The Google Voice Disruption

This offering potentially changes the rules of how services are charged, delivered, and bundled.

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.