Industry News

If there's one thing that a VC can get behind, it's the idea of the virgin market. Being the first entrant into a sea of untapped, not-yet-tapped consumers gives the possibility of actually owning a whole market. Be the first with the new widget and everyone's catching up with you, fighting for your marketshare and feeding off the scraps you left behind. There's an old business axiom that fits this model: "Those that lead, bleed". I bet you thought that I was going to say "With risk comes reward" or "Building the market is the best way to own the market" - which are all great, but the vast majority of companies that are started with the concept of doing something brand new fail miserably. Let that sink in for a minute. There's a reason it's called the bleeding edge. Regardless of how ripe a new market is for the picking, when you're the first ones out of the gate, you have to build the market - new products, consumer education, heavy sales and marketing.

On and off over the last couple of years, as Skype, YouTube, and more recently Facebook got tagged with silly sums, I've been having the occasional flashback to bubble-land circa 1999. The hype, the parties, and that good old frothy feeling. Ah, the memories. Well, in case you hadn't noticed, eBay suffered "an impairment write-down" recently. In my opinion, Meg Whitman must have been impaired back in 2005 when she judged $2.6 billion to be a good deal for Skype. Skype is a great, disruptive, and revolutionary technology precisely because it doesn't extract much money from its users and it points the way to a time when communication will cost the consumer nothing at all. In the words of its co-founder Niklas Zennstrom, "We want to make as little money as possible per user." So it should come as no surprise that eBay said it would take a $1.4 billion charge last week.

It seems Digium is no longer interested in taking a back seat to the some of the IP PBX vendors it helped spawn with the development of Asterisk, the open source pbx. In the last week, Digium first announced the purchase of Switchvox, the makers of an Asterisk based PBX. Only a few days later, Digium inked a deal with 3Com, who will distribute the Asterisk Appliance under the 3Com name. Both deals signal a strong move by Digium to take the lead in the SMB IP PBX race. Digium says it reviewed a number of competing IP PBX vendors before selecting Switchvox. Speaking from experience, they made the right move. Junction Networks has partnered with Switchvox to provide easy-to-configure SIP and IAX Trunking since 2005. Our shared customers report the product is reliable, easy to manage and supported by a great team.

As we are constantly working to prevent issues like the no-audio condition that some of our customers experienced last week, I realized that it might be a good idea to take a minute and explain a bit about how the phone networks work in general, and how they interconnect with Junction Networks. All telephone traffic - either calls that originate from or terminate to a phone number are carried by the PSTN, or Public Switched Telephony Network. If you really simplify the network, you can imagine that your phone is connected to a wire that runs to a central office of the Local Exchange Carrier (LEC). The central office handles a set of area codes and exchanges (a US phone number consists of a three digit area code, three digit exchange and a four digit extension). To get a call to go between one exchange and another exchange, you have to use an Inter-Exchange Carrier (IXC), also known as a long distance provider. These IXCs know how to get a call from one exchange to another.