At CES 2009, Ooma Hopes For a Second Act

40 Comments

oomateloOoma, the Palo Alto, Calif.-based VoIP phone hardware and services platform that has been struggling to live up to its initial hype is going to take a second run at mainstream success. At CES 2009, the company is launching the Ooma Telo, a wireless handset that wraps the original Ooma phone system in a mobile unit. Ooma has raised a total of $43 million.

ooma-handset1If you frequented Amazon.com this holiday season, then you might have noticed that Amazon was pushing the original Ooma device hard, though it’s not clear how that impacted sales. I am looking forward to the launch of this new wireless version, to see how the platform has actually evolved.

The company previously made some strategic mistakes, including an ill-conceived marketing strategy with actor Ashton Kutcher, and the initial product launch was fraught with problems. The biggest problem was that Ooma was too expensive for VoIP’s market segment, which includes penny pinchers. Since then, Ooma has tried to mend its reputation. It brought in new management that has focused on the consumer electronics channels and slashed prices. Ooma Founder Andrew Frame was recently replaced as the CEO by Rich Buchanan, but he remains with the company as its chairman.

40 Comments

tom

I just signed up for Ooma about a week ago. I needed tech support because of a complicated installation, and initially the wait was about 10 minutes (compared to Comcast, lightning fast). We thought the problem was solved, but I needed to call back on a Friday afternoon at 4:30. (Good luck most places) A cheery tech was on the phone in under 5 minutes, and he stayed with me until we got it done – cracking jokes, and generally keeping me calm. Also got the problem fixed, which was not their problem, it was my odd setup. Awesome call quality. I would say they have fixed their problems with support if this was an indicator – and I always remember to compare it to my internet provider or landline phone company response.

Susan

> I use a different VoIP service that costs me $10/mo for two lines

What service is that?

John

I am amused by the people that are saving $150/mo using this, what kind of phone service are you buying? I have Verizon FiOS and my Internet, TV, and nationwide calling all cost about that! I can’t imagine what kind of usage pattern could save that kind of money.

I use a different VoIP service that costs me $10/mo for two lines. I kept my old phone number, and I get all the advanced calling features that are mentioned for the premium package for OOMA.

My other big problem with this service is the same as a previous poster, you’re buying an overpriced VoIP box. Heaven help you if they go belly up, because that box instantly becomes worthless. I paid $35 for the VoIP controller I use, more in my comfort zone. :-)

Mark

Ok, so, you buy OOMA on sale for $213 w/free shipping from either Amazon or Newegg.com, you paid $35 for yours, so let’s say that the OOMA now costs $180 more than yours.

You pay $10/mo (apparently) for VOIP AND you have Verizon nationwide calling which must cost you $20/mo. So, you’re paying $30 a month. 6 months from today we’ve spent the same amount of money. In 8 months, I’ve saved $60 – enough to buy your $35 VoIP controller AND have money left over to spend on a different VoIP provider.

Sure – it’s a lot out front, but REAL QUICK it pays for itself and starts saving money.

My wife and I are buying one as soon as we move to Ohio (and dropping our cell phones – grad school is expensive even when it’s free). The way I figure is, we’d be paying AT LEAST $25/mo for any other calling plan that includes long distance, so in 9 months we’re saving money. If the company goes belly up in a year – big deal – we’ve saved money! If it goes belly up in 3 years, I still don’t care – I’ve still saved a ton of money.

Paying more up front in exchange for reducing recurring expenses later on is a SMART thing to do. Like buying a hybrid that gets 60 mpg instead of a car that costs $10K less but only gets 30. How long does the car have to last before the hybrid is saving you money? Well – the equation is:
10000 = price of gas*(miles driven/60)

Figure gas is $2/gallon (yeah right!) you’d have to drive 300,000 miles to have the price’s equalize.
Figure a more reasonable $4/gallon and you’ll only need 150,000 miles (which is very possible and reasonable to expect from a well engineered car)

Just because the initial investment is high, if it reduces future costs – it can easily become less expensive.

Also – the lack of a bill is nice each month – keep more of your future paychecks.

Andres Barrera

I think Ooma is very good and cheap but for the international call I am using nexus123.com is good and cheaper

jm

I can’t understand why people would buy an expensive specialized box that if the company went out of business, you have a useless expensive specialized box. I just have a good old Linksys PAP2. PAP2’s are reusable if I choose to change voip providers. I pay one cent per minute, free incoming, and a free phone number. If you know what you’re doing, you don’t need a specialized box. I could buy 20,000 minutes with the $200 I didn’t have to spend on an expensive box!

The Dude

The reason is the quality, freedom from one less monthly bill, and the ROI is massive. Even if they do go out of business, the ROI for most people is around 6 months. So the real return will be $1,000s for most people before the company would go belly up.

Bill

Watch out for the “free for life” pitch. I just paid for my box with “lifetime” basic service, and got the “Premier” service I didn’t want for a 60 day trial. Email notifications were constant for the $99.00 per year “Premium” service. I DIDN’T SIGN UP FOR THE PREMIER SERVICE….SO MY LINE WENT DEAD EXACTLY AFTER THE 60 DAY TRIAL…TOO COINCIDENTAL? I don’t think so…beware the gift from horse’s mouth.

