Remember Vonage? Back in May, the Internet VoIP company held its much-anticipated IPO, which investors and various pundits were predicting would showcase the triumph of “next-generation” VoIP services over the old, tired offerings of the Bells.

What happened instead was that Vonage’s shares, which were initially offered at US$17, promptly tanked (Vonage is trading at about $8 per share now). That’s not all — Vonage is now apparently suing its own customers for failure to purchase roughly one million shares of its stock. The company recently sent “pay up or face the consequences” letters to roughly 9,000 of its customers who had promised to invest but backed out in the face of the disappointing IPO.

Talk about hilarious!

Not even the Bells have been boneheaded enough to think of suing their customers for shorting their stock. (And please, let’s not give them any bright ideas, okay?) Unless you’re one of those Vonage customers who got the letter, you’re probably chuckling.

But there’s a serious point here, too. It’s a mistake to view Vonage’s market belly-flop as a thumbs-down on VoIP technology. As I’ve pointed out in many previous columns, VoIP can potentially lower costs and improve agility for enterprises that deploy it correctly.

The real lesson behind Vonage’s VoIP belly-flop is that service companies, regardless of the technologies they deploy, are fundamentally providers of, well, a service. In the telecom case, the service involves connecting people effectively. That means a great deal more than “using the latest and greatest technology.” It means providing top-tier customer service and support. Vonage apparently hasn’t entirely figured that out. Complaints about its customer service abound. “Vonage is the roach motel of phone companies,” writes one disgruntled ex-customer. “They have salespeople working around the clock, but intentionally don’t put their customer service extension in the menu on their phone system.” Analyst David

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Jim Love, Chief Content Officer, IT World Canada

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