TelecomTV reports that Twitter is pulling out of the UK market because they were “unable to form a proper cost sustainable relationship with a UK mobile operator.”

A little rule I have of new businesses is that, at the core, they have a kernel of a very profitable product or service. It does not have to be big, but it has to be big enough such that the inevitable mistakes and blunders that any company makes won’t sink them. If there’s no profitable core, it’s a huge red flag for me. I think this holds true for all businesses, not just technology based business. You need to make a good margin first, then you worry about scale. There are exceptions (of course), but they are few and far between.

Which gets me to Twitter. Many have been looking at them, wondering where the real business model is. I’m looking at them wondering where that kernel of high profit is. This bit of news is worrying, because it says to me that what they are doing is not insanely valuable enough to pay for their communications costs. Or at least, in the UK. And why would the UK be substantially different than France or Germany? It is not different.

Maybe I’m over reacting, but I can just imagine a meeting where somebody is going to say “OK, I know you lose a little bit of money on each message, but do you expect to make it up in volume?” It’s just not smelling like a fat margin business.

As I race across Tennessee from my sister’s house to my brother’s house on a family vacation, Jay penned a post that skewered Asterisk, and Mark Spencer responded. Jay shared his work with me last week, and I told him I would blog my opinion on it… I’m glad that I waited and now have a chance to do it after Mark posted his. To catch everyone up, and in full disclosure, I am an active adhearsion developer, most of my CEBP work last year was based on adhearsion running on Asterisk, I am active supporter and user of Jay’s work, and for what seems like large stretches of 2005 and 2006, I was an active and vocal critic of Asterisk. I would also tell you that I not only deeply respect the accomplishments and capacity of Mark and the Asterisk community, but everyone owes them a world of thanks for the door they opened. I use Asterisk weekly, if not daily, and depend upon it, as tens of thousands of others do.

In short, this is a first row seat to the clash between the old world and the new, writ small. If there is a single thing that is driving the change in telephony, it is the movement from computer-as-platform to web-as-platform. Nearly every point made by both Mark and Jay can be understood through this lens, with the possible exception of Mark’s mother’s inability to distinguish between perception and reality. From my perspective and estimation, Asterisk is a wonderful PBX for the SMB. It’s a lousy platform for applications, and more than that, for any web based application. Asterisk is the quintessential example of what telephony technology used to be: single purposed and stovepiped, written to be run a single computer with custom hardware and/or protocols. Adhearsion is a ruby library built to what applications are to become: using the Internet as a platform, to be integrated into a thousand applications which are not necessarily telephony, without custom hardware or protocols. As a developer who writes applications that use telephony for a living, I have rejected Astersisk as my primary application API, and use Adhearsion when I can, and when I can’t, I use VoiceXML – normally from Voxeo.

Jay’s post comes straight from the frustration that anybody feels when they try to integrate Asterisk into an application other than PBXs. Mark’s post comes directly from his experience in developing a software PBX for the SMB. Jay’s post falls down when viewed in the light of a particular market (and Mark is right, it does not make an argument for any particular market segment), but Mark’s post falls down in it’s myopia. It simply does not follow that a piece of technology designed for one application must be equally appropriate to another application simply because it’s software. Asterisk does a great job at it’s one thing, making a PBX, but really creaks when you try to apply it to something else. Adhearsion is no better, except that it’s one thing is to be a platform for web based applications that use voice. What Jay was trying to say was that Asterisk will never be that platform; and he’s right. What will it be? My bet is that it’s Freeswitch running Adhearsion, hosted by something that looks like a blend between CloudVOX and Amazon’s EC2.

Part of me wants to tell people that, as far as technology goes, Asterisk has been left far behind, and the old-school plumbing behind it is leaking and creaking. But at the same time, I want to smack the new web-guys around and remind them that until they have downloads and installs of in the tens of thousands each month they should keep their mouths shut and their heads down. Again, just like the old world and new: Google is mighty impressive, but Verizon has conviced every household to fork over $30 a month.

Asterisk is tired, and Adhearsion is wired.

Tomorrow, at the ClueCon show in Chicago, I’ll be annoucing Open Diesel, an open source voice application written with Adhearsion.   OpenDiesel provides a complete work group management solution for small to medium enterprise, using adhearsion to integrate the phone with real business management issues. What does it do?