POPO

I had no problem.
Premier service went down after 90 days but basic service is working so far so good.

Albert Urban

Ive had my ooma for a year. Its done paid for itself I wish the best for Ooma. If by some bad chance it fails, I’d have no regret. The quality is great. I had vonage before. Their servic isnt that bad though,but I went ahead and made the Ooma plunge and have been happy ever since.

brian

2 Problems. The first is when I bought my system for $240, but that wasn’t so much beceause I was promised a $50 gift card. So $240 – $50 = $190 right? Wrong, it is taking forever to get the international card credited to my account. I email almost every day about it.

If you call the support line, be prepared to either:

wait 20 minutes for an answer.
Many of the times, if they make you wait over 25 minutes, the line drops the caller, so your customer wait time could be 25, 50 mins. ect.

Be prepared to call back 5 or 6 times and or 6 to 20 people, Be prepared to send emails and get emails and calls like “It is almost fixed”, “Ill put a ticket in for that problem” Why do you need to put a TICKET in when I am calling you now? I just waited 20 dang minutes! Wait a few days and call back, you are at the top of our list for fixing that problem.

I really think they have a list of excuses to blow you off about your problem. Most people get too frustrated to deal with them and don’t call. So in this case they win, because they must save tons of man hours with these technics.

Unless you are an expert in all things computer and networking, do not buy an ooma.

Unless you have patience of steel, and don’t mind waiting 20,50 or 100 minutes do not buy an ooma.

If Ooma offers you anything like gift cards for buying, or getting more people to sign up, don’t believe it. 100% untrue.

The only problems they answer are ones that people make public, and post all over the forums complaining. Especially in the OOMA phone lounge, where they can see your number and information and know that everyone there are customers and watching your posts.

brian

If you go on the omma lounge and read the forum you will see many many complaints about customer service never returning calls or email.

In my case I was promised a $50 gift card, I did contact support and after a while and emailed me back they said I should have the credit in one week.

It has been more then 4 weeks, no customer service callback or email, and no $50 phonecard. Others in the forum have the same problem.

Some of the problems with Ooma are not really adressed unless you do something like calling them out in a forum. Then it seems some of the people got help to quiet them down.

I am having trust issues with the company right now, but the Ooma works well on my 3M DSL. Once in a while i get a horrible Echo. But all in all, it works well. I wish they would just spend some time and effort into keeping their word, and getting better customer support.

Steve

I love Ooma! I love Ooma better than sex! I wish I could have sex with my Ooma! Wait, I am having sex with my Ooma! Oh myooma!

John

The trick to get to the Ooma help is to choose the existing members options. I also had problems with their customer service when I was researching their product and had questions. I finally gave up one day and chose the option for existing customers and got through. They answered my questions. I called twice and both times waited about 3-5 minutes and this was during peak business hours around 11 AM Pacific.

I’ve been using it for about 2 weeks now and love it. Set up took 10 – 15 minutes max. Sound quality from Ooma end is great, and on the other end, it sounds like someone on a cell phone. There is a slight delay as with cell phones and other VoIP. No biggie for me, since I’m getting loads of features free. I love the instant VM notification to my phone, email, etc. I love viewing my call logs on line. I truly hope they stay afloat. I agree with one of the poster, if you do the math, it will pay itself off.

I chose not to port my number over because of our home security, Tivo and DSL but lowered the existing phone line to the bare basic, no frills, measured calls, no long distance or anything. Even though I didn’t port my number, I chose not to integrate my existing phone line but decided to have a new number assigned by Ooma so I can utilize all the features it provides.

I would recommend at least a faster broadband connection. If they’re still around in August, I plan to switch to cable. Currently, my connection is close to 5 mbps down and 650 mbps up. I’m streaming the Netflix Roku and have various wireless computers connected. So far so good, but more speed is better, isn’t it always.

I really hope this company stays in business.

Slona

I have been wit OOMA for 5 months and I am very happy. I used lingo before, but OOMA voice quolity is much more superior. I do not understand the isues people have with OOMA. Instalation is very easy. You just have to plug in 3 cables plus the power suply…

paul@ooma

@ Eric

-I’m sorry, I did not mean to go around your answer. I don’t sit on message boards and defend the company, I have no need to do that. I was browsing the web and came across this and I simply dropped in to say “Hey, I know Ooma has support problems but we are working on them to get better” not making excuses. I am not involved with the answering of e-mails, I am on phones, so I would not be able to look into your e-mail personally.. If you like you can e-mail me @ paul.gonzales@ooma.com and I can see if I can help address your issues.

From,
Ooma Support Team Member

Ron

I have ooma now since last April.It’s a great product. I ported my old number over to ooma. I don’t know what others have read, but i do know there is a lot of misleading info out there from 2007 on the net, most of these so called experts saying ooma wouldn’t last a year. even know they are wrong, What difference does it make? I have not paid a telephone bill in months which has paid for the unit over and over. But if you don’t feel comfortable with buying a this product. Don’t buy it. I’m not pushing it.

Eric

Paul.

