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Google Goes VoIP

It's been a big month for VoIP. On August 9, Skype announced its upcoming IPO, and then (unfortunately for Skype) on August 25, Google announced that Gmail can make calls.

Gmail is the gift that keeps on giving. Initially, it was just free email. Then came virus and spam protection, then came Office type applications, then Google Talk for instant messaging and presence. Google Buzz came via the Gmail launchpad, and now Google Voice makes an appearance.

Is Gmail Google’s launchpad? Gmail has 173 million users (other reports cite 200 million) that expect Google to continuously improve it. And that’s what Google did with its new function, whose official name is, "Call Phones in Gmail".

What did Google actually innovate? When it comes down to it, not a whole lot. However, they connected a few dots and suddenly became Skype-like--with better terms. Skype's worst fear realized: Google as a direct competitor weeks after the former announced an IPO--though Google's move really wasn't unexpected, and in fact it took quite a bit longer than I expected. By adding VoIP to Gmail, the Gmail client is a Skype alternative enabling its users to make and receive calls.

What Does Call Phones in Gmail Do?
Call Phones in Gmail
is a blend and improvement of the existing services from Gmail, GChat and Google Voice. It's a new feature in Gmail that enables voice calling, and it is (or will be) available to all Gmail users--at least in the US. To access the feature, a voice and video plugin must be installed. Gmail's Contacts are integrated and contacts can be selected/searched or digits can be entered in the simple keypad.

The feature shows up in the chat portion of the Gmail screen as "Call Phone". No special hardware is required other than basic speakers and microphone, but a headset is recommended. Outbound calls will display the generic callerID of "760-705-8888", unless the caller is a Google Voice user, in which case it then displays the correct direct-dial Google Voice phone number. Anyone can make calls, but receiving calls requires a Google Voice number (available for free).

North American calling minutes are free, and international calling credits are available for pre-purchase at very low rates. Most rates are slightly lower than Skype's, which already live on the low end of long distance rates already. Graphic below courtesy of Google.

Significant Topics
First and foremost, the new service represents several changes in directions for Google. For one, Google Voice has been what's known as a virtual number service. That means it requires alternative phone service to use it. Simplified, virtual number services are call forwarding on steroids. It is a growing sector with unique benefits--but has always required the user to BYO dial-tone. That ends now with Google Voice--and users can make/receive calls to anywhere in the world using only Google services--no set up, no commitments, and no recurring fees.

It also marks a shift in Google's approach to cloud services. Google believes "the cloud" should be accessible to all users from any device with only a web browser. To utilize this feature requires an installed client that provides the function to convert voice to VoIP. Rumors of a Google Voice dialpad were squashed and attributed to Larry and Sergey’s desire to remain out of the desktop software market. Evidently a compromise was reached by making the desktop client a browser plugin.

The plugin in question is used for voice and video, likely using codecs from GIPS, a company Google recently acquired. This does indeed suggest that video calling may be in Google Voice’s future. Currently video calls are only supported between users with the plugin, but considering both that Android is controlled by Google and the progress demonstrated with Apple’s Facetime, it doesn't seem unreasonable to predict broader video calling. GIPS demonstrated such functionality prior to acquisition by Google with Video Engine Mobile. Google Voice can continue to tie Android with other Google services. A strong partner might be T-Mobile, which needs a patch to fill its iPhone and Skype holes.

Another interesting aspect is Google's choice to not enable incoming calls unless the Gmail user has a Google Voice number. Every Gmail user has a unique ID which is currently used for email and Chat addressing. Skype allows that uniqueID to receive calls. But Google says to receive calls you need a phone number? On the surface, it isn't a big deal. Google Voice numbers are free, and receiving calls normally requires a number anyway. But the requirement does seem capricious.

We don’t know the current number of active Google Voice users, but as of late last year, the service had grown to 1.419 million users. That’s a big number, but nothing compared to over 173 million Gmail users. The number of Google Voice users will likely begin to skyrocket now.

