

Launched in September 2009, Mingleverse gained validation for its virtual reality voice and visual platform in late 2010 when it attracted $1.4 million in seed funding. Rather than displaying actual video streams of individuals speaking, Mingleverse provides a sort of virtual video conferencing that involves individuals' avatars interacting in 3D virtual rooms. Stereo HD audio matches the direction of a participant's voice with the visual location of the speaker's avatar. A large virtual wall board displays documents for participants to discuss. Because there is no streaming video, the service requires less bandwidth than conventional video conferencing, and the immersive environment it offers may prove compelling to many. The importance of the innovative service lies less in its actual market impact than in the way it illustrates the breadth of innovation that VoIP and IP video technology make possible.


22) The Skype Outage

When a Skype software glitch cascaded into system-wide crash of the service in late December, it again inconvenienced a lot of people. It also forced many to analyze the implications of relying solely on an Internet-based VoIP service to meet their crucial communication needs. Such an analysis may lead many to take a more cautious approach towards adopting VoIP. It will undoubtedly lead others to more thoroughly investigate the VoIP providers they are using or considering, and conclude that they have little to worry about. Either way, it sets the stage for a useful renewal of debate about the tradeoffs of communications services based on non-traditional models. It also offers a great opportunity for Skype to shed light on its still-mysterious technical model, and for VoIP providers in general to talk about their technical strengths, SLAs and other reassuring factors.


23) More and More Skype Competitors

Rather than discouraging competitors, Skype's huge head start in user numbers encouraged many to jump into the fray in 2010 and try to get a piece of the action. For example, fring introduced fringOut for Android, iPhone and some Nokia phones, an attempt to win business from Skype's SkypeOut service for outbound calls by undercutting its rates. Viber took on Skype from another direction, offering an application that allows iPhone users to call each other free over Wi-Fi and cellular data networks. And magicJack, building on the success of its USB device that plugs into Internet-connected PCs to provide free calling between users and cheap outbound calling to the PSTN, ended the year by introducing magicTalk, which brings the same capabilities to users on computers, smart phones and ipads. The VoIP world has clearly reached a turning point when new players enter the market attempting to disrupt the VoIP company that made its name as the premier disrupter of traditional telephony.


24) The Skype IPO

Skype's filing for an IPO, combined with similar moves or expectations on the part of several other big high-tech names, helped revive hopes for big tech-sector payoffs in general. Once again, the influence of the company that seems to be everywhere outdistances its actual commercial impact. The excitement surrounding the planned offering also illustrates the extent to which VoIP has advanced from being a low-profit, marginal business to one with – at least in the eyes of investors – huge future revenue potential.


25) Adding Premises Option to Cloud Offering

This year's list ends with a small development containing a big lesson. Colorado-based business VoIP provider IP5280 Communications has added a premises-based option to its cloud telephony offering. The option makes it easier to handle certain data-intensive activities like recording calls without clogging up excessive bandwidth. The lesson is that no single approach works best in all cases. That is, when it comes to VoIP, flexibility should be the iron-clad rule.


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Resources

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Reports

  • Choosing the (Near-) Perfect Cloud Video Conferencing Solution
         This 7-page buyer's guide gives SMBs the information they need to choose the cloud-based video conferencing service that fits their needs. As a for-purchase download priced at $9.99, this document avoids the conflicts of interest of papers and guides that are offered for free, or sponsored by, vendors and service providers. Instead, it provides the kind of objective and authoritative information that would otherwise require assigning a staffer to spend days or weeks searching out and evaluating.

  • SMB Video Conferencing: Getting Beyond Clouds & Interoperability
         This 31-page VoIP Evolution report provides an in-depth analysis of a market that has suddenly become very competitive. It identifies and dispels some of the misconceptions that have become part of the conventional wisdom surrounding SMB video conferencing. Chief among these are unrealistic expectations regarding the cloud approach and interoperability.
         The report provides an innovative approach to analysis by illustrating that these issues are just two of many important factors that differentiate solutions from one another. The report surveys 10 Companies to Watch and compares 16 cloud solutions using a unique Differentiation Matrix that clarifies their strengths and weaknesses.

  • Voice Over LTE: More Pitfalls Than Promise for Now
        This 18-page Heavy Reading Insider report, written by Robert Poe, analyzes the prospects for delivery of voice calls over cellular networks using LTE (long-term evolution) 4G wireless technology. Operators are originally looking to use LTE mainly for mobile data services, since a number of technical issues make delivering voice traffic over LTE complicated. The report describes the various options available to operators, and explains why they are likely to move to voice over LTE later rather than sooner. Information about the report is available at Heavy Reading 4G/LTE Insider.

  • Making HD Voice Happen: Choosing Codecs, Connecting Islands
        This Heavy Reading Insider report by Robert Poe evaluates the impact HD voice will have on voice services providers ranging from traditional telcos to cable MSOs to cellular carriers to VoIP operators. The 20-page report also analyzes the role vendors' and providers' choices of codecs will play in ensuring that HD voice services can be delivered end-to-end, rather than only within individual providers' or enterprises' networks. It also surveys the HD voice efforts of 14 vendors.
        Information about the report is available at Heavy Reading Insider. A column about the report is available at Light Reading.

  • Disruptive VoIP Services: What Carriers Need to Know
        A report by Robert Poe for Heavy Reading, analyzing the innovative VoIP services with the most potential to disrupt the telecom services market over the next three to five years.
        The 57-page report describes the changes VoIP innovation brings to telephony models, practices and concepts. It identifies 17 categories of potentially disruptive VoIP services, and analyzes their potential impact on the market. It also profiles 50 potentially disruptive companies and services.
        Information about the report is available on the Heavy Reading Website. Coverage of the report is available on the Light Reading Website.


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