Brad Feld

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Disrupting the Conference Call Market – Again

Jul 16, 2009
Category Investments

Yesterday, Gold Systems released their new Conference Server.  This is a new conference call product built on top of Microsoft Office Communications Server. 

I’ve been a user of conference call services since the early 1990’s.  I remember when you had to set up a conference call in advance with an AT&T operator, get a unique dial in number, pay a ridiculous fee for the entire experience, and worry about how much the bill was going to be as you anxiously sat on the call and listened to people go round and round about whatever topic the call was about.

In 1997, I was a seed investor in a company called Vstream.  While it started off as a video streaming business, it evolved into one of the first “reservationless conferencing” systems.  After several name changes they settled on Raindance, incorporated web collaboration into their products, built a meaningful and profitable business, went public, survived the Internet bubble, and were ultimately acquired by West Corporation.

When Raindance launched its reservationless conferencing service, I remember it being a huge breakthrough.  I got this little credit card like thing with a unique conference call number (8006333) and a pin.  I could set up a conference call by telling people the 888 number to dial into (888-742-8686 – god, it’s absurd that I can remember this shit – I need to do a major garbage collection routine on my brain) and giving them my conference call number.  At the time, this was super magic unique; today it is commonplace.

Reservationless conferencing rapidly accelerated the growth of the conference call market on one dimension while web collaboration accelerated it on another dimension.  As this was happening, the telecommunication costs dropped steadily.  I vaguely remember the cost per person per minute on a conference call being north of $0.30 at one point; at each board meeting we talked about the number being smaller ($0.15 was a big moment).  Of course, at $0.30 / minute the margins were absurd; at $0.10 / minute, not so much.  While this was happening, the whole Free Conference Call movement emerged so in some cases the price was theoretically free (note the important use of the word theoretically.)

I left the Raindance board in 2002 so I missed what I expect were endless conversations about the impact of VoIP on the whole shebang.  Fast forward to 2009.  We are all really comfortable with reservationless conferencing.  So comfortable in fact that we probably don’t notice that you can do what used to take a data center full of gear and pipes on a high end server today running Microsoft Office Communications Server.  Oops.  Hi Mr. Disruption.  Welcome back.

If you want a quick feel for whether this is cost effective for you, take a look at Gold Systems’ ROI calculator to see what your savings over your current approach would be.  And – if you want more info on this, contact my friends at Gold Systems.