The “buzz” word bigger than podcasting to the general public is VoIP. Voice Over IP (Internet Protocol) is basically Internet telephony, making voice calls over the Internet. Why, you may ask? Main reason for most users? Probably the price. It is cheaper than traditional phone service. But that is not the only reason, as I will explain.

As I am sure you might have noticed VoIP is everywhere. Cable companies are selling VoIP, branded as OptimunVoice (CableVision) or Digital Phone (TimeWarner). Cox and Comcast will soon be rolling out their versions. Telcos are selling it to offer the new technology to its customers and stem the tide on shrinking wireline customers. VoiceWing (Verizon), CallVantage (AT&T), or Net2Phone (IDT). Internet Service Providers (ISPs) are selling it like SpeakEasy, Covad, and AOL. There are also some dedicated Internet phone companies like Vonage, SunRocket, Packet8, Lingo, and IConnectHere. Seems everyone is trying to get into what can become a very lucrative market. There are so many of them now it is far beyond this post to even mention them all.

As all these providers share similarities, there are also many differences. Mostly in the business model they use and in some cases the technology. Quality is a big factor when comparing VoIP services to POTS (Plain Old Telephone Services) from traditional telephone companies like Verizon or SBC. The QoS (Quality of Service) that you have become used to from the major carrier’s point-to-point switched phone network still has better more consistent connections than most VoIP connections. But in the days when cell phones out-number wireline service VoIP is considered good enough. In some cases it is better sounding than today’s digital cell phones. VoIP is getting better all the time as new codecs are used and bandwidth increases.

Most VoIP providers have voice mail as well as some other features. It might be good to mention services like 911 are not yet universally available to VoIP users. Congress is looking into that and will probably make it mandatory sooner or later as VoIP replaces many wireline phones. One thing for sure VoIP is not going away. As broadband really takes off in the U.S., so will VoIP. Even more popular in Europe and overseas where broadband leads the U.S. in penetration. Dual mode phones selling in Europe are popular that allow for easy connections between POTS and VoIP on the same unit.

Portability is also very important. VoIP is already having an impact on the fast growing wireless cell phone providers as “road warriors” make calls from their computers and Pocket PC phones.

One service that has taken off in a big way and has become a new household name among us geeks is Skype from the makers of Kazaa based in Luxembourg. Kazaa is best know by computer users for downloading and file sharing, some have been illegal mp3s. Kazaa is a completely distributed peer-to-peer (P2P) file sharing service that shares bandwidth among its users with no central servers for distribution. Like Kazaa, Skype utilizes a similar P2P proprietary network for its VoIP technology. Skype utilizes its users computers and bandwidth to route calls.

Yes us geeks “Google” for info and “Skype” to contact each over. Over 150 million downloads of their software and many millions of active customers in just over one year of business! Although, some believe this number of downloads of Skype are misleading. I might agree as they seem to be counting downloads of each updated version of Skype, not actual users. But when you are using Skype the software client gives you the number of people online and it is always in the millions. You cannot argue that Skype’s popularity is growing and becoming quite mainstream. Trust me, the traditional telcos are noticing.

Where Vonage had a headstart, Skype has grown much faster. It is really all about business models. Skype is more of a computer, take it with you, pay as you go service. Skype has software clients available for Windows, Mac OS X, Linux, and Pocket PC. Vonage based its business model to pit against traditional telcos. Although they do offer a “soft-phone” that runs on Windows and Macs. But it is an add-on service. You need to have a Vonage plan to use the Vonage SoftPhone at an additional rate. Their plan offers a phone adapter to connect the regular phone in your home. A lot like what the cable companies and telcos offer. Not really a take it with you service that is free from phone adapters bound to your home.

