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The Google Voice Disruption
Apple and Google evidently unfriended each last week. Just recently, they seemed so close--Google busy writing iPhone apps, and Eric Schmidt, CEO of Google, a bona fide member of the Apple Board. But Apple decided to block the Google Apps from their Appstore, and Eric decided to resign, and the FCC decided to investigate.
That is old news, and there are lots of stories and blogs written about it. This is more about why that little event is just a glimpse of the disruption that Google Voice is going to cause.
There is a lot of confusion around Google Voice. That might seem improbable considering the service is pretty simple, plus few telecom topics have received so much coverage. The fact is, Google Voice offers very little unique or original in its components, yet it is a highly unique total offering; potentially poised to unleash havoc.
The people with the most ignorance appear to be the traditional telecom folks (the disruptees). They tend to see more what Google Voice isn't rather than what it is. Google Voice isn't a carrier, it isn't equipment (nor does it require equipment), it doesn't provide dial-tone, nor is it a soft phone. When I told a colleague that Google Voice can interface with a Nortel PBX, he assumed I meant via some Nortel proprietary API. In fact, I meant that it would simply directly dial an extension. That doesn't sound particularly disruptive, does it?
While the Appstore got the attention last week, back up a moment and consider Apple and its impact on the cellular industry. Prior to the iPhone, Apple had zero cell phone market share--it hadn’t even built a cell phone before. Moreover, Apple didn’t become a carrier, and it agreed to only work with one in the US. Despite this, Apple shook up the industry pretty significantly. They changed the rules and the value proposition of the cell phone. They broke the chokehold carriers had on equipment makers and customers by stripping away arbitrary restrictions. Companies such as Microsoft and RIM found their broad portfolios of phones (available on carriers around the world) obsolete overnight. Apple's iPhone demonstrates yet again that disruption rarely comes from the established players.
And so to Google Voice, which is based on the Grand Central Service it acquired in mid 2007. When I first tried Grand Central, I was not overly impressed. I used it a while, but found my feature rich PBX a far better proposition. Not really a surprise since the service was geared at consumers, not businesses.
After acquisition, Google closed it to new users as well as stopped any visible development. It faded to memory until this year's re-launch as Google Voice. Now it not only has my attention, but I believe it can become even more disruptive to telecom than the iPhone was to cellular. Google has been very quiet about its new service, which it slowly began to offer around the beginning of the year. Grand Central users were first migrated to the new offering, then recently new users that requested invites got them. The service remains open by invitation only, and only to US residents.
Currently, Google Voice is a limited and free consumer grade service. It is a curiosity and something easy to ignore. But don't. Google isn't a charity and this service isn't the fringe on top of a surrey. It is a whole new vehicle for communications that potentially changes the rules of how services are charged, delivered, and bundled.
Phone systems have considerable feature overlap among competitive brands. The differentiation (and profits) are largely around new features and applications. More and more, these are being sold separately--that is, the basic call control plus one or more add-on applications or advanced features create a powerful phone system. These applications often run on separate servers and include popular capabilities such as unified messaging, click to dial, presence, mobility, speech recognition, conferencing, call record, etc. Virtually all the vendors position their applications as add-ons to their call control (with a few recent exceptions).
Google Voice reverses this arrangement--and effectively outsources basic call control. Ignoring the burden of phone system hardware (and 911 liability), it focuses only on the applications. Rather than develop proprietary interfaces to work with each phone system, they simply call phones to make them ring. This "PSTN API" introduces a number of unique challenges since Google has no immediate feedback that a directly connected phone provides. To make outbound calls, users must deliberately take action to involve Google Voice--rather than just dial a number.
Outsourcing various services, such as an answering service, or even third party applications such as voice mail isn't a radical change. But Google is taking it further. Google Voice represents a model of not just outsourced services, but an outsourced bundle of cloud based services with potential to tie into a wide variety of services.
Google has a number of unique tools in its arsenal. Currently Google Voice and Gmail share Contacts, but future integration opportunities abound. Google is actively developing a variety of communications applications--how they tie them together will determine the impact of overall value of Google Voice.
Consider the fact that Google is actively engaged in managing, designing, and implementing applications around presence, chat, video, calendar, location awareness, cell phone APIs, and more. PBX makers are taking a similar strategy with new desktop clients and mobility applications. The difference is Google's sandbox is global and hardware-agnostic. Not to mention, these applications and services are generally available for no charge or a small charge; some even open sourced.
A key test for a disruptive technology isn't whether it can meet the current value proposition, but whether it can stretch it. Google Voice solves some long-standing problems the industry has ignored for far too long. Consider SMS message usage, which continue to increase. Not only is this very lucrative for the wireless carriers, but there is no simple way to automatically forward texts (something like a call forward option for texts). Google Voice solves that with free SMS services and the ability to forward them to any (one or more) mobile devices.
