COVERING ALL BETS

If 2004 is the year that voice over IP finally emerges into more than just an interesting niche technology, expect to see i2 with its fingers somewhere in the pie.

The Boca Raton, Fla.-based company, which was founded less than two years ago, operates right in the middle of the hot VoIP space, but defining the company is a little more difficult. I2 operates like Vonage, Net2Phone, 8X8 and other service providers, offering low-cost VoIP calls to anywhere in the world. But unlike the other carriers, the company is acting as its own hardware vendor, producing InternetTalker, a wallet-sized device that allows users to make secure calls over the Internet with any type of connection, including dial-up.

“We are placing a lot of bets right now because it's really too early to tell which way this thing is going to go,” said Rick Scherle, senior vice president of marketing for i2.

Initially founded as a small service provider, the company acquired engineering company SuperCaller Community last January and launched into the hardware business, eventually developing InternetTalker as what it calls a “microgateway.” Like Cisco Systems' analog telephone adapter and Motorola's voice terminal, the InternetTalker allows broadband users to make calls over the Internet, connecting with the company's switching centers in Atlanta or Foshan, China.

However, unlike those other devices, the InternetTalker unit doesn't require broadband or even a computer, making it practical in markets like Central America where fast access is difficult to find, Scherle said. Additionally, i2's unit is designed with some added software that dynamically monitors available bandwidth and adjusts packet throughput.

The company also is aiming at the small business market with a four-line unit sold as part of a bundled voice service through value added resellers (VARs).

“A lot of businesses don't want to buy something off the shelf and integrate it with their PBX,” Scherle said. “The VARs can assess the situation a lot better, and you don't have to swallow the whole elephant to get cheap long-distance service.”

The VAR program, announced in December, has already brought in both traditional telecom VARs as well as more data-oriented resellers.

“Telecom VARs that have been selling phone systems to companies don't usually get to participate in ongoing revenue so this is an opportunity for them,” Scherle said. “And IT VARs have never done anything in the telecom space. This an opportunity for them to call their customers with something in the phone space and for the first time participate in the ongoing revenue stream.”

Not ignoring the consumer side, i2 has recently signed agreements to distribute its InternetTalker device through Staples Business expo stores in the Northeast.

Over the next year, though, the company may end up changing strategies by making all of its hardware part of a larger system. It all depends on which way the market winds blow, Scherle said.

“If somebody said they'd like to make a VoIP product and they're a big company, we could be an OEM and put them into the market tomorrow,” he said. “Being in the middle, we've got the ability to go either direction.”