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article on VoIP from our friends at Frost & Sullivan:

VoIP: A Type of Vodka?

http://www.toptechnews.com/story.xhtml?story_id=39639

By Mark Long
December 5, 2005 7:00AM


While VoIP is moving quickly from early adoption to the mass-market phase, Frost & Sullivan senior analyst Lynda Starr observed, there is some bad news. "The bad news is that the consumer mass market has different needs, requirements, and interests that weren't crucial to the early adopters with their high geek-factor quotient."

Voice over Internet Protocol, or VoIP, might be one of the fastest-growing sectors in the tech industry these days, but that doesn't mean Americans know what the term means. In a recent poll by Harris, for example, one in five think VoIP is a European hybrid car. Another 10 percent of the 1,006 people questioned by Harris said they thought VoIP was a low-carb vodka.
The lack of awareness about VoIP is really a function of how it is branded, said Net2phone senior vice president David Span, who pointed out that many companies are starting to brand the service not as VoIP but as "digital phone" or "digital voice" to make the technology more understandable.

But neither "digital phone" nor "digital voice" is really a better name, said Frost & Sullivan senior analyst Lynda Starr. "Digital has lost its panache because everything is digital these days," Starr said. "Eventually, it's all just going to be called voice, and I am looking forward to the day when we are all just talking about voice services."

Although the service is voice, and IP is the platform, users don't care what the name is, nor should they, Starr said. "They just want their calls to go through."

Name recognition is not the only problem that fledgling VoIP providers have to deal with. Span noted that 35 percent of the households that are already aware of what VoIP is still do not see it as a service that can be used with a regular telephone.


Plug and Pray?

While VoIP is moving quickly from early adoption to the mass-market phase, Starr observed, there is some bad news. "The bad news is that the consumer mass market has different needs, requirements, and interests that weren't crucial to the early adopters with their high geek-factor quotient."

One of these needs is ease of installation. For tech-savvy people, installing a VoIP service is a piece of cake. For those not well acquainted with how VoIP works, however, getting up and running with VoIP might seem like a daunting task. In most cases, it isn't.

To replace a telephone connection at home with a VoIP phone, you simply connect a small adapter to your broadband router, then plug in your phone, which can be a normal telephone. The adapter is what makes your phone work over the Internet instead of through traditional phone networks.

"Something like 95 percent of the people decide to self-install and 90 percent do it successfully," Starr said. "But the joke still is that some people don't know how to set the clocks on their VCRs. Even I would probably prefer to have the cable company come out and do it for me to be sure."

One real advantage of subscribing to a digital-phone service from the cable companies, Span said, is that you can have the phone set up for you by a service rep. "This is why many of our partners do not rely on the users to engage in plug-and-pray; they send out a technician to install it for them," he said.

Because cable companies are trying new ways to elicit monthly fees from consumers, suffering the expense of sending out a service rep to your house to set up a VoIP phone is worth it to them. "Recognizing the potential for consumer confusion, they go out to install the adapter in order to take away the need to even think about it," he explained.

Customer Support Issues

Getting VoIP into homes is not just about helping people understand the technology, said IDC analyst William Stofega. If the service providers are really going to make this a mass-market phenomenon, they will need to invest more heavily in help desks and customer support.

One major point of confusion is what is called a "softphone." VoIP providers will typically offer you a software-based dialer, called a softphone, that you can use to place and receive calls from your computer using a headset. Some VoIP services consist entirely of a softphone, while others offer both softphone calling -- for times when you are on the road and want to use your VoIP service to make calls from your laptop -- and a regular telephone that connects to the VoIP adapter.

"I do feel there is value in having a [softphone] dialer," Span said. "But when talking about completing a primary line service in the home -- which I call a replacement service -- people have the expectation of getting the same user experience that they get from their traditional phone."

While the VoIP adapters let you make and receive calls using a regular phone, the pure-softphone services do not. The softphone dialer forces you to make a change in the way you make phone calls. You must boot up your computer and put on an attached headset to use this kind of service. "Still, a softphone dialer has viability for someone who travels; it complements their home VoIP service with its telephone adapter but does not do away with it," Span said.

VoIP's Holy Grail

There could come a day, several decades from now, when regular telephone companies no longer offer traditional phone services and instead have all customers connected to broadband connections that support phone calls seamlessly through that link. One step along that path is for mobile-phone providers to begin offering intelligent handsets that can sense when they are in range of a Wi-Fi signal and automatically switch from your per-minute cellular connection to your flat-rate VoIP service.

"I think that putting VoIP on cellular devices is the holy grail of convergence," Span said. "The dual-mode device, which can be used at home and then taken out of the home while maintaining the same phone number, is a great capability to have."

A dual-mode phone would take the softphone idea to the next level, Span said. "Once mobile handsets are capable of doing the handoffs, and the battery life is there, then the user experience will not be any different than what users get while using a cellular phone."

However, there are a lot of issues that remain to be addressed in terms of call interconnection and the hand-off of calls between traditional cellular and VoIP connections, Starr noted. "For example, do you tell the subscriber when the handoff happens?" she asked rhetorically. "And if I go to a Wi-Fi hotspot, can I use [my VoIP-enabled cell-phone there] or can I only use it within my own building?"

The transition is going to happen eventually, but it still is a couple of years out, Starr believes.

VoIP Ripe for Plucking

For now, VoIP services, while becoming ever simpler to use, cater to those who have broadband connections and are technically minded. The technology initially took root that way. It first became popular among tech-savvy users talking to each other over the Internet through what is called a peer-to-peer connection.

"Peer-to-peer calls are really simple; you can't get any simpler than that," said IDC research manager William Stofega. "Just download the software and up pops the client." But primary-line VoIP -- the kind that will replace a regular phone in your home -- is a bit of a different experience, one that Stofega thinks will take a little while longer to really take off.

What the service providers really need to do now, industry observers say, is to launch an education campaign to promote the technology's ability to connect to anyone over any available telephone connection.

Today's VoIP providers indeed are spending time doing this -- thus the rebranding of VoIP as "digital voice" or "digital phone." But most consumers still are unaware of some of the outstanding benefits of VoIP services, which include the ability to replace a per-minute phone plan with a flat monthly fee and unlimited calling to anywhere in the world.

And because VoIP services are very closely tied to the Internet, most providers also offer several advanced capabilities that are unavailable with traditional phone services. For example, you can have an e-mail alert sent to your account whenever you receive a voice mail message.

At this point, VoIP, which is much easier to install than you might think, still is more complicated than plain old copper wire and a five dollar telephone. But the telecommunications industry is well on its way to a digital revolution not unlike what happened when the telephone first came on the scene. No doubt, in the not-too-distant future, Frost & Sullivan's Starr will get her wish and VoIP service will simply be called "voice" and will be as easy to set up as the single-word name implies.