CopperCom SoftSwitch Sales Halted

CopperCom is getting out of the softswitch business, says Light Reading.

Light Reading says CopperCom CEO Julian Thomson says CopperCom "will no longer market the CSX, CopperCommander, and Switchmaxx/VoiceMaxx product lines."

The decision was "primarily due to a lack of demand for our products," Thomson says. "We looked at our forecasting, our market sizing, and so forth going forward, and the demand simply wasn't there."

While competitors stand to benefit from one less softswitch vendor in the market, Light Reading says the effect of CopperCom's demise will be minimal because the company hasn't been actively competing in the market for some time.

One might note that the softswitch market is a bit smallish for the number of suppliers. Infonetics data shown above.

Vonage Outage

Users of Vonage's internet telephone service have been reporting a major service failure, ongoing since Friday. In some cases, it appears that incoming calls are not connecting. Vonage is forwarding the attempted calls to subscriber landlines and cellphones, but repeatedly, and late, some customers report.

An anonymous administrator of Vonage Forum, the independent discussion board where gripes were aired, reports that Vonage claims to have resolved the issue this morning, but users continue to report problems.

Vonage can ill afford such lapses, to say the least. Not when its advertising emphasizes how reliable the service is. Not when it faces yet another patent infringement fracas, this time with Nortel. Unfortunately, nobody in the VoIP space benefits much (competitors might enjoy Vonage's travails to an extent) when VoIP has these sorts of issues. Sooner or later, everybody is going to do VoIP, and the residue is going to cling to all the other providers when that happens.

Qwest Plans No Major Acquisitions or IPTV

After completing a months-long stratgic review, Qwest Communications essentially has decided to "stay the course." There will be "no major shifts" in Qwest's basic approach to the market.

People shouldn't expect major acquisitions or a massive move into IPTV, for example. Instead, Qwest seems to be focusing on a balance between capital investment and shareholder return issues, such as reducing debt load, buying back shares and supporting the payment of dividends.

Partnerships are the way Qwest will provide new services in areas such as video and wireless. That's good news for Sprint, who provides Qwest mobility services, and DirecTV for video entertainment. It also means Qwest will be receptive to other partnerships as well.

"We are looking at partnerships to help us with offerings in the home," Mueller says. "Partners will be a huge part of our success, going forward."

But Qwest will not be looking to make major acquisitions, or dramatically change the rate at which it invests in broadband access, undertaking a major fiber-to-home initiative, for example, though it is increasing its "fiber-to-node" efforts in a relatively controlled way.

Qwest expects by 2011 to increase its broadband penetration to increase from 23 percent to 40 percent, with higher access speeds and a nominal increase in operating costs.

The fiber-to-node deployments are not, Mueller emphasized, related to IPTV, but rather to data services. "Qwest doesn't have the scale" for that, Mueller says.

But fixed-mobile products will be launched in late 2008, to leverage the broadband access investments.

Overall, Qwest will attempt to balance capital investment with returns to shareholders, as one would conclude given Qwest's resumption of dividend payments.

Capital run rates now set at about $1.8 billion are a "good run rate for us," Edward Mueller, Qwest CEO says. "We are trying to minimize capex where it doesn't drive growth," he says. "We will try, in the network operation, be picky and minimize capital expenditures in the outside plant where it doesn't make a reasonable return for us." There also will be a bigger emphasis on "success-based" capital investment, in the enterprise space, for example.

Qwest will focus in 20 markets, including its 10-largest markets, for the FTTN upgrades. Those upgrades might include support for gaming services rather than entertainment video, with the 20 Mbps downstream access capabilities the FTTN upgrade will support. Qwest earlier had said it would spend an incremental $175 per home passed to put the FTTN network in place for 1.5 million homes.

Qwest says it will focus its wholesale efforts on "profitable expansion," suggesting a "success-based" approach to out-of-region enterprise services. The hosting part of our business has promise, Mueller says.

90% of Software Can be Delivered Online

Eric Schmidt, Google's CEO, envisions that 90 percent of today's computing tasks can be moved online. High-end graphics processing is an example of a computing task probably not well suited to online use.

Google execs also argue that more and more computing tasks are unrelated to productivity suites. "If you're creating a complex document like an annual report, you want Word, and if you're making a sophisticated financial model, you want Excel. That's what the Microsoft products are great at. But less and less work is like that," said Google's Dave Girouard.

For now, 2.000 companies start to use Google Apps every day (most try the free version), Google Docs had 1.6 million U.S. users last month, according to Compete.com, while Gmail doubled its U.S. users to 20.1 million in November, according to comScore.

