Interview with Steven Francesco, CEO, Cohere Communications

You offer services to SMBs mainly, which is now a crowded space? What is your unique selling point there?

Apart from maintaining high call quality, we also deal with organizations that require diversity on their network as well as flexibility in their growth. We are probably the only provider for contingencies in the network to ensure service availability.

You have been through the market downturn having managed Nx Networks. What advice would you have for start up companies in VoIP?

Everyone thinks that VoIP is an easy business to replicate and support. It is probably a lot more difficult operating in an unregulated market. A lot of new companies get into this market and panic and start selling on price alone forgetting to provide quality. So if they are going to enter this market, they better know what they are doing. Otherwise not only will they suffer but their customers will suffer fairly quickly.

You have been involved in acquiring VoIP companies in the past. We see some of the startups merging in the VoIP market. Does merger of startups usually work?

Everybody wants a rollup strategy right now especially since VoIP is a crowded space. Problem is that everyone thinks that they are worth a billion dollars even if they are losing money. They believe they are selling services like MySpace and Google is buying. They don’t realize they will be selling dial tone which has being commoditized for over 100 years now.How far will Microsoft’s entry change the SMB VoIP market?

What does Microsoft do? They put every single function from email to IM to call management to Video to conferencing, everything on a single box. If that box goes out my whole system is out. The other thing is Microsoft is guaranteeing 4 hours response time. Most businesses cannot sustain 4 hours outage. Fixing can take even longer. The other issue is that it demands high skill set and getting trained people is costly these days.

I believe Microsoft, Cisco and the big guys need to get smarter. They need to look at Sun and IBM who make high availability a reality. There are gaps which will be filled within time.

There are a lot of activities surrounding Web 2.0 right now. Will too many options make things more complex for enterprises?

Yes I also believe that having too many options does not allow cohesiveness throughout the organization. I believe organizations are beginning to mandate and standardize more and more on specific ways to communicate and who the vendors are that supply those technologies. But I don’t see it stopping. It will rather grow. Firms like eParameter are doing active monitoring of corporate communications. Not only for your IMs, emails but also for the voice. There is a concern about employees taking unauthorized advantage of corporate communications infrastructure. That is also an issue.

What has been your personal experience with Voice 2.0 demands among the SMBs using VoIP and what about trends in this area among large enterprises?

I see this mostly confined to collaboration right now, so services like Webex. I think video will be playing a big role going forward in customer interaction.

You also offer conferencing services. Conferencing application is reviving through certain web mashup offerings like Iotum and mirror number providers like Rebtel. How do you see conferencing developing from here on?

Conferencing will become ubiquitous within applications. Currently conferencing does carry a price tag with it and probably will end up blended with VoIP services going forward. We see conferencing as a necessity. There are so many free websites that offer conferencing. But there is no guarantee of quality. While dealing with businesses, they have to be assured that the service is going to be there and there is a price to be paid for that.

Are any of your customers using FMC and what are the prospects of FMC in the enterprise space from a service provider's perspective?

We have customers that are looking at it right now. We are engaged in projects in Europe for fixed mobile convergence.