The next interview brings Peter Diedrich. Peter is the CEO of Voice Services platform provider Mobivox. If that description of Mobivox strikes you as odd, that’s because Mobivox recently announced a change in their strategy – moving from a direct to consumer Mobile VoIP play, to a value added services platform for carriers play.
It should come then, as no surprise, that I had to get Peter’s thought on what he sees as the near future of the VoIP industry. A guy who just changed his company’s direction doesn’t do it for no reason. He must know somethings up.
Let’s take a look at just what that may be…
Peter, Mobile VoIP was one sector of the industry that really took off in 2008, what sector(s) do you think will take off or see tremendous growth in 2009?
In 2009, I am not sure that we are going to see the kind of explosive growth in new companies and new innovation we’ve seen in the past few years, given the current global economic climate. That being said, I believe that in the mobile VoIP space and VoIP sector overall, a trend toward consolidation will begin in earnest as investors hunker down and make tough choices and companies look to ensure long-term viability and differentiation of services delivered. VoIP generally should benefit from the cost advantages brought about by several years of innovation.
So then who are the VoIP companies to watch over the next six to twelve months? Who will have the hottest products and or will be releasing the most innovative or game changing services?
The products and services predictions are best left to the analysts, in my view. However, I am on record as advocating for a move in the VoIP arena from low-cost calling and minutes to higher-margin value-added services and applications. At Mobivox, we moved our business to a platform play versus building a B2C business further because we have to be very good at one thing and our greatest strength lies in our feature-rich, flexible mobile voice-services platform. Other companies in the space – be they in infrastructure, software or hardware, or services – will definitely have to make similar choices, while partnering to fill gaps or enhance distinction. Companies that focus in these ways will have the best chance of ensuring enough market attention – and differentiation – to be worth watching.
What consumer and or business market segments or verticals are the looking the most attractive for VOIP companies over the next six months to a year?
In the VoIP services space that we address, the mobile consumer and mobile professional will continue to be attractive targets, but good marketing and sub-segmentation will be required to create value. At Mobivox, we see CRM techniques as particularly critical in extracting profitable revenue from these segments. The problem is that customer relationship management (CRM) in telecoms has been, well, interesting, to say the least. As a consumer of these services, I get a bill, an SMS or email if I haven’t paid the bill on time. … Maybe a bill insert or a “personalized” billing message to purchase something else. … And the pleasure of surfing a labyrinthine service-provider website to try to find answers to service-related questions. If I have a problem, I have to call customer care — another adventure.
Imagine if every time end users access a platform, they ”talk” with a personalized and partner-branded voice assistant. Placing a call, creating an entry in the hosted address book, dictating and sending an SMS or email message, or conferencing are all done through a voice assistant. In essence, a natural dialogue with the customer is created. This in effect presents an opportunity to ”talk back.” The tools for an effective and innovative Voice CRM strategy appear to be there. For starters, extensive customer information, actions and usage behaviors are regularly collected into the platform. As a result, an opportunity to deliver tailored, non-intrusive messages – for example, thanking users for making payments, highlighting new features or offers, or even doing short and simple customer-satisfaction surveys – presents itself any time a customer uses the service. This type of service innovation will be a key profit enabler for a VOIP services provider in any attractive market segment – even in a downturn. That’s where we’re taking our platform, Mobivox|PL.
That certainly would make voice more interesting for the average user. Do you foresee any sizeable shifts in the type of businesses that will be potentially migrating to VoIP in the next six months to a year? Are they the same as this year or will they be different?
Given the current bleak economic climate, the transition to VoIP, whether it be in corporate communications systems like PBXs or to services providers for transport, is likely to slow a bit in early 2009 because of uncertainty, and then accelerate. The imperative for rapid expense containment will be apparent not just in consumer markets but particularly in small and medium business segments. This necessity might even be a catalyst for a stronger migration to hosted solutions like Mobivox|PL to defray capital cost in those segments and in larger enterprise-class applications. In our own go-to-market model for our partners, our scalable hosted platform solution can reduce market-entry cost and complexity significantly. Players that can offer that kind of capability on a retail or wholesale basis will certainly be well-positioned to take advantage of an expected shift – an uptick really – in VoIP adoption.