Thanks for nothing. I was asking for help, but all you gave me was a political statement. That is bad support. The first thing I know about business is that you don’t sit on message boards defending yourself. You solve problems. Maybe you should be answering my email I sent you four days ago instead of giving me some slick reply. I was asking for help, not an excuse. You should hire a mentor to mentor your company in Lean ( Toyota Production System) or Six Sigma Lean.

Paul@ooma

@ Stan – I cant get into specifics, but let’s just say the company is not going anywhere..Our sales just keep getting better and better.

@ Eric and other potential customers of Ooma. I assure you that the Ooma product is a great product.You will be very satisfied with it. It is no secret that our customer service is lacking right now, but we are building our staff to help serve our customers better. We are also integrating a lot of on-line tools so we can help the process go smoother. It is growing pains of the company and we are working to get through them.

From,
Your dedicated Ooma Support Team Member

Eric

I read about the product, and it seems like it works fairly well. I’m really interested in buying it, but I have found out the customer support is really bad. On their site it said they couldn’t port my number, or give me a new one, but other local numbers can be ported. I tried calling customer service, but apparently it is only for existing customers. I even then tried to go through the extensions for existing custmers, but I was on hold for more than 30 minutes on three different tries. I even sent an email to their customer service, and still haven’t recieved nothing. Its been over 3 days. I finally gave up. Maybe someone here can help me. I’m not entirely sure I want the service now, because of their failed support, but will consider it if they can figure out the phone number situation.

The Dude

If you do buy it, the patrons on the Ooma forums are incredibly helpful and active. I’m a new Ooma user and I absolutely love it and have gotten all of the support I needed directly from the Ooma forums.

Even if the company goes belly up. I will be saving money so fast that it still makes sense. For my situation I have a 6 months Return on Investment and save $450 each year after that. They will be in business for at least several years since they are putting big stock in the TELO product. For anyone that uses a landline and has reliable Internet Service (isn’t that most of us?) this should be a no brainer.

The Dude.

Al Salas

I have been saving about $150 per month over Verizon..the quality is great….this is a product that deserves to survive…I am going to be buying my third OOMA. I have it at home one office and now going to replace ATT at the main office.
Great Product!

Stan Freid

What is your financil situation, close to bankruptcy?

Sorry to be so blunt but if you can credibly reassure me I’ll buy Ooma

Stan

Adil

I think Ooma will do well to get some support staff on board.

I have actually bought an Ooma unit, but held off breaking the seal as I had a couple of questions, but I cannot seem to get through to them!

The wait times on hold are ridiculous, and to add icing to the cake, the on-hold call just drops the connection after about 18-20 minutes. I have tried choosing both the pre- and post-sales options and it seems the calls are routed to the same bloody queue!

Scott

Ooma is a total no brainer. I too was an early adoptor. Even when there were some patchy times, Ooma support was always right on top of things. To think I have not had a phone bill for over a year, and call internationally for peanuts. If Ooma can get past this gowth period there will be no stopping them. Superior technology and products. Anyone reading this….go with Ooma. You will never regret it.

Mike

I got Ooma in September, 2007 and was one of the first non-beta adopters. I was using Vonage two-line, did the math and figured even paying the approx. $450 I broke even in about 8 months. For a one line user, the payback was about 15 months. For me, this was a great deal. I don’t understand why people just couldn’t pick up a calculator and figure it out.

Rob Mowery

Om – this will def. be interesting to watch. When I bought my Ooma (also learning through here) and swapped out my Vonage, it was the best choice I made. No longer any monthly phone bills. The Voice quality is much better than Vonage and I have had no real issues to contend. My only concern is that the company does well enough to stay in business. They have built a quality product and while their customer service is not the best, it is still better than I had with Vonage. While I close my Vonage account, I still have the box around just in case Ooma goes bust. But I think if they market the product right and figure out a hybrid approach (lower the equipment cost if people sign up for their premium service ($12.95 a month).

I think the real problem all these companies will have, is that how many of us really need our home phones anymore? Mine is just a backup system. Mobile and VoIP with Fring or Skype on mobile devices seems to make home phone systems obsolete. Perhaps Ooma should figure a way to leverage the mobile market in some manner? Perhaps they should look at Video Conf (try to beat Cisco and others to the market)?

Om Malik

@Raymond, Glad to hear that you are still loving the service and the device. After so much anger at them, I was wondering how people are reacting to ooma

Om Malik

@brian

We should know more by end of this week. I am betting the release is quite soon. If I find out any more details I would let you know. :-)

ashok

Hey Om,
would you mind letting me know to. I was planning to buy ooma but have deferred the decision pending launch of Ooma Telo.
tha.
Ashok

Raymond Padilla

I wish Ooma all the best. I got my first Ooma products through this site (thanks Om!) and while there were some rough patches with international calling, I’ve been thrilled with the product for the last six months or so. The voice quality is excellent, the features are plentiful, the international-call pricing is very competitive, and now that the international kinks seem to be gone, the product just flat-out works.

Brian

Any idea on when the telo will be released to the public? I’m anxious to buy it, but I haven’t heard any news on an official release date.

Comments are closed.