Vonage, OptimunVoice, VoiceWing, and CallVantage all have a monthly bill for services based on the amount of minutes you subscribed to or an unlimited plan. Every month the bill comes just like the telco’s did. Skype is a bit different. Skype to Skype calls are free. If you want to call POTS or cell phones you can buy minutes in as low as ten dollar increments. There is no time limit on when you must use them. Price is about $0.023 cents a minute in the U.S. and International calling is also dirt cheap (See Skype rates). They call this “Skype Out”. The only monthly fee is if you decide to purchase an optional “Skype In” phone number at $5 a month. This is so people can call you directly from POTS and cell phones. Voice mail is included with a Skype In number. Their voice mail’s outgoing message is recorded with your own voice and shows up when you open the Skype software. Once played back it is transferred to your local machine.

Skype includes a “buddy list” and IM (instant messaging) among its users. It allows for your profile and picture to be added that you can enable to be seen by other Skype users. They also offer conference calling. Skype utilizes encryption so your calls are secure before sending it through the Internet. You can load Skype on a Pocket PC “smart phone” and make Skype to Skype calls for free over Internet access provided by your wireless provider like Verizon EVDO or at “hot spots” if your Pocket PC has WiFi. With Skype’s low cost per minute this just might be cheaper than your cell phone!

Skype also allows for file transfers to other Skype users. There are also several useful plugins that provide extended capabilities available for download. As Skype recently has made an Software Developers Kit (SDK) available I expect to see the number of Skype related software to grow. Skype has a Toolbar available for Internet Explorer (who doesn’t) and Outlook. Skype recently announced Skype Zones, where you can make calls from more than 18,000 Skype-friendly internet hot spots round the world for $7.95 per month.

The sound quality of Skype calls and voice mail is quite good. I think better than my cell phone. I have called people using Skype and the person never noticed I was not on a wired phone. Skype has a decent user interface (UI) even though they still call it a beta.

Skype does now have a new open, standards-based competitor, that has impressed us early adopters called Gizmo Project. The Gizmo Project was begun by the engineering team at SIPphone, Inc. SIPphone, Inc. was founded in 2003 by Michael Robertson the entrepreneur behind MP3.com, Linspire (formally Lindows) and MP3tunes.com. Please check out his personal blog. GizmoProject offers software clients for Windows, Mac OS X, and the Linux is coming in September.

Is GizmoProject the “Skype killer?”

Maybe. But really it may be too early in the game to predict. Right now Skype has a large headstart. Long term that may change as Skype is being controlled by only one company and is using a P2P proprietary network, closed system. GizmoProject uses SIP, Session Initiation Protocol that is based on open standards. You can make calls to anyone that has a SIP number, even non GizmoProject users.

SIP (Session Initiation Protocol) is being utilized by many leading technology companies for interoperability. Companies like Cisco, Polycom, Tandberg, Marratech, AT&T, Avaya, IBM. Nokia, MCI, Lucent, Radvision, and many others belong to the SIP Forum who’s mission is to advance the adoption of products and services based on the Session Initiation Protocol. SIP has become an important industry standard.

So what are the differences between Skype and GizmoProject?

Right now, you need a computer to use Skype. GizmoProject can be used with an “unlocked” SIP enabled phone adapter or router without a computer. Available from companies like D-link, Linksys, Cisco, Spurra, and many others. Vonage, OptinumVoice, VoiceWing, and others provide a similar SIP enabled phone adapter. But generally they “lock it” so you can only use it with their service. This gives you the ability to connect to your standard wired or wireless phone you may be used to. With Skype all the available solutions in the U.S. require you to have a computer up and running to make and receive calls.

There are numberous USB phones, headsets, bluetooth devices, and other solutions that work with both Skype and GizmoProject. But since GizmoProject uses SIP and open standards there are more choices and you can “talk” without a computer. With GizmoProject you get the best of both worlds.

Skype utilizes a peer-to-peer networking scheme that actually uses your computer and connection to help route calls for others. This uses some of your CPU cycles and bandwidth. GizmoProject’s overhead on your computer is lower as it does not utilize peer-to-peer. It uses relay servers around the globe connected to the Internet for call routing. However, both are very firewall friendly.

