AIM "Call Out" Shutting Down

"AIM Call Out," the VoIP service offered by AOL, is shutting down on March 25, 2009. AIM Call Out allowed users to make long-distance calls from their mobile phone, landline, or through AIM, and was the successor to the original AIM Phoneline service launched in November 2007, with the intention of building not just a VoIP calling service, but one with lots of new applications created by a developer community.

In this case, the direction was solid, but traction apparently became an issue.

AOL launched an Open Voice platform, a developer's toolkit that allows developers to more easily develop products running on AOL's network. Of course, critical mass is really important when taking that approach, and AOL, like some other highly-used instant messaging services, simply wasn't able to establish that mass.

Yahoo Voice also failed to establish itself, and was sold to Jajah, for example. And anybody who has tried to build a robust third-party application development ecosystem can attest to the difficulty. Apple's AppStore has been phenomenally successful, but most of those apps are built for Web apps rather than voice.

Still, you can be sure the general approach is the right one. Lots of other contenders are using the same game plan, for the right reasons. Development of new apps requires the creativity only an open platform can unleash.

As the saying goes, "an API is not a business model." No, not by itself.

Fixya: Social fix-it Site

Fixya is a social site devoted to helping consumers fix their technology products, ranging from mobile phones and PCs to automobiles. 

Fixya is a community resource capable of providing relevant and up-to-date troubleshooting data.. 

Today, with over 12 million visitors and one million products in its database, FixYa empowers individuals to repair and improve upon their already-purchased possessions.

The company also offers business services to manufacturers and retail businesses through its custom partnership opportunities.

FixYa is a place where individuals can share real world experience and connect to provide each other practical advice. From fixing cars, to cameras, to iPhones, FixYans are part of a DIY revolution that helps empower techies, tinkerers and hobbyists across the globe.

FixYa is a venture-funded Web 2.0 company with offices in San Mateo, California. 

Toktumi Business VoIP Service

Toktumi offers a business IP telephony service costing $14.95 a month without contracts, activation fees,  termination fees, equipment to buy or per-minute charges. 

Click the graphic to see a large version of the comparison Toktumi provides.

Toktumi offers a dedicated number local number, an 800 number, or a ported existing number.

Features include call waiting, call transfer, caller ID, call forwarding, auto attendant, as well as a second number for a mobile phone that allows users to place and receive calls on mobiles using the Toktumi number. 

Instant conference calls for up to 20 people, including call recording, visual voice mail, customized greetings  for business and personal callers and PC-based calling are included. Directory-based dialing, unlimited calling, call forwarding, and conferencing to U.S. and Canadian numbers as well as other Toktumi users worldwide also are included. 

International calls cost $.02 per minute for calls to destinations including China, Italy, and the United Kingdom.

Windows IP PBX in 10 Minutes?

Hak5 claims a Windows based IP-PBX can be set up in 10 minutes using software by 3CX. You might wonder why somebody who is fairly technical and in the "do it yourself" mode would not choose to use Asterisk. The answer is that some people will be able to create the functionality in Windows faster than they can using Linux.

Apparently 3CX offers a "free" download and then incremental payment for features such as unified messaging or call parking, for example. Hak5 reports the auto-provisioning to a Linksys Linksys SPA962 IP phone was flawless.

It's just another example of a sort of inversion of value in communications, where important communications functionality and value are very low cost, despite providing high value. It is conventional--and largely correct--wisdom that value is "moving up the stack."

That does not mean "pipes" and "infrastructure" such as call control are unimportant. People might not think electricity is unimportant, but watch the disruption when it suddenly fails. Still, even carriers and service providers increasingly are facing issues familiar to people working in the software business: lots of really valuable utility now is widely available at low cost.

So businesses have to built on incremental value using the still-essential but "utility-like" infrastructure. It's something like a million lines of code becoming an inexpensive foundation and value and revenue built on new apps that might, in some cases, require only scores of lines of additional code.

Setting up 16 phones took about two hours, including a firmware upgrade, Hak5 reports. Basic user maintenance apparently is simple enough that administration can be turned over to people who aren't IT staffers.

"I really would suggest anyone with a Windows machine lying around the house who has a need for a basic PBX for use with either a VOIP provider, or a PSTN gateway look at 3CX," says Matt Lestock, Hak5 contributor and a systems architect.

The analogy is the "freemium" business model, where basic and valuable features are offered "at no incremental cost" and fees support enhanced features.

Communications, Not Entertainment or Shopping, Now Dominates Online Use

As conventional wisdom has it, entertainment, rather than voice and data, will drive the communications business in the future. But recent research by Netpop suggests that even in the online world, it is communications, not shopping or entertainment, that drives usage.

Netpop | Connect Social Networkers 2008 Teaser

View more presentations from Netpop. (tags: advertising marketing)

Wireless Industry "Collapsing"?