Why It is So Hard to Do Media These Days

Different audiences now prefer different media. Older users continue to be more comfortable with traditional media. For users 41 and younger, the Web makes more sense.

The Web surfing habits of boomers and over-60s are more firmly rooted in traditional media than those of their younger counterparts, according to a Deloitte & Touche study conducted by the Harris Group.

The study found that 67 percent of boomers visited Web sites after seeing ads on TV or in print. Matures, those between 61 and 75, were just as likely to be driven to the Web by print ads and less likely by TV ads.

Yet these two age groups were less likely than Generation X (25 to 41) or Millennials (13 to 24) to visit the Web as a result of an Internet search engine or ad on another site.

A Lumin Collaborative study reinforced the connection between boomers and traditional media. The company found that boomers, defined as those currently ages 42 to 62, spent an average of 2.69 hours a week online, versus 2.83 hours watching TV and 1.93 hours listening to the radio.

The trends were flipped among the echo boomers (ages 18 to 31) and Gen X (32 to 41), who spent more time online than watching TV or listening to the radio and whose time spent online also exceeded that of their boomer counterparts.

Lumin also noted that only 39 percent of respondents in the boomer demographic regarded the Internet as their primary channel of information about companies or products. This rate was substantially less than Gen X (53%) or echo boomers (60 percent).

Boomers were the most likely group to choose newspapers, broadcast TV or magazines as their main source of information.

All of which means all content has to be delivered dual mode these days: Web for people under 41. Other traditional media for users older than 41, to a certain extent. But the direction of the shift is inexorable. The Web wins.

Why Did Philadelphia Muni Wi-Fi Stumble?

The New American Foundation, a Washington, D.C. policy advocate, argues in a new report that the Philadelphia municipal Wi-Fi effort has stumbled because it opted for private operation of the network, instead of sticking with a originally-recommended non-profit model that also avoided any use of public tax dollars. The report is critical of the decision to award a construction and operation contact to EarthLink.

"An executive committee, set up by the mayor’s office and tasked to study Philadelphia’s options for building a municipal wireless network, assessed
the city’s situation and recommended nonprofit ownership of the network," the report says. But Wireless Philadelphia disregarded those recommendations," the report notes.

"Instead, WP yielded to political pressure when it accepted EarthLink’s bid to own and operate the network."

As a result, the study argues, "WP has underperformed because it de-prioritized public input and constituent interests." The report argues that WP would have been more effective if it had assumed ownership of the network."

I don't know about that. Is it not obvious that a municipal network, even one operated as a non-profit affair, requires a resource generation mechanism? No matter what entity had been chosen to build and operate the network, some way to support construction and operation is necessary, and given the restriction on tax support, some other resource would have to have been available. Donations, grants, commercial fees or some other way of securing support is necessary.

So is it reasonable to assume that even a non-profit approach would have worked? Most observers of the municipal Wi-Fi scene now agree that the resource model is a stumbling block.That is to say, people might very well want to have free or cheap access. But there does not seem to be a sufficient resource input model to support that, if taxes cannot be used.

No approach to building and operating a network can be successful if scores of millions of dollars cannot be raised to construct the network. The legal structure of the entity does not logically seem to be the key impediment here. If tax dollars are not available, some other means of securing the inputs obviously is required. The report contains no suggestion of what that mechanism might otherwise have been. And that, it seems to me, is the big stumbling block. To the extent a non-profit entity had been chosen, what would that entity have been able to do in this regard?

IT Staffing Crisis: Managed Services Opportunity

With only an estimated five million new workers entering a workforce in which twenty-five million will retire over the next twelve years, IT shops are facing an obvious personnel crisis, argue researchers at Ovum. "North American IT shops may well be facing a staffing perfect storm," says Tom Kucharvy, Ovum SVP.

Do the math: Lose 25 million; gain five million, for a net loss of 20 million IT personnel. Assuming technology and software continues to be more important in the future than in the past, it seems rather obvious that enterprise, small business and consumer technology support has to change, and change dramatically.

So is it not reasonable to assume that technology has to be made easier to use; support has to be virtualized (not delivered on site, by a technician)and software has to be delivered as a service?

Two big challenges are certain, Ovum argues. "The impending mass retirement of baby boomers will deplete staff and starve many companies of critical skills."

"Meanwhile, a shortage of replacements due to a smaller crop of college graduates and a dramatic decline in students planning to enter IT-related fields will compound the problem.

"Fundamentally reassessing the skills that will be needed over the next five to ten years rather than attempting to duplicate or replace current skills is the first strategic step companies must take immediately to address the issue," says Kucharvy.