GizmoProject’s “Call Out” service is similar to Skype Out. In the U.S., GizmoProject offers 1.8 cents a minute calls to POTS or cell phones. That is about 10% less than Skype’s U.S. rate. Calls to other GizmoProject users are free. So is voice mail. Skype includes voice mail when you buy a Skype In number or you can also purchase voice mail separately without a Skype In number. GizmoProject voice mail is a bit different than Skype in that you fill out a text box in voice mail preference in the software client and a generic voice is used, not yours. Voice mails are delivered to you with GizmoProject via email, which I like alot.

Audio quality on GizmoProject is using the Global IP sound technology and it is quite good. This is the same technology used with Marratech that I posted about recently. Several wireless phone providers are also using or considering Global IP sound technology and already have signed agreements. GizmoProject has a realtime call Indicator showing network issues that may affect call quality. A bit like the bars on your mobile phone or airport card on a Mac.

GizmoProject has built-in recording capabilities that records both sides of the conversation at very decent quaility. This is making it popular among podcasters. You would need to use a shareware application like WireTap Pro (OS X only) to do this with Skype as it does not have this feature built-in. GizmoProject has built-in sound effects that I found a bit cheessy, but I can see some people having a bit of fun with them. GizmoProject also has a “music-on-hold” feature where you can choose what is played. Sorry to say there is no integration with iTunes and it has to be in .wav format.

Some other features in the GizmoProject that does not appear in Skype are Interactive Voice Applications, provided by Tellme, which allows users to get real-time news, stock quotes, and weatheror play a game. Call Subject line which tells the person you are calling the purpose of your call before they answer, like email. Another cool feature is “call mapping” that shows the points of the call connecting on a world map that even has a satelite view kind of like Google Maps.

GizmoProject says it will add conference calling soon. Skype already has this feature. Skype is available for Pocket PC as well as Windows, OS X, and Linux. GizmoProject is available for Windows and OS X with Linux scheduled for a September release as I mentioned above. No announcements for Pocket PC as of yet. So no smart cell phone use for GizmoProject.

Both Skype In and Gizmo Call In numbers are available at about $5 a month bought in three month increments. Skype offers it in three and twelve month subscriptions. Gizmo Call In is available in three and six month subscriptions. Both offer incoming numbers for many different area codes in the U.S. Skype seems to offer a bit more but that is probably a moving target. Both services allow you to own multiple incoming numbers at the same $5 a month for each. Skype allows for up to ten incoming numbers. GizmoProject claims an unlimited amount. This is nice if you want to provide local calling for a business associate, relative, or a friend that is using traditional telcos for their phone service. Incoming call numbers are also available in the U.K. on GizmoProject. Skype being more international has numbers for the U.K., Denmark, Finland, France, Hong Kong, Poland, and Sweden.

GizmoProject lacks IM (Instant Messaging) or file transfer feature. Although, it does have a “point-of-presence” showing when your buddies are online. I do think lacking IM or file transfers is a shortcoming and one way Skype is more mature. I am fairly certain GizmoProject will add these features at some future time.

GizmoProject has a surprising nice UI for a new application. But quirks exist in both GizmoProject and Skype. Both can use some improvement. Understanding that both are quite new and still say beta. I am not complaining. Just pointing out there are some quirks.

Skype makes you type a “+” in front of every phone number when dialing. This is a bit hard when using the included dialing pad. This also creates a problem when trying to dial using Skype’s contextual menu (control-click) in Apple Address Book. Using Skype’s “Import From Address Book” gives an error message due to this. You would have to convert your entire Address Book to that format in order for it to work. Dialing with GizmoProject works fine without adding the “+” and importing from Apple Address was flawless. It would be great if Skype could have a preference to add the “+” for you, solving this problem.

Skype allows for the easy adding of picture of your choice in your profile that others can see when you are online. GizmoProject only allows you to pick from the available avatars they provide. With GizmoProject’s generic voice mail and this lacking feature I think it takes away from some personality you may want to add.

