Consumer VoIP startup Ooma launched nearly a year ago and offered consumers free phone service for life, all you had to do was buy the hardware for $399.
Just one problem. The sticker shock of paying $399 up front for the hardware put a lot of users off. And there weren’t many places you could actually buy the Ooma. It went on sale on their website in August 2007. When a number of key executives left the company (we grabbed Sarah Ross, their former VP Communications), some blogs said they were in big trouble.
Amazon started selling Oomas later in the year, and customer reviews are overwhelmingly positive.
A year later the company is still going. They added marketing executives Rich Buchanan to the team from Sling Media earlier this year - the guy that led the Sling marketing team to sell 100,000 units in its first six months of operations, and 500,000 units as of mid 2008. Buchanan brought Tami Bhaumik with him from Sling as well, who is now Ooma’s VP Marketing.
Ooma is also now being sold in 26 southern California Best Buy retail stores, with a nationwide rollout scheduled later this month.
The company has also tweaked their business model. They still offer the free service for a reduced price of $250, with optional additional features in a premier service add on for $13/month. The premier features include a second line, three-way calling, message screening and custom rings.
I’ve been a happy Ooma customer for a year now. I also use Vonage, and Ooma’s call quality is better and there are fewer problems in general. If I didn’t have one I’d buy one now.
What’s the actual “risk” here? Just that the company can go belly-up? Will it work in the US only? What about bandwidth consumption? *goes searching for the answers*
Evan - the phone should work anywhere in the world, as vonage boxes do. The only real risk is the company goes out of business, which would stop the service.
Oh great, when you think there’s something good, something has to cloud your thoughts. http://ooma-revealed.info/
What’s the minimum upload required? If it’s stated at all.
get a skype phone and a skype-in number. much better choice imho. and intl calls are 2 cents a minute.
I have been using skype for two years now. I like skype. But with skype you have to pay $90/year and you have to turn on your computer every time. Ooma works like a regular home phone and you can hook up your fax to it as well. I’ve been really happy with Ooma.
Sam
I am thinking about buying OOMA - just curious how long you have it, which version, how many lines and if there has been any down time
Adam
i’m still sad that they didn’t ship me any scouts with my white rabbit account, nor gave me any white rabbit tokens to pass on. they said they were out of stock of scouts, and would ship me some when they came in stock, but never did. anyway, voice quality is pretty good. I also like the fact that if people call and leave a message on it, I get an email and can also listen to the message online.
Delighted to see Ooma going well, I was and am a huge fan
Hats off to Andrew Frame for sticking in there
Ooma is a really cool and I hope they continue to do well. I hope to see them sell some more units though because with such a cool idea and such a simple concept I think a lot of people would be interested in it, the only problem is the fear that they would go out of business and you could no longer use the service.
@2 I am not so sure that Ooma will work outside of USA. Ooma anticipates that the box will be connected to a single PSTN line; unlike Vonage that allows users to connect from any place. Based on last year’s information, Ooma changes PSTN subscription. So it is possible that the setup procedure prohibits connecting to other PSTN carriers. Also, every Ooma box that doesn’t connect to US PSTN undermines their connectivity architecture. So I suspect more that they will discourage foreign connections.
Thanks for the update. I have considered buying an Oooma phone for some time now, but I was hesitant after I heard they might go under. I’m glad to hear they are doing well and I might just get one in the near future.
What an awful, awful business idea.
I rolled my eyes when I heard about this last year.
Just use Skype and pay $30 for normal number calling and $60 for your own 10-digit phone number. For $90 a year you get a complete phone number.
You can’t beat cheap folks!
My only hesitation would be the risk of bankruptcy but their management team and backing seems solid enough for them to last at least as long as you need to break even on the initial purchase. Did anyone else notice that Ashton Kutcher is their Creative Director?
the part that i do not really get. if i am going to buy a device in order to never again receive a phone bill(i really like that part) i defiantly want to cancel my landline. it is my understanding that ooma requires me to have a landline. this is a massive flaw.
Tom, the concern was that if the power went out in your area or your internet went down you would not be able to use your phone which is true. However if you already have a cell phone this should not be a major concern. I have the OOMA device without a land line and it works fine.
I wanted to know do you still keep your land line phone number with OOMA. I call ATT and they said I can get rid of my land line and just keep the internet but I would lose my land line number. Is this true?
I looked at the website. There is no keypad and nowhere on the site can you quickly and easily (even with all the FAQ) find out how to actually dial a number.
When you click contact customer support–one option is email which requires a login.
These are both simple, obvious things that a good website should have….and the lack of such basis simple information and options worry me greatly.
Looks like a great “tech” product not ready for prime time
ooma has some serious privacy implications since it uses customers’ PSTN termination points to make local calls. Therein lies the problem:
“Stick a phone coupler into the Ooma to double the line and you can then pick up the handset receiver to listen in on any remote caller using your Ooma box.”
http://blog.tmcnet.com/blog/to.....-booma.asp
Ouch…
What a horrible puff piece! Here is why,
-> shouldn’t this be covered in CrunchGear?
-> Best buy photos? When did TC start going to the field to take pictures? These pictures are so awful in quality too.
-> Amazon reviews are overwhelmingly positive? Amazon reviews aren’t the most accurate and have very little accountability.
-> Comparison to vonage? “call quality is better and there are fewer problems in general” what? Isn’t that a bit vague for a comparison argument. The reason why vonage has quality issues is because people actually use it!
-> Overlooking obvious problems. The main problem with charge up front isn’t the “shock of paying” for customers. Even if customers are willing to pay, how the hell will Ooma pay off server costs/operating costs in the long run?! At some point, the initial payment won’t cover these costs. Unless, this is just a bait, Ooma does plan to eventually charge customers monthly.
This article is such a rosie-odonnell-like-turn-off. I have a bandwidth cap. I want a refund on the ~1mb i used to view this article.
Hmm, my company currently uses skype but we have been having problems, I will def look at this service as a replacement.
Personally, I couldn’t see the real Arrington in this post. Where is he and o, those “obsessively” sentences?
Would I get a US number with it? or 1800?
I’m currently very happy with Vonage, but I’m always on the look out for an even cheaper deal. Do you think I replace Vonage home phone with Ooma and not miss a beat?
I’ve been using Ooma for sometime now. I will highly recommend Ooma. It’s an unbelieveable offer and it works very well.
I was lucky enough to receive a whithe rabbit token and have been using ooma for a year with total satisfaction. Quality is much better than skype, which I no longer use. Great part about ooma tying in to local phone service is that when your broadband service goes down, your phone still works for local and emergency calls.
I’ve had to contact ooma once for help but that was due to a senior-moment on my part. The ooma team was responsive and effective.
@15 Infomercial is the word you might be looking for
As a white rabbit user (thanks TC!) for ~a year now, I’ve been VERY happy with how OOMA has worked out for my household. The two line feature is great for families, the voicemail works well, and the int’l rates are quite good. I also use Skype and agree that may be cheaper but unless you fork over money for a Skype handset or connector, you still need your computer around to make calls, don’t you? I’ve had my cable broadband go down quite a bit in the past year, so having my basic landline connection is still handy for making sure I don’t miss incoming calls. The one gripe I had was that int’l calls sometimes didn’t connect or quality was terrible, but that was early on when it seemed like they had issues managing call volume. They addressed it to users directly and I’ve had no issues in 2008.
So as a basic replacement for making phone calls, with some valuable additional features that apparently you now have to pay for, my experience has been quite positive. Then again, I didn’t have to pay anything for it, and if I did, the company’s long term viability would give me pause - but really they only have to be around for a year to pay it off, depending on your avg monthly phone bill.
A couple points of clarification for those who haven’t followed the evolution of ooma since the White Rabbit program last year:
- ooma no longer requires a landline. You can use it like a substitute for Vonage or Skype in pure Internet mode only.we continue to offer the option to connect a landline) for those who have one or want to keep one for various reasons (no dry loop, have security system, etc). Using it in Internet mode maximizes cost savings, using it in landline mode maximizes reliability and safety. The choice is up to the user and they are free to move between one mode or the other.
- We support number porting, E911, caller-ID with name and interface with regular home phones like a traditional ATA. This makes for an easier transition from a previous fixed line service vs. Skype.
- The price for a bundle of a Hub and Scout is now $249.99. With the average phone bill in the US being around $50 including taxes and fees, the ROI is less than 6 months.
- Some of our premium features have been moved to a subscription service called ooma Premier. Its 12.95 per month or 99 a year and is optional.
Dennis Peng
VP of Product
So Ooma no longer requires a land line. Good, but one question remains: If someone chooses to keep a land line, to ensure 911 access and to ensure service via the PSTN if the Internet (or Ooma) go out, is it possible to set up the Hub so that it will use that phone line for your own local phone calls (placed from a phone plugged into the Hub or Scout) but not to use it to allow anyone else to place calls to your area?
Come on and Oom Oom Ooma Oom… You gotta Ooma Ooma Ooma Ooom! Come on give it a try!!
@13 You plug a phone into it, then dial that. RTFM.
Hmm last year when I checked it, they didnt allow making calls from overseas?
thinking about using this for my salon business. would that be a bad idea? i didn’t see anything about how it would function with an alarm system. overall, i’m going to give it a try.
Not surpisingly, active TC commenters like Skype. I think you guys need to keep in mind there are families out there who like their set of 5 cordless phones from Costco. With Ooma/Vonage, they don’t need to learn how to operate a new device (just get it setup, which was SO much fun with Ooma - seriously, the manual is the most beautiful thing I’ve read in a long time). The Ooma feels like an answering machine - even dad can figure that out. Skype makes zero sense for them. It’ll be very interesting to see if Ooma can “cross the chasm” into the mainstream without having first won over the hearts of those of you looking to pay zero for the device and zero for the monthly service (not the most attractive market anyway).
I got an Ooma for free after SunRocket broke my heart. The Ooma treats me so well, I can’t think of what could be better. I don’t know if I’d actually pay for it - perhaps my HotSpot@Home will support a complete phone conversation by the time my Ooma stops working (whether because of bankruptcy or hardware). I also messed around with a couple magicJacks - I tried on five different computers and never managed to make a phone call, but I did have my computer audio running over my phone system, which allowed me to listen to Pandora from my cordless speakerphone.
I don’t get how this can be profitable in the long run. Lets say the phone actually costs 35 bucks. That means the company actually gets $225. Minus this and that (shipping, labour, and etc) probably about $120-150 left for the phone plan.
But the company is bound to lose money if that person uses the phone for a long period of time.
You’re right Albert. Ooma can’t survive forever based on a one-time fee with “free” service for life, which is obviously why they’ve switched to a “pay per month” option. I’m sure any “free” service will end soon. They only promised 3 years free to those who already ponied up the $400 or so.
As I’ve detailed, there are lots of reoccuring costs involved in providing anyone with phone service, and it’s only a matter of time before other expenses (taxes, fees) that have always been imposed on the “real” phone company will be imposed on anyone claiming to provide an equivalent service. Unfortunately, so far, our regulators seem to be so caught up in the Internet hype that they haven’t been able to see the reality. I think they are catching on, though, and will soon start treating the Ooma’s of the world the same way they’ve been treating Verizon, ATT, etc. That will add a significant per month charge on every subscriber and destroy their economic model.
ooma plans on adding more and more features in the upcoming years. They are building a customer base in order to offer other features in the future. i.e. cutomized ring tones, additional lines and numbers, future hardware with video options and more. ooma isn’t going anywhere, their funding is ridiculous because the investors know that the business model is solid. If you wish to talk to people through your computer, this probably isn’t the product for you. On the other hand, many families and businesses could save money with ooma by simply using a normal phone. It’s plug and play with ZERO monthly fees for the lifetime of the hardware. It only takes about 10 months of vonage fees to pay for an ooma! Look anywhere and people say the quality is better with ooma. This product is going to be flying off the shelves when it goes national at best buy. It’s thriving at the Los Angeles stores, I sold 6 in the first weekend (I work at best buy) and that’s with ZERO advertising. I bought one last week as soon as I saved up the $249. The decision is simple… BUY AN OOMA!
I’ve been using ooma since November and absolutely love it. Best VOIP call quality (I think it’s better than a landline). I had Vonage for 2 years and very quickly replaced them with ooma. I now have 1 hub with 2 scouts and each scout has it’s own virtual number and it works well. 1 home line, 1 business line, and 1 fax line (faxes don’t work well).
I check my Voicemails through their website too. Unlike Vonage where you can only download the message, with ooma you can listen to your voicemails, categorize them like emails, and download them too.
I’ve been recommending ooma to everyone.
Just FYI, if you to choose non-landline you can then take it with you anywhere, overseas etc. My cousin will has a US number but is using his ooma hub in Switzerland. Works very well.
At the time I purchased it was $399 for a hub and $59 for a scout. NOW, it’s $249 and you get the hub and 1 scout with it. I have no complaints paying more for it. Plain and simple, the thing just works, and works well.
Seriously, you’ve gotta try this. I was skeptical at first too.
Dennis, or anyone else from Ooma. I use one of Skype’s premium plans and am a pontetial Ooma customer. I cannot tell you how put off I am when I visit a companies website and the entire thing sounds like a scam informercial. Ooma may NOT be, but I’m frustrated by the emphasis on “free”, without giving me any clue how you make money. As an example, here is the marketing BS on your site:
“Your one-time purchase of an award-winning ooma system gives you free home phone service with the outstanding, uncompromised voice quality and ease of a traditional landline. That’s because we’ve architected the ooma system to partner with your home phones and high-speed Internet to deliver state-of-the-art calling without monthly bills.”
So you have “architected” the system to be free?! Give me a break. Treat my like an intelligent consumer, if not on the main page, somewhere in your FAQ. First, how long is “free”? Forever? Because if you say it anywhere, I sure could not find it. The website just keeps saying “free”.
Secondly, of you want me to buy your product so you can give me “free” telephone service, explain to me somewhere how you can do that and make money. Because I WANT anyone I buy a product from to be making money, so they will still be in business a year from now. I want to make sure you don’t subscribe to the business model that states that you will sell something that costs you $1 for 95 cents, and make it up in volumen ;-). Seriously, there are far too many Internet companies that are here today goen tomorrow. If you want me to give you my money, don’t set up a webpage that looks like a late night informercial.
David notes that Ooma is “free forever” but couldn’t find where on their web site it says how long “forever” is. The fine print I found before (maybe they hid it better), said that they only promise “free” for 3 years.
I have used ooma for 4 months now and I love it. I tried magic jack and skype, they are not even in the same class as far as quality of sound and connection. You do not have to use your computer with ooma just turn your modem on and plug in and your up.
Being an older woman who is timid about change, especially because I don’t hear well, this has worked out so well and I hear the transmission and my messages more clearly than any answering machine I’ve purchased in the past.. Despite some confusion on what I ordered and what was shipped, I got what I wanted at the price I was quoted $300 less $50 debate. I figured in 10 months it was paid for and here I am now free and clear.
I hear that ooma laid off the entire web development team yesterday. What’s next - customer support?
I don’t know what you heard Mike P. but I can tell you I have ooma and its working great. My monthly bill is great too. I use to pay $48.85 a month. now for the last 4 1/2 months $0.
I said they laid off their web development team - all 5 if them - last Friday. That doesn’t mean that the phone service stops working immediately, but, if the company is already in the mode of laying off needed departments, it can’t be long before the service stops working. Right now it would seem likely that they can’t fix problems with the “Ooma Lounge”.
Mike, I heard that too. Actually, I heard that one person was from support too. So, as much as I think they have a great product, I personally think they’re sinking as a company. I think this latest move to layoff their web team shows that they’re flailing and trying to stay afloat. It’s like them saying, “Well, we’re just going to try to sell what we have in stock and then close our doors”…. the water is coming in and they’re loading people onto the life rafts.
Luckily, I didn’t purchase them recently and so I have saved some money. I think that anyone that makes an ooma purchase right now is throwing their money away. I highly highly doubt the company will be around until next year.
I just bought this today from Best Buy for $250. Asked all the “what if’s” as in what if the company disappears. Best Buy says they back it for 5 years - if ooma goes away Best Buy will refund the $250, within the 5 year period. I don’t see this clearly on the reciept and will go back to the store in the morning to ask for it in writing. Currently an AT&T customer, with all the taxes added on, I break even after 2.5 months of service. Anything after that is gravy.
I seriously doubt that Best Buy would give you your money back, even in the near term. Generally, when you buy something, the warranty is from the manufacturer, not Best Buy.
Jeremy says he sold 6 (in Best Buy) in one weekend. That’s because customers trust sales people in Best Buy, like Jeremy, who must be pushing this product. I honestly can’t figure out why Best Buy would risk their reputation on this product.
Tom, as I said above in July that I have ooma. I hope they are around for a long time. It is a great service and to boot you can’t beat the price. Nobody gives you a second line with it own number free. For me it’s already paid for itself. They seem to be selling a lot just by word of mouth. If you check the ooma forum, you can see the things that people have trouble with and how fast they get a response to fix any problems.
I have been using ooma for about five months now and it is great. Kept the same home phones and works just like the standard POTS service. Don’t knock it unless you have really tried it.
Wow, I am impressed. Ooma blows Magicjack away. Help to spread the word so these guys stay in business…Buydotcom has it for $230 shipped.
I have had my Ooma for 2 months and could not be happier (just like EVERYONE who actually has the product).
Before I had an answering machine at my home, no caller ID, paid for all my long distance, etc.
Now I still have my same number, have voice mail that emails and text’s me when I have a message, caller ID I can check my call log on the computer plus the new service they just added that forwards calls from your Ooma to another number (my cell phone). The Ooma rings at my house and on my cell. When I pick it up on my cell, the caller id is also forwarded and I am prompted to whether I want to answer the call or send it to voice mail.
In 5 months (3 more from now) I will have the system paid for in what I was paying for traditional service.
All the negative responses about the system are from people whom don’t have the service, but would rather spread the cancer of what they perceive as being the negative attributes surrounding the company. “I heard they just laid off their tech support”, “I heard you need a landline too”(which you don’t), “Sounds like it is going to flop to me”, “I’d rather stay with my Vonage”(and keep paying monthly fees just like traditional service).
You will notice that the people who have the system love it and don’t have anything bad to say.
If you are too ignorant to see the benefits of new technology, just like that crazy internet/ overnight mail delivery service/ airplanes/modern medicine, then that is fine. Go back to your shack in Alabama, gather the family around the AM radio and keep being thankful that you were able to live through Y2K without the world imploading.
My shack is in Mississippi, not Alabama!!
However, Sean… it seems that you’re missing the largest “negative response” about Ooma — their service is too good, as you say, but they don’t have a monthly fee. How in God’s name can they continue to offer me service to the POTS month after month when they don’t make any money off of me besides the money that went into engineering, producing, managing, advertising, & selling the device?!?
Please somebody answer me that. I could understand it if one out of every 5 Oomas were directly connected to the local POTS… but that isn’t a requirement now. So if everybody expects to continually connect to Big Bell for free… when not much profit is being made to begin with… I think lots of you Ooma users will be in the same boat as the SunRocket crowd.
It’s not that I don’t want Ooma to succeed. I do. But I just find it hard to believe. There are soo many questions about this company that haven’t been answered in the past year. Give me some intelligent answers that lead me to believe the company’s strength and security will only get better… and THEN I’ll pay you $250.
This just in… ooma is pushing a new $199 price for its “core” package. And Costco now offers the package for $180. Even if I get six months of service from it, it’s a break even! With the extra services ooma provides free, I’m making money after that.
I have used ooma for just six weeks, but I’m sold. Here are the cons:
-One afternoon of “service outage” (that’s what the ooma tech called it…but it has happend only once.
-Two instances of phantom ring… the phone rings once, but nobody’s there…five times in a row. This happened on two days.
That’s it, and now for the good news:
-Excellent voice quality. Those of us at home and the people on the other end of the line here very excellent voice quality.
-The extras: voice mail, voice mail notification via my e-mail account, a complete in/out call log, free caller ID.
-Low band width consumption. I have run DSL Reports speed tests from my computer when someone in the house is using the ooma phone system. Absolutely no detectable impact on my DSL up/down speeds.
-Did I mention how much I like free phone service?
What’s the difference between Ooma and a ponzi scheme?