But where? Google Voice has been limited to US residents only and Gmail isn't. Conversely, Skype offers voice services world-wide to nearly 600 million clients. So it doesn't appear Call Phones in Gmail is a Skype killer initially, but it’s certain to have an impact on Skype's US customer base and its upcoming IPO. Google appears to be launching the feature outside the US borders, but presumably with the receiving calls feature limited to US residents (unconfirmed). At the launch, Google's Craig Walker confirmed Gmail calling for users outside the U.S. is under development and localized versions can be expected in the months ahead.

One final observation is the launch team from Google. Three product managers made the announcement of Call Phones in Gmail; Todd Jackson, Group Manager for Gmail; Vincent Paquet, product manager for Google Voice; and Craig Walker product manager for Real-Time Communications. Walker and Paquet came with the Google acquisition of Grand Central--which eventually became Google Voice. But what is real time communications? Presumably it's voice, video, and chat--so is Google Voice part of Real-Time or separate? Google has also in the past launched "real time search"--is that part of real time communications?

Missing from the announcement was David Girouard, President of Google Enterprise, because this initial launch is strictly a consumer service. The capability is only in Gmail, not its Google Apps (for business) cousin. I contend that won’t last. Google is aggressively building its enterprise focus and Google has stated its intention to narrow the feature differences between Gmail and Google Apps. InformationWeek, at the launch, reported:

Paquet said Google was not ready to offer Gmail calling to business customers using Google Apps. While he would not explicitly state that Google is working on administrative controls to make the service manageable by IT administrators, he made it clear that Gmail calling for Google Apps users will appear eventually.

What Could Google Do With This?
This move threatens revenue streams from long distance carriers, particularly cellular carriers. It also threatens UC equipment makers such as Microsoft, Avaya, and Cisco as well a slew of related industries such as soft phone developers. That's all in the first release. Upcoming releases could threaten competitive cell phone makers by tighter integration to Android (think FaceTime or VoIP calls that don't utilize minutes). In less than 24 hours, 1 million calls were placed with this new feature--Google has an enormous capability to disrupt things and is likely just getting started with its voice initiatives.

Skype and other IM providers will feel the pressure as the Gmail offering (originally known as Google Talk) just keeps getting stronger. It's integrated with Gmail’s Contacts instead of a separate address book, and works with numerous cellphone offerings. Additionally, it can be federated with separate IM networks.

Google could introduce this to Google Apps without significant effort. And it's likely too. Google is pushing hard on enterprise penetration with Google Apps winning over businesses, universities, and governments. Consider the current thrust in enterprise communication is a comprehensive (unified) approach to messaging (email and voice mail), presence, video conferencing, voice, collaboration, and mobile solutions.

Google's move threatens continued erosion of long distance prices. The application allows simple long distance services (free domestically) from the desktop. This is of even greater significance when compared to cellular long distance rates, which are considerably higher. With an Andorid or Blackberry phone, Google Voice users can initiate international long distance calls for pennies a minute, and transfer those calls to/from their desktop computer (or other phones) with ease. Google Voice previoiusly offered seamless and inexpensive international dialing from some smart phones, but this tie to Gmail will give the service broader exposure. To realize the savings, users must pre-purchase long distance credits--eliminating collections and bad debt costs (as with Skype).

For Now
More details should work their way out soon, like which codec they are using and if its call quality can compete with Skype. The initial service is a bit rough around the edges. Typing a name in the dial box provides multiple phone numbers to select, but no labels (work, mobile, home, etc.). There is very poor integration between Gmail and the Google Voice portal--messages must be deleted in both places. Also, as it stands now, Google Voice users typically avoid dialing in to hear messages, as it always plays the oldest first.

At this time, there is no way for a Google Voice user to initiate a call from a cell or PSTN line to a Gmail client.

The effect of Google announcements such as this latest one usually takes a while to see better, but this does have a potential disruptive ripple. Google's announcement was covered by just about every major news outlet--few companies can receive such coverage, or achieve such a rapid deployment and adoption rate.

Google will be placing British-looking phone booths around the country at airports, college campuses, and other crowded areas, offering free calls to increase awareness of the service.

Dave Michels, principal of Verge1, personally blogs at