Mobile subscriber penetration in the U.S. market is nearing saturation, no doubt about it. But it seems wildly wrong to maintain, as does Craig Moffett, Sanford C. Bernstein &  Company analyst, that “this industry is collapsing”

Slowing subscriber growth will lead to devasting price wars, he believes. To be sure, analysts always are worried about price wars. But "collapse"? Slowing subscriber numbers are a fact. But so is higher average revenue per user. 

Moffett notes that in 2008, wireless carriers added 5.9 percent more subscribers in the United States,  but he thinks they will add only three percent this year. A reasonable assumption, many might agree.

“The fourth quarter saw the lowest growth rate ever for the U.S. wireless industry,” Moffett notes. And yes, that is what happens in a maturing industry, at least on the subscriber front. But Moffett always seems to be more bearish on virtually all telecom companies than on cable companies, which also are losing video customers, though growing voice and broadband accounts. 

Small Business: TARP Failing

Small business customers are a key customer segment for many service and application providers, as they often are more willing to make faster decisions about new communication services and software.

To the extent that firm growth is a direct driver of software, hardware and communications activity, and given that up to 85 percent of new jobs are created by small businesses, perhaps somebody should be listening to them.

A survey conducted in February 2009 by online payroll service SurePayroll found that most small business owners feel the government should be taking a different approach to boost the economy during tough times.

Nearly three out of four small business owners disagree with the way the U.S. government has allocated funds in its Troubled Assets Relief Program (TARP), and believe tax cuts would be the ideal solution.

TARP was deemed effective by only three percent of respondents, while 72 percent were clear on their disapproval and 25 percent did not have a strong opinion.

BlackBerry App World Launches: Implications for Service Creation, Business Models Clear

Research In Motion has opened its new online application store, called BlackBerry App World, according to UPI. BlackBerry App World accepts PayPal for payments and starts prices at $2.99. That move might be an effort to screen apps for quality, something some believe is an issue for Apple's AppStore.

Price options also run up to $999, suggesting RIM will push high-end downloads through the store. To access the store, BlackBerry users will need to have a least a Version 4.2 operating system on their phones.

RIM appears to be negotiating back end revenue shares with vendors of applications that generate revenue through advertising or other means. It’s unclear what the share is, but language in developer contracts suggests that a revenue share is part of the model, Alec Saunders, Iotum CEO, notes.

The broad emergence of app stores, distributing or selling a wide variety of entertainment, utility or business apps, mostly Web related or data related rather than voice related, does raise some questions about the voice "service creation environment."

It is becoming possible to assemble apps rather than "create" them, using open and loosely-coupled processes. The problem would seem to be that "assembled" apps more nearly resemble the old "over-the-top" or loosely-coupled model rather than the high-availability, vertically-integrated model that has in the past been typical of voice applications.

There are obvious business model implications. Independent software developers and device manufacturers obviously participate in the revenue stream. It is less clear how access providers participate, and, if so, to what degree.

The longer-term implications are equally momentous. Up to this point the bulk of revenue has been generated by using "big iron" or "big code." And that might continue to be true for quite some time. Value, though, increasingly is realized by assembling new apps using building blocks essentially abstracted from the "big iron" or "big code" platforms.

That isn't to say that incremental "value" is equivalent to "revenue" in a linear way. Still, it is hard to see where the trajectory leads. To some extent, access, transport, computing, storage or basic features are--though not commodities--perhaps viewed as "table stakes." The new applications, though creating relatively small amounts of revenue, increasingly are viewed as the "secret sauce."

For service providers, there's a sort of inversion of value here. Most of the cost and even the value is provided by the basic infrastructure and connectivity. Yet the "sizzle" is coming from the new apps that represent little incremental revenue. The good news is that given enough sizzle, it will be easier to keep users using the "basic" features.

Broadband Stimulus Meeting in Washington March 10

The National Telecommunications & Information Administration is holding a meeting March 10, 2009 in Washington, D.C. on the "broadband stimulus" provisions of the "stimulus" bill. Click "related article" for details.

Separately, Mark Seifert, formerly with the Federal Communications Commission, has been tapped to head up the policy side of the NTIA's allocation of broadband stimulus grant and loan money. Bernadette McGuire-Rivera will be handling administrative duties.

Representatives of the NTIA, the FCC and the Ag Department's Rural Utilities Service are meeting next week to talk about how to hand out $7 billion-plus set aside in the Obama administration's economic stimulus package to provide Internet to un-served and underserved areas.

VMWare Cloud Computing Initiative

VMware has released its new Virtual Data Center Operating System (VDC-OS), software that creates an on-demand computing capability integrating computers, storage devices, and networking equipment.

