As the stories about the demise of Jangle (Luca and Om) run through the blogosphere, and questions about the bursting of the Voice 2.0 bubble are raised, I’m reminded of an event from my past.

About ten years ago, give or take, I was a software engineering manager at a company called PictureTel. I was managing the next generation set-top box video conferencing product, and we had a mandate to include ALL of the various video-conferencing protocols available. At the time, this included H.320 (the ISDN standard), H.323 (you better know what that is) and H.324 (the POTS standard). It would have been my second H.323 design, as I had been early involved in our LiveLan product back in 1993, which is why I keep smirking when I hear the stories about the first voice over IP products being delivered two and three years later. In any event, as happens in corporations, our eyes were bigger than our stomach. There was no way we could implement all three protocols in the schedule we were given, so it was time for hard choices to be made. My hardware manager partner and I floated a then radical idea – discard POTS and ISDN, let’s go all IP and make it a H.323 product. The product manager (who will go SO nameless) made it very clear that this was unacceptable: all of our customers had installed H.320 devices, so we couldn’t leave it out. At the time, PictureTel was selling over 200 million a year (in fact, it could have been as high as 400 million) in H.320 equipment, so I understand his reasoning. I was arrogant enough at the time to blurt out “If you don’t recognize that the world is going to IP, you simply aren’t paying attention.” Oh, the impetuousness of youth. I lost that argument, and in short time, Polycom purchased mother Picturetel, and I contend that this was due in no small part to this particular bad decision. Market goes North, PictureTel goes South.

I’ve been looking at this whole Voice 2.0 thing for a while now, and there’s something I think we’re missing. In order for a bubble to exist, it has to be big and over-valued. If people think the Voice 2.0 thing is big…. they simply aren’t paying attention. Like a pimple on a gnat’s ass, voice 2.0 companies, revenues and projects are microscopic. Truly. Jangle going out of business has the same effect (no that’s overstating it but still) as Verizon deciding not to deploy a particular handset in Puerto Rico. I admit it’s difficult to comprehend just how small the Voice 2.0 market is compared to the telecom market as a whole, but I can tell you that every voice 2.0 market sizing uses numbers that start with “m” (and small amounts of “m” at that) and telco market sizing needs uses numbers that start with “t”. Voice 2.0 doesn’t rank.

What’s the big deal? If you don’t recognize nearly all voice applications will be deployed over the top, and that they are blended into ten thousand non-voice applications, then you are simply not paying attention. This is what Voice 2.0 is all about, not some silly HTML badge. Voice 2.0 is about insane value add for corporations, and equally insane permeation of voice into other applications. In this world of MacDonald’s and VC mentalities, fast isn’t fast enough. The telephony market is incredibly large and entrenched, and it’s not an aircraft carrier, it’s the whole damn fleet. Voice 2.0 will take ten years to get here, and that might be optimistic. H.320, the precursor to the first VoIP protocol H.323, was the first packet media protocol developed. It grew out of PictureTel’s p x 64 protocol in the late 80’s. If you (as I do) recognize the rise of the first generation of VoIP startups happening ten years later, then you’ll get some sense of this.

Bubble? They simply aren’t paying attention, but I suppose this is nothing new.