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Computers, Media, Communications, Internet

Can VoIP Find a New Voice?


Two announcements this week underscore ongoing efforts by VoIP firms to alter their technology and marketing strategies to adapt to changes in the telecommunications industry.

On Thursday, M5 Networks, a New York City-based VoIP systems provider, unveiled M5Connect for Salesforce, a product that connects M5’s VoIP service for users of Salesforce.com.

Salesforce.com's Internet-delivered customer relationship management software is an early pioneer of the software-as-a-service movement now hyped as "cloud computing."

“As voice becomes digital, the possibilities expand. Phones start to flow into other software,” M5 CEO Dan Hoffman said. “The on-demand model means they can connect without integration friction.”

And earlier this week Truphone, a London-based VoIP provider, unveiled software that allows BlackBerry users to bypass the carrier network and reroute international phone calls via the Internet. The service offers international calls for as low as $0.06 a minute.

The urgent need to adapt is in large part due to the overall success of the VoIP market.

VoIP startups have sent the cost of domestic landline phone calls plummeting. As a result VoIP companies that built businesses on cheap phone calls have had to find non-price-based arguments to sell their wares.

For M5 and other business VoIP companies, the SaaS market has emerged as an alternative. Voice as a service has more than just price as a selling point.

In the case of M5Connect for Salesforce, a major selling point is the product’s ability to track and monitor call details, call frequency, call duration, take notes, and assign wrap-up codes among other metrics.

“CRM has been a passive system that sales professionals use at the end of a month to report,” Mr. Hoffman said. “Phones are real-time by definition and the connection ‘activates’ CRM.”

And in the emerging everything-as-a-service market, there is no shortage of SaaS platforms to which VoIP can attach itself.

For Truphone, the mobile market is a challenging opportunity. The price of international calls on cell phones have remained relatively high, so offering a product that touts dramatically lower prices could be attractive.

But the challenge for Truphone is the fragmentation of the mobile market. (see Truphone: Calling BlackBerry Users) Truphone must develop software for multiple operating systems, multiple handset makers, multiple phone models,  which adds cost and slows market entry.

“It is something of a moving target in that we have a version of the software that works with Nokia, another for the iPhone, and now we have one for the BlackBerry,” said Geraldine Wilson, CEO of Truphone.

The technology also requires users to download software to their phones, which always meets with some user resistance.

But the maturation of the mobile web could make software downloads a thing of the past.