Saturday, April 09, 2005

VoIP Phone Hype....Phooey!

I hold no ill will towards marketing, but do become offended when someone feels I should lose my critical analysis skills and buy into marketing hype.

For example - revolutionary new technology allowing 1 digit calling? Easy connect to VoIP via cell phone? Yada yada...hype & emotion... &..well you get the idea.

The way VoIP works, there are several critical aspects to insure anything close to toll quality calling. First is the instrument used. Next is the inside wiring. Assuming both of these are not a problem, the access line becomes the next major factor. Here there are 3 points. First is quality of the access line - its ability to deliver error free bit streams. Next is the bandwidth. As a shared application, the bandwidth must be sufficient to serve the needs of both VoIP and all other applications simultaneously. Third is the logical distribution of that bandwidth. In effect, the bandwidth must be split between VoIP and the other traffic to insure VoIP has a consistent available rate of communications between the premise and the POP.

Getting all of the above correct is not trivial, and those who attempt a pure plug and play approach stand a fair chance in being disappointed with their VoIP service. But let's assume this all goes well (at both ends for an end to end VoIP call). The next issue is travel over the Internet from ingress POP to egress POP. Different carriers have different paths, which impacts latency. A VoIP session is probably the most sensitive to latency of all common applications (although live video is probably the most sensitive). The carrier incentive is to keep as much traffic as possible on their own facility. This is a business need, not a technical need, but it does impact the quality of service users experience. Multiple carriers provides protection against failure, but it does not insure true shortest path routing. More important than multiple carriers is the ability and willingness to purchase priority transport of packets based on IP header information or other protocol approaches, so that a VoIP call continues as a high priority session and with sufficient bandwidth across the carrier's network.

Finally, there is the placing of calls to standard phones. This is where the PSTN gateway comes into play.

Now what parts of the total technical aspects will your service control? This is where the hype goes away and critical thinking comes into play.

Don't believe because many of us here have technical experience we lack business sense. Or vice versa.

The second issue is just how is the revenue stream divided between delivery costs, marketing, administration, and sales points? What are the volumes required for a breakeven scenario? What is the estimated market cap? Does the promised opportunity stand up to critical analysis of the business plan? Is capital sufficient to reach breakeven revenue streams? Are the processes in place to deal with service problems even if the problem is outside of your control, in order to retain good will in the market space?

Many of us are interested in a logical analysis of both the business and technical aspects. Just don't try blowing the preverbial "smoke up our butt".

Whew....I think I'll get a cold drink now.


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