"Virtualization," the ability to partition storage so more apps can  be run on fewer servers, used to be a topic computing staffs and storage suppliers were interested in. These days, it is beginning to be interesting on a wider scale, to more enterprises, developers, content, software and service providers because of the way whole computing infrastructures now are capable of "virtualization."

The software, due later in 2009, reflects VMware's push into cloud computing, essentially a virtualized data center. By making the leap, VMware joins Microsoft, Google and Amazon.com as providers of cloud computing infrastructure. 

The world's next generation of software may well hinge, in large part, on use of cloud-based computing, especially for high-volume Web-based applications. 

Hal Varian: Data is Cheap, Ubiquitous, So Value Lies in Meaning

More than ten years into the widespread business adoption of the Web, some still fail to grasp the economic implications of cheap, ubiquitous information and communications and modular, open software. But executives are learning fast precisely what the implications are.  

Inside enterprises, ubiquitous information is reshaping and flattening organizational structures. In the broader economy, retailing and distribution processes are transforming. 

The impact is perhaps nowhere more startling than in print media, music and pre-recorded video, where value is so much altered that some distribution channels are being destroyed, others merely reshaped. 

For communications providers the changes are less direct, if no less challenging. Value and revenue now are shifting inexorably towards "data" experiences rather than simple "voice." But data experiences are precisely where loosely-coupled software, hardware and communications change value contributions so much. 

In a broad sense, the global telecom industry is going to have to learn to do what others are being forced to do: assume an environment of cheap, ubiquitous "things" and learn to create value by extracting meaning and usefulness out of those ubiquitous things. 

Global Telecom Dip in 2009 to Reverse in 2010, Climb for 4 Years

Analyst Simon Sherrington says global telecom capex is set to decline by about 0.7 percent in 2009 to around $297 billion, with steeper declines in mature markets such as the United States and Western Europe offset by investments in growth markets such as China and India, and regions such as Africa and the Middle East.

But the contraction should be short-lived. Sherrington forecasts an increase in global spending in 2010 and in the following three years, with the global capex total hitting $350 billion in 2012.

By the Time the Broadband $ is Spent, It Won't be "Stimulus"

For all of the interest companies now are showing in the $7.2 billion broadband access spending that is supposed to happen as part of the "stimulus" package, it is possible the only people who will "get" any incremental money any time soon are lawyers and consultants who claim they can help clients get some of the money.

A large percentage of the money for broadband in the stimulus package won't be spent until 2011 or later, says Jeffrey Eisenach, chairman and managing partner of Empiris, an economic consulting firm. The money, split between the U.S. National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) of the U.S. Department of Agriculture, will go out in the form of grants, and neither agency is currently set up to allocate billions of dollars, he says.

"In 2014, you're not going to need stimulus in this economy," says Robert Atkinson, president of the Information Technology and Innovation Foundation, a tech-focused think tank. "There's a sort of half-life for stimulus spending."

Blockbuster Defies Expectations

The conventional wisdom is that Blockbuster's business model is the equivalent of "toast." In fact, fears of an impending bankruptcy filing caused shares to fall as much as 86 percent early in March, as a result. 

But Blockbuster says domestic same-store sales increased 4.4 percent in the fourth quarter of 2008, representing a 5.3 percent increase when compared to a decline of 0.9 percent in the same period in 2007. 

The increase in same-store sales was comprised of a 2.6 percent decrease in domestic same-store rental comparables and a 36.5 percent increase in domestic same-store retail comparables, which was largely driven by increased sales of games, game merchandise and consumer electronics.

For the full year of 2008, Blockbuster achieved a 6.4 percent increase in domestic same-store sales, compared to a decrease of 6.9 percent in 2007. The 2008 domestic same-store comparables included a 1.2 percent increase in domestic same-store rental comparables and a 37.4 percent increase in domestic same-store retail comparables.

Companies and executives frequently manage to outperform conventional wisdom, and it appears Blockbuster has done so. 

Mobiles are Disruptive to Ad Business

Media and advertising professionals say the pullback of ad dollars and mobile devices becoming personal computers are the most disruptive forces in media today, according to a recent survey by KPMG LLP, the U.S. audit, tax and advisory firm. With media time and spending seen moving away from traditional channels, attention to social media and mobile consumption is expected to increase.

In polling more than 200 media, marketing and advertising executives, KPMG found that 49 percent of respondents indicated that the pullback of advertising dollars is the most disruptive force in media today, followed closely by mobile devices becoming personal computers (40 percent).

The KPMG survey also found that some 75 percent of executives predict that advertisers will move more than a quarter of media time and spending away from traditional channels in the next five years, while social networks and mobile marketing are expected to see increased activity.

While the marketing and branding power of social networking is expected to be increasingly harnessed in the future, 61 percent of executives indicate that fewer than 30 percent of ad agencies have a plan in place to leverage the medium for their clients.