Wednesday, May 25, 2005

VON impressions, et al

Other commitments brought me back to London after my presentation at VON, so here's a summary post about yesterday in Stockholm and a bit of related newsflow.

  • Turnout looked very strong to me. I'd guess there were about 400 people in the main sessions in the morning, peaking with Niklas Zennstrom's SRO presentation (Jeff later informed me that the room held 600, and there was an overflow room next door with a video feed from the main room).
  • Presentations were, as to be expected, a bit of a mixed bag, though most touched on common themes of transparency, ease of use, and the essential need to understand consumer thinking and needs.
  • It seems like some presenters believe they need to chart the history and future evolutionary paths of a variety of technologies in order to have a discussion, which takes up a lot of time and leads to needless repetition. Personally, I'm tired of looking at network layer diagrams.
  • Jeff Pulver and Niklas both, as usual, touched on a number of interesting issues, familiar to readers of this bloglet or those who have seen them present elsewhere.
  • Both spent a considerable amount of time on regulation issues. I have been concerned for some time that Skype has a rapidly increasing risk profile in terms of regulatory creep, and this issue is now being taken up vigorously by Om and Martin. I'm not sure how convinced the audience was by the "if a burglar were in my house I'd want to IM the police, not call them" argument employed by Niklas, but he obviously has to fight his corner.
  • My presentation was the usual mix of cheerleading and predictions of imminent doom.
  • Part one was an overview of where we are today, and why the industry (such as it is) can feel justifiably proud of its achievements. "VoIP" returns more hits on Google than Elvis Presley, Paris Hilton or Our Lord, and Skype is bigger than the Beatles. Combined access-related VoIP subscribers, access independent subs and Skype users in France and Germany leads to a raw penetration rate of around 30% of the addressable markets in those countries (not adjusting for any double-counting). In Europe there is a direct correlation between broadband penetration and Skype user numbers, with countries like Sweden, Switzerland, and Denmark boasting Skype user numbers which seem to equate to 25 - 30% of broadband users. Five of the top ten Skype user countries are in Europe, which is interesting in light of the fact that Europe accounts for less than a third of global broadband user numbers. Norway may be VoIP's single biggest success story to date, with Telio subscribers accounting for more than 1% of the population of the country, and 7% of broadband connections. Putting Vonage US on the same penetration level would give it about 3.5m subs. Lesson - innovation from the edge works and there's room for everyone to compete.
  • That was the Woodstock interpretation. The Altamont version of the story is that incumbent complacency has ended, and the PTTs seem to be speaking more frankly and raising their game. From my perspective, this quarter there was a palpable sense of crisis which has not been so present before. This spells danger, particularly as the EuroTelcos seem to regard IP as the new catalyst to drive M&A activity, and a buzzword to wow the capital markets. I gave the examples which have been repeatedly documented in this blog. I also spent some time discussing the fact that I wouldn't expect the IM incumbents to roll over and die, as Yahoo! recently demonstrated with its newlook client. I later met a member of the audience from MSN, a nice guy whose business card identified him as a key player in "Voice Services." (Only last week I got to rub shoulders with another nice guy from AOL UK, who left me with the distinct impression that EuroTelcos may underestimate this company at their peril, a point I have made previously.) Suffice it to say that, as far as I can see, the IM platforms in Europe generate similar levels of daily usage to that of Skype, but they are much larger user bases, and also part of a broader strategy. It would be naive to assume that they are not sharpening their knives for something more aggressive. I also discussed brand extenders like Man U and Chelsea, which ostensibly have radically different agendas in the broadband world. After this downbeat assessment, I closed with some challenges/opportunities, in terms of more granular and intelligent presence, closer integration with consumer activities (customer websites, online gambling, online gaming, the ego-casting arena, etc.) and devices. All familiar stuff to anyone who has read this blog previously (or one of the many sources which inspire me).
  • Other observations - I seemed to see a lot more incumbents present than I have previously, and I also had the sense that this was part of a stepped-up effort to assess the real issues in the market (back to my earlier point on complacency rapidly being a thing of the past). I was also amazed to see that there were no sell-side analysts there, at all. It increasingly occurs to me that there is potentially a viable research model involving strictly industry events such as this one, because the chances to meet key people in operational roles are numerous, and there is a lot of interesting industry intelligence flying around at all times. It's a huge chance to learn, but maybe Stockholm was too remote, or maybe the people in question are just too damned clever.

Related newsflow - I'm trying to catch up with a number of stories related to VoIP, so here goes, in no particular order:

  • Cablecom, reporting Q1 results today, has seen 24% sequential growth in VoIP subs over Q4's level. Penetration of the broadband base now stands at 44%, up from 38% in Q4 and 29% in Q3. Interestingly, sequential growth in broadband connections was stronger this quarter than in Q4 - perhaps there is some synergistic effect from VoIP.
  • KPN launched a bundled VoIP/DSL product today, initially on a limited basis. Pricing looks a little half-hearted to me. I also see that 100 new DSL subs stand to win an Xbox, copy of Halo2 and a year's subscription to Xbox Live! (now there's a real VoIP service!).
  • As I hinted briefly in a post last week, SIPfoundry yesterday unveiled their open source attack on proprietary PBXs, Microsoft LCS and Skype. Interesting to note here that fully one-third of the developer community is European.
  • As also hinted at in some recent posts, Popular Telephony yesterday unveiled its particular take on co-opting the Skype network and community, a version of PeerioBiz with Skype gateway.
  • Our friends at Paradial in Norway, which I have written about from time to time, yesterday unveilved further enhancements to the already impressive RealTunnel, including multiparty conferencing also open to external SIP clients/servers.
  • Skype launched an affiliate program, bringing Skype superdistribution to the masses as a paying proposition (I will keep my dayjob, for now).
  • Global Crossing launched European inbound and outbound services yesterday, which seems to yet again lower the barriers to entry for access-independent players in the European markets.
  • I also had a chance to catch up with Kerry Ritz, MD of Vonage UK. Try as I may, I couldn't get any subscriber numbers out of him, though he described himself as very satisfied with what they've done so far. At least one very happy Vonage UK customer was stood nearby (who happened to be a BT employee.)

No comments: