Ooma

Ooma

Type	Public
Traded as	NYSE: OOMA
Industry	Telecommunication services
Founded	Palo Alto, California, U.S. in 2004 (2004)
Founder	Andrew Frame
Headquarters	Palo Alto, California
Key people	Eric Stang, CEO
Products	Voice over IP
Website	www.ooma.com

Ooma is a consumer telecommunications company based in Palo Alto, California, in the United States that allows its users to make phone calls anywhere inside the United States or anywhere inside Canada with low monthly service fees.^[1] The Ooma service supports fax machines. After an initial purchase, customers only pay applicable government taxes and monthly access fees. The company was founded in 2004. Actor and producer Ashton Kutcher started with Ooma as its creative director. However, in 2008, Ooma revamped its sales and marketing strategy with a new management team,^[2] replacing Kutcher with Richard E. Buchanan, formerly of Sling Media, as their chief marketing officer (CMO).^[3] Ooma's initial product was a "VoIP in a box" device which used peer-to-peer VoIP technology to let users make phone calls over other Ooma users' landline services.^[4] In January 2008, Ooma terminated the use of peer-to-peer technology, allowing users to completely eliminate their current POTS telephone service.^[5] This service is restricted to "residential use only", which is defined as non-commercial usage and under 5000 minutes of outgoing calls per month.^[6] Consumers simply purchase an answering-machine-sized device, called Ooma Hub, or Ooma Telo.^[7]

The service, launched in September 2007, is different from other VoIP services in that it is paid in advance through purchase of hardware rather than through monthly fees or a term contract.^[8] Ooma raised $61 million in venture capital, and its product was sold by over 5,000 retailers in 2009.^[9] After the initial purchase, there are no monthly fees besides the regulatory fees and taxes.^[10]

Funding

Ooma raised Series A funding of $8 million in January 2005, Series B funding of $18 million in December 2006, Series C funding of $16 million in September 2008, and Series D funding of $18 million in June 2009. Venture firms involved in these funding rounds include; Draper Fisher Jurvetson, Worldview Technology Partners, Draper Richards, WI Harper Group, The Founders Fund, and TDF Fund (Telecommunications Development Fund).^[9][11][12]

Business model

Ooma relies upon revenue from the initial price of the Ooma box and from subscriptions to its Ooma Premier service.^[13][14]

Ooma Office is a service designed for small businesses that functions much like the Ooma residential service including the same free calling in the U.S. and Canada but with several additional features found in many traditional big business phone systems such as "virtual receptionist," phone extensions and the ability for callers to access extensions directly, call transfer, music while on hold, ring groups, and conference bridge, among others. Like the residential service, the purchase of a central unit, different in appearance from the Telo, is required. Additional phones and devices accessing the central unit is identical to the residential system including direct hard wire at the central unit, Ooma Linx to connect other business type phones that are not DECT 6.0 compliant, and support for fax machines. Pricing for Ooma Business starts at $19.99 per month per line.

Service outages

As with any VoIP service, calling depends on the uptime of power and Internet access. However, older Ooma devices can maintain service in the event that either power or Internet access is out of service if it is also connected to a legacy POTS line.^[3]

On April 13, 2009, Ooma's calling and voice mail services were unavailable for approximately six hours. This, according to the company, was because a fiber-optic cable serving one of the data centers that house its servers was severed. Service was sporadic during the time as back-up systems went online. Following the outage, the status of Ooma's service was made available through Twitter.^[15]

On January 1, 2010, an outage affected some Ooma customers. Twitter was abuzz with the news, and tweets allowed customers to interact with the company and receive updates on Ooma's status.^[16]

On August 17, 2011, a brief outage affected all of Ooma's customers. Phone services as well as the Ooma web site were down. The outage was caused by an Internet connection problem at Ooma's servers, and affected many Ooma customers. Facebook and Twitter accounts for Ooma were abuzz with angry customers, and Ooma released a statement via Facebook and Twitter that the outage would last approximately 1–2 hours. As of 09:00 local time (PDT), service had been restored to all customers, while access to Ooma's website was slowed down because of heavy traffic from Ooma boxes reconnecting to their servers.

Telo

Ooma Telo was released on October 1, 2009.^[17]

The Telo offered unlimited, free VoIP calls within the United States and features bluetooth integration, and HD voice. A new, cordless DECT 6.0 handset was also released as an optional complement to the Ooma Telo. The handset, dubbed the Ooma Telo Handset, features HD voice capabilities, an online phone book, speaker phone, and musical ring tones. The kit is expandable to four handsets. According to Rich Buchanan, Ooma's former chief marketing officer, Telo "helps combine the home phone and cell phone so you can enjoy the benefits of both without any compromises."^[18]

Feature and pricing changes

Along with the release of Telo, Ooma introduced new pricing and terms.^[19]

Ooma Premier service's price was raised. With the premier package, users get Multi-Ring, Do Not Disturb, Enhanced Voicemail, etc. Users will also receive Caller-ID with Name, which was removed from the basic package following the release of the Ooma Telo. Ooma Premier now offers access to Google Voice extensions for customers with Google Voice accounts (Ooma Telo only).^[20]

Ooma Basic customers are charged monthly taxes and regulatory recovery fees (which vary by location), and get unlimited calling within the U.S., low-cost international calling, free Ooma-to-Ooma calling, basic voice mail, basic caller-ID, call-waiting, and E911 service.^[21]

Customers who purchase the Ooma Hub/Scout combination (also known as the Ooma Core), regardless of when it was purchased, will continue to receive service under the previous terms and conditions, which include not being subjected to paying the applicable taxes. Core customers will also get a maximum of 5,000 minutes calling per month within the United States, voicemail, Caller ID (with Name/Number), and Call Waiting (with Caller ID) included, as well as E911 services in the basic package.

Ooma Mobile HD app updated for iOS 8 can receive and make calls. Users can configure inbound calls to ring their home phone, mobile app, and/or an alternate number.^[22] This gives users full access to their home phone service and calling plans at any time on-the-go. For Android, the app currently offers outbound calling only, but has been revamped with a fresh interface and top features from the Ooma iOS app. The new version of the Ooma Mobile HD app is free to Ooma subscribers and available now in the iTunes App Store and Google Play store.

White Rabbit VIP program discontinued

Some customers who have the Ooma core are facing discontinuation of service sometime after March 31, 2014 unless they pay to upgrade to new hardware and accept new terms and conditions. These customers were part of the original beta team known as the “White Rabbit” VIP program.^[23] This program involved releasing 1,500 units to help establish a nationwide network and to publicize the Ooma product.^[24][25] These customers were promised free service for the life of their Ooma device including not being subject to monthly taxes and regulatory recovery fees as long as they paid a nominal fee of one penny for the hardware.^[26] The impending discontinuation of service on these units is only supposed to affect customers that received the discounted hardware not those that paid retail for their hardware.^[27] Once the white rabbit core is deactivated it can be reactivated under the new terms and conditions and will be subject to monthly taxes.^[23] The segregation of the core customer base is a reversal from Ooma’s previous stance where the Chief Marketing Officer grouped all core users together and promised both no changes to the feature set and no regulatory recovery fee for all core customers.^[28]

Number porting

Ooma allows customers with existing land-line, cable, DSL-based VoIP service, or mobile service to port their number to Ooma, provided their number is available and able to be ported. A number may be ported free of charge if the customer purchases the Ooma Premier service at the annual subscription rate.^[29]

Executive departures

In 2010, five executives either resigned or were terminated by Ooma. On February 7, 2010, Buchanan resigned as chief marketing officer, according to his Twitter page.^[30] On August 13, 2010, Buchanan died due to complications from Type 1 diabetes.^[31]

In August 2010, Tami Bhaumik resigned as vice president of marketing, and was later replaced by Jim Gustke. She commented on her resignation through her Twitter page.^[32]

On November 4, 2010, the names of Peter Scocimara, Vice President of Customer Support and Engineering, along with Aaron Duran, Vice President of Sales, were removed from the Web site. Both positions were replaced, with Jamie Buckley becoming the new "Vice President of Customer Service", and Tim Sullivan becoming the new "Vice President of Sales".

References