November 08, 2005, 12:37 PM — Voice over Internet Protocol (VoIP), is one of the hottest technologies affecting businesses today. Unfortunately, it's also a tech term that tends to make people's eyes roll back into their heads while they become catatonic.
So, instead of talking about VoIP, this article looks at billion-dollar technology deals, vodka, seedy adult book shops, hot new European cars, illegal MP3s and controversial person-to-person file sharing applications.
If I mention VoIP along the way, don't worry; I'll get back to the juicy stuff as quickly as possible.
Seedy Shops and Big Money
You've probably heard that Internet telephony is a hot technology. The Gartner Group, a leading technology research company, called Peer to Peer Voice over IP one of the key emerging technologies for 2005. The technology is so hot, in fact, that eBay recently purchased Skype, a popular VoIP service, for $2.6 billion.
Skype is a free application that lets you make phone calls over the Internet, using a computer headset, a mic and speakers, or a USB phone. It works on all major operating systems, and provides good audio quality as long as a broadband Internet connection is available.
Skype was created in a back alley in London. The location was described in a recent Newsweek article as "amid the seedy sex shops, comic-book stores and coffee joints".
Skype's cofounders, Niklas Zennstrom and Janus Friis, have an equally colorful background - previously they came up with Kazaa, a popular application for swapping MP3s. For Zennstrom and Friis, switching from P2P file-sharing to providing free phone service was a good move. After just three years, they've taken Skype from nothing to a multi-billion dollar company.
Why is Skype so hot? Look at it this way - Kazaa was adopted by the millions, was of questionable legality, and threatened a multi-billion dollar industry. Skype is being adopted by the millions, is legal, and threatens a multi-trillion dollar industry.
Vodka and Hot Cars
The biggest problem facing VoIP services, like Skype, is the catatonic, deer-in-the-headlights look that the technology can trigger. Most people have no idea what VoIP is.
A recent Harris Interactive poll found that 20% of US adults think that VoIP is a hybrid car from Europe. Another 10% think it's a low-carb vodka!
There are other barriers to popular adoption, including:
* Lack of understanding of VoIP
* Security concerns
* Uncertainty about call quality
* VoIP providers not providing convincing offerings
* Users are waiting for mainstream adoption
* Savings may not be worth the hassle
* It seems to complicated