• Provides a complete IVR written in Ruby, with helpers for menus, multiple dialing, etc.
• Provides a complete user interface written using Ruby on Rails, for an easy to use configuration tool for both users and administrators.
• Supports PSTN numbers as extensions, providing a completely virtual PBX.
• Supports automatic creation of workgroups, including insertion into the dial plan, right from the Ruby GUI.
• Supports workgroup scheduling from the user interface, so you extension only rings when you tell it to.
• Supports dialing multiple phones and employees to answer an inbound call.
• Forwards voice mails to everyone in the workgroup
• Supports click to dial, call history, etc. from the GUI

How did this happen? About a month and a half ago, Jay Phillips, the creator of adhearsion, came to me with a project. He had written a workgroup application using his library, but he had time constraints, and asked me if I wouldn’t mind taking over the project and finishing it up.  I said… um… yeah!  Near the end of my work, I offered to support OpenDiesel in return for the sponsoring company making it open source. They were completely cool with that, which of course, is completely cool.

And who are they? EngineYard.  EngineYard is the premier (like really, they are) Ruby on Rails hosting company, and home to some seriously smart people like Ezra Zygmuntowicz, their chief architect and author of a Pragmatic Programmer’s Rails Deployment Book and Evan Pheonix, creator of Rubinius – the Ruby virtual machine. You might also know them as the guys who host cool tools like GitHub and Lighthouse.

And when is it ready? It’s in production now, so I guess it’s ready enough.  We have about ten bugs in the database, so there’s still a little work to do, but it’s quite far along in the process. The site will go up soon, and I’ll fork the source in GitHub as soon as I get off the stage tomorrow. For all you adhearsion geeks, I think it’s an excellent example for documentation and examples. If you’re around… see you tomorrow!

Having just suffered through a paid television ad for magicJack, reading Jon Arnold’s recent post and Dan Barislow’s response to same, I have come to two conclusions. First, magicJack’s advertising is willfully misleading to customers, making deceptive claims about the uniqueness of its offering and the pedigree of its founders in an attempt to deceive consumers. In both web and television advertising, they claim to have the built the only nationwide network for internet telephony, which will strike any telephony engineer as  obviously untrue, and adds undue credibility to their marketing message.  In both their web and telephony advertising, they claim a three step install, where the third step is an eleven year old making a phone to her grandmother. Although I could go on about this one all day, I challenge any company to reproduce that demonstration in front of me, where an eleven year old goes to a un-prepped Windows computer, plugs a USB dongle into the front, plugs in a phone and makes a call in the less than ten seconds I saw on the commercial. (Better hope Nana picks that thing up on the first ring, and on the commercial the impolite fifth grader doesn’t even say goodbye before she hangs the phone up. Any chance she really wasn’t calling? ) The demonstration on the commercial is obviously rigged and purposed to exaggerate MagicJack’s installation process.  The deepest bruise comes when the announcer claims that the MagicJack was invented when it occurred to the founder that computers accessed the Internet over phone lines, so why shouldn’t we access phone lines over the Internet? I listened hard here, and I’m sure that the average consumer can only conclude that Dan invented Internet Telephony.  A claim of this magnitude not only dismisses the successful work of thousands of engineers over many decades, including many of the people I happily spend my life with and look up to, but in my book is proof positive of willful deception. Period. You thought Al Gore was over-reaching, but unlike Al Gore’s extemporaneous remarks, the message is repeated and calculated.

My second conclusion is that any company so willfully deceptive in its advertising must have serious corporate morality issues. As a professional in this field, my strong advice to any other professional, either technical or financial, is to distance yourself from this company, and fast. It’s amazing to me that a company with the business practices of a midway hawker has invaded our industry.  There’s no other advice I can give but to stay away.

If you are a consumer: my name is Thomas Howe, I am a degreed electrical engineer with over twenty years of experience in telecommunications, and in 1992, I was lucky enough to be surrounded by a hundreds of people who are part of the bedrock of the voice over IP industry’s leadership.  On behalf of all of them, I am sorry for whatever damage MagicJack will do to our industry’s reputation and to your pocketbook.  Nearly all carriers use this technology to carry phone calls inside their networks, and it’s solid as a rock.  I cannot, and will not, stand idly by and see these sorts of claims be made in public without speaking up. I’m calling the office of consumer affairs in MagicJack’s home state and I am forwarding a copy of this letter and my resume. If you are a consumer having MagicJack issues, I heartily encourage you to do the same. Even if MagicJack’s service is perfect, which I doubt, the ends don’t justify the means. MagicJack’s advertising is clearly designed to deceive consumers.

** UPDATE **

Since somebody decided to threaten my children in the comments of this post, I have disabled comments.