International dialing remains uncompetitive from mobile phones. Google Voice solves that with prepaid credits at very low international rates. Substituting callerID with a "published" number--particularly from home and mobile phones--can be pretty tricky. Google Voice solves that without any premise equipment or potential 911 issues.
Higher-end applications from the PBX makers usually require proprietary desktop clients. The vast majority of the PBX clients work only with their specific hardware--whereas the Google apps (as with Google Voice) are phone-system independent.
Google uses a variety of clients and JAVA applets to deliver services widely around the globe. Potentially (not today) Google users could see in their browser a status such as "on the phone" even though these "buddies" are on different, non-federated phone systems.
Consider desktop video conferencing--an area where most PBX vendors are dabbling or committing. Most PBX solutions utilize a video client with limited interoperability requiring like hardware solutions on each end. Google offers video chat--completely independent of cameras, desktops, and phone systems. How services such as these will integrate into Google Voice are unknown (no current video/Google Voice integration), but the large base of deployed applications creates a healthy head start.
Assuming a business version of this service is released (Google Voice Premium?), the on-site PBX could become fairly simple; DIDs, Intercom, 911, and paging. The more critical business applications such as call recording, conferencing, unified messaging, etc. are delivered in the cloud.
Most PBX application servers are not currently ready to be installed in the cloud, nor decoupled from the call control server over a WAN. How enterprises will embrace the cloud for mission critical voice services is still unknown, but it is clear Google is making a strong case with its Gmail offering. The cloud will initially be attractive in "low hanging fruit" situations (ie. email)--does voice services such as unified messaging fall into that category?
The cloud solves issues around universal access, but introduces complex emotional and financial issues around outsourcing and control. This capability, outsourcing to the cloud high-level voice applications, is a fairly bleeding edge consideration.
The current Google Voice offering won't be attractive to most business users. The free service only works with new numbers (no inbound porting). There is no super-user console to manage blocks of numbers, no service level agreement from Google, and the service is rough around the edges in several areas. A paid premium service will presumably address these issues in the future, but nothing has been announced.
Plus there is still a big limitation around outbound calling (callerID substitution). The value of Google voice is bypassed when callers dial phones directly. This means users need to always send out their Google Voice callerID regardless of the device they are using. Today, this isn't particularly seamless. The tools to make this easier are slowly increasing--last month, Google released tools for Android and Blackberry cell phones to simplify this. Apple blocked them for the iPhone. Other dialing tools include click-to-dial applets and web widgets.
The capabilities will continue to increase as more tools are introduced. Google Voice already supports the Gizmodirect Project which translates incoming calls into SIP. With some SIP providers today, you can send your Google Voice number for outbound CallerID.
As with most Google Beta products, new features are being randomly introduced. Users were also recently presented with a simple option to change their number for a nominal fee. This is a great example of how Google is changing the rules. To get a new number (change or new account) Google offers a simple "search" GUI to select the area code and/or a desirable string of numbers or letters from the available pool of numbers. The process is simple, relies on self service, is selectable/customizable, and instant. Contrast this to the status quo (burden) involved with changing a number with the local carrier.
As stated, it isn't any one feature that makes Google Voice stand out; it's the combination. The "carrier" aspects include personal numbers and inexpensive (or free) long distance. The core features include voice mail, simultaneous ring, and call screening. Higher-end applications include unified messaging, voice mail transcription, and ad hoc conferencing. There is no other service like this today; much less one available for free. An enterprise offering is likely in the works, but it doesn't matter.
The impact of the disruption is already being felt in the marketplace. Google Voice is unbundling applications from the call control using a PSTN API, putting applications into the cloud with new economics, offering new levels of simplicity and customization through web based GUIs, and totally separating delivered value from specific hardware. The established PBX model is very different where new features are generally tied to new phone models requiring new software releases, and key features are limited to internal or federated peers via licensed client software. While Google works to establish its voice capabilities by integrating its applications, the PBX makers need to unbundle and virtualize their offerings.
It's another new set of rules for the traditional PBX makers, just as they adapted to the new set of rules associated with client software, VoIP, and software licensing rather than counting ports. But it doesn't stop there; other competitive threats from wireless carriers, non traditional carriers (Skype), plus new drivers such as UC, the cloud, open source, and SIP interoperability are creating an interesting pressure cooker for the PBX.
But on the other hand, the PBX makers have a huge opportunity--another characteristic of disruption. The cloud will not be attractive to all organizations. Not everyone wants to embrace new technology around voice communications, and unlike Google--the PBX makers have a huge head start around customer premise equipment such as phones.
Google Voice may or may not be significant as a service. It may or may not be repackaged for business users. Those are interesting topics, but not the salient point. What is of importance is the model changes, the migration from proprietary API to the PSTN API, the separation of call control and features, the economics, the proof of telephony cloud services, and the empowerment their solutions provide. The fact that Google has a unique set of strengths, an excellent consumer service, and a growing base of application users makes it all even more interesting.