There is a work-around for adding your own personal picture in GizmoProject at least on Macs. I have not tried adding a picture on Windows. NO WARRANTY HERE. You can just right mouse click on the GizmoProject application icon in your Applications folder. Select “Show Package Contents”. Double click on “Contents” folder inside GizmoProject package. Double click on “Resources” folder. Double click on “avatars” folder. Add your picture to this folder as a “jpg” or “gif”. It must be about 64px by 64px. DO NOT TOUCH ANYTHING ELSE or you may break GizmoProject. Restart GizmoProject (if it was running) and double click on picture icon on UI. Select change and then select the picture you added. One thing to note. You may have to repeat this after upgrading GizmoProject. But maybe by then they will add this feature.

GizmoProject has on the Mac version a call forwarding feature. Unfortunately, it is not functional as of yet. Hopefully both GizmoProject and Skype will add call forwarding. Then you can send your calls to your cell when you are not near your computer. Skype can be made to do call forwarding by using a third party adapter, your Windows PC, and your POTS line. But would like to see this feature built-in to the app. This is the one area where some of the other VoIP services like Vonage, VoiceWing, and OptimumVoice offer more. As they offer call forwarding, call waiting and three way calling features right now. Both Skype and GizmoProject have a caller ID like message on your computer when a call comes in.

Neither Skype nor GizmoProject do video conferencing yet. There are rumors that Skype will be adding it soon. I recently heard Michael Robertson from GizmoProject say that video was not planned yet and that video was “only a novelty” in his opinion for communication. This is one point were I disagree with him. If Skype adds it. GizmoProject will need to also if it is to compete. Even the new Verizon iobi service has video.

What about Apple’s iChat AV? Better UI, great integration with OS X, good audio, good video, IM with AOL, etc. Well here is where Apple has lagged behind and Skype is blowing past them. Apple iChat AV as good as it is cannot call POTS or cell phones and even though they have some interoperability with AOL IM is still basically Mac only. I was hoping that Apple would have jumped into this fully and became a VoIP leader. I really believe they are blowing a great opportunity here. Imagine the integration with iTunes, iPods, podcasts, iCal, Address Book, iSight, Mail, etc. That would be possible if they extended the “digital hub” to phones! How about an iTunes phone that actually makes free calls to desktop machines? Maybe a reason to buy that phone that plays music over a Napster one!

Instead they have modified iChat’s VoIP technology and made it proprietary. If they do not jump in soon they will have to really play catch up even though iChat was available before Skype and GizmoProject. If they do this soon I bet Wall Street would love it. Hey, Apple! How about beating Skype and GizmoProject and making iChat AV into a “real” cross-platform killer app we all know you are capable of building? Please!

I think Skype and GizmoProject have real advantages over VoIP offers from the cable companies and telcos on price and portability. I think many of them may be forced to change their business models in the future. Vonage by making the software phone only an add-on will lose customers to Skype and GizmoProject in the long run.

I think people will adapt to VoIP over time and will want to “carry” it with them everywhere so they can make and receive calls the same way they do on say a european vacation as they do in their homes and at the same price. Having your buddy list, IM, file transfers, voice, video, email, and voice mail all in the same app is going to be very appealing to many as these apps mature.

Skype was almost sold recently to Rupert Murdoch’s News Corporation for nearly three billion dollars. Yes almost. Why is an “almost” sale important? Well I think we can see the value some businesses are putting into this technology if Skype was valued that high after such a short time in business. Skype may be sold down the road to another big player. Hey maybe “old man” Rupert saw open-standards GizmoProject and backed off quick?

I suggest if you have not tried Skype and GizmoProject you download the free clients and give someone a “ring”. And yes they do “ring”. By the way, GizmoProject even gives you twenty-five cents in free calls when you download it. Great idea. Skype, why not you? Apple, please wake up and hear the phones ringing!

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    | Tags: gizmoproject, skype, VoIP, vonage