Voice Mobility announces cuts

With all the financial turmoil facing carriers and telecommunications providers across North America and around the world, it might be easy to forget that there are other casualties of the market.

Take, for instance, Vancouver-based Voice Mobility Inc. The company develops a product called Unified Communications software suite, which it sells to carriers. According to the company, the suite features a “find-me, follow-me” application which allows a user to receive all of his or her voice, fax and pager calls through a single number. The product also collects all voice, fax and e-mail messages in one mailbox, which can then be converted to sound and image files to be retrieved via the Web or e-mail.

Last month the company announced it was taking measures to reduce its spending and expenses. What those measures amounted to was a series of layoffs as well as a reduction in monthly expenditures by 25 per cent. The reason?

“We sell a product to the telecom marketplace. Our customers are carriers. Need I say more?” asked Voice Mobility’s president and CEO, Jay Hutton, during an interview.

There are many challenges, as well as opportunities, facing Voice Mobility in this space right now, he explained. The company, he said, focuses on developing technology that is not yet widely deployed, or “well-understood to be of principal value to telecom operators…all (of) the time.

“Because it is not a core offering today, [carriers] tend to overlook it for the time being, and when there’s a cash crunch, they worry about being innovative and aggressive and forward-thinking tomorrow,” Hutton continued. “So because of the carriers’ reluctance to develop and deploy new offerings, the companies like ourselves that are in the business of developing emerging offerings are adversely impacted.”

That in turn means that those in management at these companies need to be more proactive about managing what Hutton called “the sacred resource”: cash.

If your marketplace has taken a pause, you have to ensure that pause doesn’t drive you into bankruptcy, he noted. By making the business decisions the company announced, Voice Mobility is merely being cautious.

But it is not the only one. The market is in such a state that it is pretty much a requirement for everyone to be cautious, according to Joe Gagan, a senior analyst with Boston-based The Yankee Group.

“Just based on what we all know is going on, for [Voice Mobility] to say they are reducing the finances they are spending and reducing employees – that’s just what, in general, [everyone in the market] have all been saying. We can take nothing from that statement and try to read anything into it because that’s what all these different companies are saying – that it is a tough environment.”

“It’s happening everywhere,” agreed David Bradshaw, vice-president of consulting at Ovum Research in Boston. “I don’t think it’s so much that carriers are having to cut their costs, although that certainly is a factor. Some carriers have over-extended themselves with ambitious plans on the basis of unrealistic expectations of the growth of the market for bandwidth.

“But there is a bigger factor here,…which is that a lot of people had, in our view, quite over-optimistic projections of how quickly the carrier market for unified communications is going to take off.”

Current predictions from Ovum indicate there will be real adoption of unified communications by end users next year, although Bradshaw indicated that figure might be pushed back.

But of the people currently using the services, only a minority of people are using a service through a carrier, according to Bradshaw. End users have been taking advantage of free services that are available, which could soon change. Bradshaw said companies offering free services are now finding their business models to be unsustainable, and are having to switch their customers over to a paying service.

While the tough times are here, Voice Mobility’s Hutton is hopeful. He said the fact that Voice Mobility is still up and running while quite a few of its competitors have shut their doors is in itself a strong statement.

“Tough times does a couple of things: it makes you throw up your hands and say, ‘That’s it, I’m out of here,’ or it gives you a greater resolve to make the business go on the principles that you understand,” Hutton said.

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