Zula – Selling Out and Buying In

I believe a good majority of my colleagues share the same feelings for VoIP applications as I do. The press releases for most of these “ground-breaking” platforms are incredibly mundane. Great – a new VoIP app. How novel. For the most part, very few of these applications see major success.

Every so often an application will surface that has the ability to contend with other platforms. However, seeing as how Skype has a ten year lead in the market at this point, it’s not hard to imagine that finding a way to leverage the little bits of innovation still yet to be utilized coupled against the reach of larger businesses makes it difficult to compete. In order for any new company to truly succeed, their products or services must truly stand above in regards to capability and price.

Of course, the price for using most modern VoIP apps is nothing, provided you are messaging (or calling) someone using the same platform. Free is a tough price to compete against. The only thing cheaper than free is to actually pay someone for using your service. Sadly, this doesn’t bode well for companies to use such a model.

Most would agree that price is relative. Say you’re walking around a department store just to kill time. There may be a few things you need or want though you’d rather not spend any money. You’ve been thinking about upgrading the living room TV for a minute but other financial obligations are more pressing. Then you come across the perfect set at almost two-thirds of the normal retail cost for that particular model. At this point, you may be inclined to upgrade before the deal expires.

New apps and their role in the market

Overall, the telecom market has a sort of centripetal force that is often found in other markets as well. As time progresses, companies obtain more assets and grow in size. You could look at this like a physics equation where the company literally has a mass. As the mass grows, the gravitational forces felt by orbiting bodies is increased so says Newton, who validated Kepler’s laws of planetary motion. Business is coincidentally similar.

We are beginning to see a lot of consolidation in the VoIP market too. Just over a month ago, we had the merger of Vocalocity and Vonage. Most in the telecommunications industry know purchasing a pre-existing infrastructure is much simpler than building your own. This is likely how Vonage is planning to become more competitive in the SMB space and possibly at the enterprise level as well.

Benefits of “selling out”

The term sell-out usually has a sort of negative connotation when taken from any context. We tend to toss this phrase at celebrities or musicians who deliver a performance or create an album just to make money. Also, you may find yourself questioning businesses sold to larger companies. People feel local businesses help to define the culture of an area so when these companies close because of overwhelming competition, resent is sometimes held against one or both companies.

If you’ve ever owned or worked intimately with a small company, you know the effects of competition are much more rattling. Normally, competing against others of the same size can have positive effects if handled appropriately. Most small businesses ultimately hit a sort of ceiling – only in rare scenarios will a small business become wildly successful.

This is especially common for telecom. A few companies dominate most of the market which only allows smaller providers to grow until a cap is reached. It’s not very common for a company to surpass this ceiling, venture into what lies beyond and compete with large businesses.

Some businesses are pleased with stagnancy as long as profit is consistent. Others will see sale as either a way to retire, fund a new venture and sadly, sometimes to pay off an enormous debt.

Breaking through the barrier

Very rarely does a company have a chance to become a major success. So the fact that Zula, a new UC application, is expanding its reach to a broader audience, a look into this rare event is in order. On the surface it appears boring as platforms offer similar tools to Zula which includes everything you would expect, from voice conferencing, group SMS and file sharing. So what makes Zula so special?

By using plugins for social media platforms including Facebook, Google+ and LinkedIn, the app can message any person in your contact list after you provide your login credentials. Those who are not Zula users will receive a request message to install the application to their device. Once signed in, regardless of the social media platform (if any) you use to sign in, you can contact others who are registered with Zula and pester others who are not.

This isn’t an amazingly unique trait from a technical perspective. However, it is brilliant from a business standard. A point always comes in a conversation where two people are coordinating a video chat when one has to ask, “What do you use?” Rather than debate over the platform for the call, avoid the situation all together. Zula makes it easy for people on disparate platforms, especially professionals who may only use one or two services..

Zula the Impressive

So is Zula really that much better? Yes and no. The concept isn’t too innovative but it does function well. Part of this is likely to do with the fact that former Vonage founder, Jeff Pulver, probably has a lot of insight in this business having built one of the most successful VoIP platforms to date.

And did we mention the money? Also brought up in the TechCrunch article is the fact that a second round of seed money is coming from Microsoft Ventures. The amount is not being revealed at this time. I wonder what Microsoft is plotting? Sounds like Zula and Skype may soon be roommates at the Microsoft Empire.

About the author  ⁄ Andy

Andy has been creating articles and blogs for WhichVoIP for many years. He has vast knowledge of the VoIP industry and as an Engineer he designed many products in the telecommunicators sector.

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