Speaking of the economy, some feel the VoIP industry will actually benefit from a recession, since consumers and businesses will be looking for low cost alternatives, while some feel that the industry will feel pain as well since many will look to put off technology and infrastructure improvements until more certain times, what’s your take?
This really depends on your place in the value chain. From the perspective of an end user – a consumer or small business – cost or expense containment is going to be a discipline. Low-cost communications offers will grow in usage. People will not change the fact that they communicate; they will change the manner in which they communicate. Low-cost solutions, feature-rich or not, should be attractive. Successful players will build scale, and subscale players will need to think about exiting or becoming part of a larger consolidated play. For a traditional carrier or challenger carrier/service provider, capital efficiency will be at a premium. If new services need to be introduced to protect market share or maintain revenues, service providers will require the absolute minimum capital investment and the rapid ramp of new revenue and profit from the investment. Those looking at going to market through service providers need a business model that minimizes capital but provides profit potential for the service provider.
Smart advice. Have any more advice for companies in the VoIP industry for the next year? What are you doing to make sure that your company continues to grow?
Laser focus on the value proposition, even if it is cost. If you are a service provider, your services mix and targeted, effective marketing are critical. New investments still need to be made to drive revenue, but they must be the right ones. If you are a VoIP-technology provider, make your customers or partners successful fast. Get them to market quickly, and help them enable their end customers to start using the technology or service quickly. And don’t be afraid to partner or mash up. It might lead to interesting new opportunities to expand the market space, perhaps dramatically.
Wow. More great advice. I hope everyone at home is paying attention. With respect to open source,with the number of platforms continuing to grow each month it seems, will open source telephony continue to grow in importance and prominence during 2009?
Open source is here to stay. It has been a tremendous enabler of innovation in the VoIP space, and Mobivox has taken advantage of it to get to where we are. VoIP service providers may build more standardization or robustness into offerings – or at least provide an easier way for users to do that. In any case, open source will continue to be a vital enabler and encourage developers to create new innovations and new value in the ecosystem.
Do you think 2009 finally be the year that Unified Communications see a big “adoption rate” increase?
Unified Communications has been looking for a catalyst for some time. It may now be at hand, and it’s voice. Take a look at how voice activation to initiate, manage and control communications has been deployed on Mobivox|PL. There we’ve deployed multiple languages. In the Mobile VoIP space, Voxbone has enabled platform players like us and our partner Jajah to add global, one-number reachability via the iNum 883 introduction. We’ve seen an enormous response to that already in our “living lab” consumer business. Coupling voice-based user profile management with reachability virtually allows mass Unified Communications in the consumer and small-business segments. Our platform even allows users, through the power of their voices, to update their call-forward destinations on the fly. Think of it: You’ve changed your SIM card (and mobile number) because you’re roaming in Europe. With a local call to our platform, you can update your mobile number and start receiving iNum inbound calls from anywhere and anyone who has that number immediately without visiting a website. I expect when our early partners get this to market in 2009, the combination of voice-activated communications and a single global number could prove to be the catalyst for which we’ve all been waiting. It really makes the calling-card segment look very vulnerable from a viability perspective. Mobivox is not only at the forefront as an early innovator and catalyst, but we are also squarely in the sweet spot to benefit from this trend.
Peter, any parting shots?
We have seen a lot of innovation in the VoIP space over the past several years, in the hardware and software areas, as well as in services. That will continue, no doubt. The trend toward consolidation in the infrastructure markets that started a while ago will continue. With no IPO markets in sight for 2009 and maybe 2010, we can definitely expect M&A to pick up again. With VC and private equity also hampered by unpredictable capital markets and credit availability, M&A will be the exit of choice for small and medium players, too. Growth capital will be hard to come by. This consolidation game will take off and accelerate in the VoIP services segment. I think Mobivox will be well positioned to be an M&A partner or an attractive target as we launch our partners in the market and prudently expand the capabilities of our platform. I would like Mobivox to be a consolidator, but with all the moving pieces in the VoIP and telecom spaces, it is even hard to know whether the establishment players will be consolidators or consolidated. We will need to endure the Chinese curse of “living in interesting times” for a little while yet.