Cisco Makes Big Move into Cloud Computing

Cisco has undertaken a major new initiative in the unified communications space, introducing a new architecture for its former WebEx Connect service, making Cisco a provider of Web-based productivity applications including email, instant messaging, voice, calendaring and virtual whiteboards.

The offering is part of Cisco’s Software as a Service (SaaS) platform and is part of a vision Cisco now has for "everything as a service." Predictably, the initiative has pundits touting Cisco's new move to compete with the likes of Google and Microsoft in Web-based services and applications. The strategy has elements of that, to be sure. But that's almost a by-product of the larger move towards cloud computing services that use a browser front end as the portal to services and applications of all sorts that once were delivered using physical media and local storage. 

Cisco says Verizon Communications is an initial partner, and that further deals are expected with European and Asia-based service providers as well. Cisco executives say business models might vary from carrier to carrier, but that subscription fees will drive the retail offerings and carriers will share in that revenue. 

Though initially services are expected to be consumed by PC users, the service also will be made available to "most" mobile platforms by the first quarter of 2009, including support for Symbian, BlackBerry, and Windows Mobile

operating systems.

EC Wants to Slash Texting Rates 60%

The European Commission, as expected, has proposed a new law slashing international text messaging rates by 60 percent by the summer of 2009. Specifically, the EC has proposed a retail cap of €0.11 (about 16 cents), excluding value-added tax, on roaming text messages, combined with a €0.04 cap at wholesale level, to be introduced by July 1, 2009. 

Tracfone Plumbs a Niche

TracFone Wireless Inc. has launched a program in Florida that provides low-income households with phone service. SafeLink Wireless will operate as part of Lifeline, a U.S. government-supported program providing phone service for low-income households.

It provides households a free mobile phone, mobile access to emergency services and 68 minutes of free monthly air time for a year. The cell phone offers in-demand features like voicemail, text messaging, call waiting, international calling to over 60 destinations and caller ID.

Families may qualify for SafeLink Wireless service if their household income is not above 135 percent of the federal poverty income guidelines, or if they receive government assistance that including Medicaid, food stamps and other programs.

The program is yet another example of a niche voice service that does not fit the classic definition of a "commodity." That is to say, this particular voice application is not a functional substitute for other voice products, but rather a particular implementation of voice that is the foundation for a vertical revenue segment within the broader market. 

Some providers of voice services for retailers would probably note that very little outbound traffic or features typically are used in such settings. Most of the value is provided by inbound calling features such as automated attendant and call transfer, for example. Low-cost mobile service might be part of the reason. But part of the reason for this use pattern is simply that many retailers do no outbound telesales. They simply wait for customers to walk in the front door or call. 

Restocking functions might require some outbound calling, but in many cases local distributors supply that function, so "long distance" is not required. 

The point is that, in actual practice, there are all sorts of real-world use cases for voice communications that do not fit the classic definition of a "commodity," with the implications that typically has for pricing, conditions of use and packaging. 

Xohm Launch Slips to October

Sprint Nextel will launch its Xohm mobile WiMAX network Oct. 8 in Baltimore, the company says. But that doesn't mean we should expect a full commercial launch. Initially, the network will be used by "friendly" partners such as Intel and other Xohm partners who will seed the market with selected friendly users. 

Motorola, Nokia, Nokia-Siemens Networks, Samsung, ZTE, ZyXEL, Ciena, DragonWave and Mformation also will be providing software, hardware and applications during the test period. 

Future service will launch in Chicago and Washington, D.C. as well. Aside from the normal shakedown issues, backhaul has been a key issue, and carrier Ethernet is a key technology for solving those problems.

T-Mobile Drops 1 Gbyte Monthly Cap for G1

Facing huge criticism about its 1 Gbyte monthly cap on 3G access for the G1 Android phone, T-Mobile has decided to lift the cap immediately and is reviewing its options for a permanent plan. But T-Mobile now is saying it has removed that limit while it reviews its plans and decides on new ones.

T-Mobile is likely to come up with a plan that still accomplishes the goal of shaping traffic, when necessary, to maintain reasonable end user experience at times of peak load, especially when some very-heavy users are placing unusual stress on the radio network.

Consumer pressure does work. T-Mobile knew it had a problem and is taking steps to ameliorate it.

U.K. VoIP Declines?

The number of U.K. VoIP users has fallen in 2008, according to research conducted by Ofcom, the U.K. communictions regulator. Ofcom suggests this is in part because of consumer resistance, and in part because the cost of using mobile or traditional fixed line services is falling.

The majority of broadband users still choose  not to use VoIP, perhaps because of issues over VoIP quality of service or

because of competition from low-priced fixed and mobile telecoms services, Ofcom says. 

Though VoIP often is marketed as a cheap way to make international calls, the cost per minute of making international calls over fixed and mobile connections continues to decline, while use continues to grow. With flat rate tariffs becoming an increasingly prevalent component of both fixed and mobile tariffs, the incentives to use VoIP services are decreasing.

Ofcom traditionally has included Skype and other "over the top" services in the VoIP category, so it isn't exactly clear what the findings might mean. It is doubtful what Ofcom means is that telco or cable-provided voice replacement services are declining. Most likely, Ofcom has found evidence of lower use of Skype and other IM-based calling apps. 

PC Buying Down, Outsourcing Up

Corporate PC purchasing continues to weaken, according to the latest ChangeWave survey, and will remain sluggish for the remainder of 2008. For the third-consecutive quarter, we're seeing a drop in corporate PC buying going forward. 

About 68 percent of IT executives surveyed  say their company plans on buying laptops next quarter. About 67 percent say their company plans to buy desktops. 

Applications and infrastructure outsourcing, though, is proving a stable element in an otherwise tough enterprise information technology environment this year. It appears hardware and software projects are bearing the brunt of the cutbacks, as "demand for services holds steady," says Forrester. 

About 45 percent of firms plan to increase their use of applications outsourcing, while 43 percent of firms are increasing their use of infrastructure outsourcing. About 43 percent of respondents said they are moving more work offshore.

 Infrastructure outsourcing also is on the rise, as convergent telecommunications and network management will be oursourced by 20 percent of firms this year, the survey finds.