VC: VoIP needs more innovative focus

Innovation in the VoIP world is just starting, says one venture capitalist. And the entire industry needs to be looking beyond basic “find-me, follow-me” services to truly disruptive opportunities, according to Charles Moldow of Foundation Capital.

For example, IP call centers may be the next big breakthrough for voice-over-IP technology, enabling a whole new approach to employing customer service representatives. Where this technology becomes powerful, however, is in its ability to create new work paradigms.

Moldow believes corporate America is warming up to the idea of being able to distribute incoming call center calls to agents who are geographically distributed but logically linked by the IP contact center.

“Maybe we are finally starting to see the time for IP contact center,” Moldow said in a recent telephone interview. “An IP contact center enables you to do some many interesting things. Think about a health insurance company. It has thousands of patients for which it needs to do open enrollments. But it doesn’t need agents year-round, just for the three-month open-enrollment period. It would be possible, using an IP contact center, to hire agents on contract businesses for a three-month period.”

Those agents would then be free to move on to other clients whose seasonal work doesn’t conflict, and would be empowered to charge more for expertise to a company that knows it doesn’t have to maintain a year-round payroll for seasonal work, Moldow said. Instead of hiring people and then cutting back hours to avoid the expense of hiring and firing, employers could pay for what they need, when they need it, or even sell their employees’ services during the off-peak periods.

“I could envision a marketplace like eBay for labor,” he said. “I post myself on the system as an agent, able to handle certain kinds of calls.

That kind of innovation has not yet developed in the VoIP world, Moldow said, and he admits some frustration about that.

“I don’t think we’ve seen the innovation in applications that we expected,” he said. “Most of it tends to be the find-me, follow-me type service that Wildfire invented a long time ago.”

He points to two companies--Nuasis and LiveOps--that today are offering distributed call center platforms (neither is funded by Foundation). Nuasis announced its NuContact Center 3.0 software in March to support up to 1000 distributed agents.

Other established vendors--Avaya, Nortel, Alcatel, Genesys--are moving in this direction as well, he said.

“The problem is, if you sit down with those people, they are telephony-centric,” he said. “These are people who are migrating telephony into data-telephony. Ninety-eight percent of what they do is filtered by telephony. They don’t think about what new business opportunities IP telephony enables.”

One distinct option is to use speech recognition in a new way to enable voice dialing for things such as controlling home security or programming a digital video recorder through an integrated service built on IP that combines voice with video and data.

Cable companies are interested in this technology, said Moldow, who came to Foundation Capital from Tellme, a company working in speech recognition, but the timing is not yet right.

“I think they would be smart to do this, in order to differentiate their service,” he said.

Skype’s approach to innovation, which is to open up its platform to outside developers, is more likely to spawn truly differentiated services, much as wireless carrier DoCoMo did in Japan. By sharing revenue with the developers for use of their services, Skype creates a new revenue stream for itself and more value for its subscribers.

“And then a whole ecosystem grows on top of Skype,” he said.