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December 14, 2007

What's in Store for VoIP in 2008?



      Phil Hill, Co-Founder, President, Vocalocity


The Year of the Rat could bode well for VoIP.

2008 is the Year of the Rat in the Chinese Zodiac. Far from being the sewage-rummaging rodent
westerners typically associate with the word rat, in Chinese culture it’s a respected creature thought
to bring protection and material prosperity. People born under the sign of the rat are considered to
be energetic, versatile, and able to overcome obstacles.

Come to think of it, versatility and the ability to overcome obstacles are qualities VoIP may indeed
share with the Rat. What other rat-like qualities and behavior will VoIP be demonstrating in 2008?
Here’s a take on what’s in the cards.

Mobile VoIP to Gain in Notoriety
While VoIP continues to disrupt the land line telephony industry, mobile VoIP is poised to do the
same in the mobile sector. In fact, research firm Disruptive Analysis predicts that the number of
VoIP over 3G users will top 250 million by the end of 2012. The iPhone phenomenon will contribute
to this growth when Apple launches its much requested 3G handset towards the end of the year.

In 2008, the spotlight will shine on VoIP going mobile thanks to the introduction of new applications.
We’ll see a slew of new “feature”-based mobile VoIP companies in the market. Center ring will be
Google’s Android, with its new open source mobile platform, and the application bonanza the
company hopes to stir up. As part of its Android announcement in November, Google issued a
challenge to developers to create applications for the operating system. The ones showcased by
Google themselves looked remarkably “Applesque.” Case in point: the iPhone map feature. But we’ll
see life move beyond all things geographical.

As well as bidding on its own mobile airwave, Google will also partner with other select wireless
carriers — T-Mobile springs to mind — to bring the Google open platform to market. After all, they
don’t really want to win the bidding war, do they?!

eBay Will Sell Skype to…
According to the Internet rumor mill, eBay is quietly shopping Skype. Has Skype been little more
than a distraction to eBay’s core auction business? While some may argue that Internet
communications is an important capability for online auctions, it’s not the essential value proposition
that PayPal represents. The anticipated synergy between Skype and eBay simply failed to
materialize.

The writing is on the wall. The company has struggled this past year to monetize anything in the
Skype world and its creator and leader has moved on to new pastures. So if the reports are true,
potential buyers could be lining up for a shot at Skype. Yahoo or Microsoft would be strong
contenders. Or Google maybe? I say no to Google. They’ve hung their hat elsewhere in the mobile
world.
Vonage and the Fight for the @home VoIP Market
The Year of the Rat could be auspicious for Vonage if it helps bring prosperity and the ability to
adapt to any situation to survive. Hopefully, the company will be spared any more rounds of legal
pasting from Verizon.

As for the rest of the market, VoIP will continue its push into the home with the big cable guys
bulldozing over all in their path. This will spell a culling season for any of the lingering small VoIP
pretenders. The big telcos, AT&T et al, will carry on tiptoeing through the VoIP landscape and
cringing at their eroding margins. I can’t see them really getting their game together in the small
business market to any extent next year.

The SME Battlefield – Look out for the Big VoIP Pretenders
Those hungry cable guys will also be eyeing the small business market and salivating as they try and
broaden their reach. However, they’ll find the SME market to be a different can of worms compared
to the consumer market, with greater complexity in getting the VoIP technology up and running and
a higher degree of hand-holding needed.

That’s my take on VoIP industry predictions for 2008. Long live the Rat!


About The Author
Phil is an experienced entrepreneur in the Internet space and has over 10 years experience building
and developing businesses, including start-ups and established operations. Now co-founder and
president of Vocalocity, a hosted PBX provider for micro enterprises, he was a co-founder at Netzip,
which was sold to Real Networks in January 2000 for $267million after it created the de facto
standard for downloading media files on the Internet. After the sale he assumed the role of VP
Marketing at MusicNet, a wholly owned subsidiary of Real Networks, where his team innovated some
of the first legally deployed music subscription services which are now in use by Microsoft, AOL and
Yahoo.

About Vocalocity
Vocalocity is the leading provider of Voice over Internet Protocol (VoIP) communication services to
micro enterprises — companies with fewer than 20 employees. Vocalocity’s core offering,
VocalocityPBX, is a hosted service providing customers with the quality and reliability of traditional
PBX phone systems, with more features, flexibility and cost savings. For more information about
Vocalocity, visit the company’s Web site or call       678.528.9000  .

				
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