I admit, I was intrigued by a device you plugged into your phone line and Internet connection and you could make free phone calls forever. Then I got the price sheet. $440 for two phones. But you need to keep your land line. Dividing out the cost of fixed rate long distance into their price and the breakeven point is (drum roll please), 3 years. Then and only then are you ahead. 
For those of you who work in corporate, imagine in this day and age trying to float a project with a capital recover period of 3 years. Oh, and we all know they'll be taking a bath for many years. Why? Because the only way they can avoid paying for local connect charges is if someone else's Ooma device happens to be in the local calling area of where you're trying to call. And also supposed that the local phone company isn't going to put the kabosh on strangers using your phone line, or your ISP for carrying stranger's VoiP calls.........
So of course I replied to the email and asked them the last two questions. And here's what they sent back (from donotreply):
Thank you for submitting your inquiry to ooma
Customer Support. In order to better service
our customers, we've created a new and
improved ooma Support Site.
To access the new site, please log into
the ooma lounge and click on the Support
tab. You'll find new and exciting
features such as a more robust
Knowledgebase full of new and improved FAQs.
You can also email or chat with one of
our ooma Customer Support representatives live!
The new and improved ooma Support Site is
just another way ooma hopes to deliver fast
and accurate responses to your inquiries.
Hmmm, I have to be a paying customer to get information before being a paying customer. And there is no support email on their website, but there is the White Rabbit area, where I find out that they were giving this away FREE to a lot of people (o.k. a couple of pennies). So while everyone else got it for free Ooma is telling me I'm a sucker and should sent them money.
I may be proved wrong but this looks like company that is going the way of SunRocket after they burn through the VC money.
Ouch! This looks like a company that decided they could do the whole marketing thing by reading a few books! Also a great example of how an operations problem is, in fact, a (huge) marketing problem.
According to the web site, Ooma has openings for Senior Marketing Manager, Copy Writer/Online Editor, and Senior Web Developer - all of whom should have been hired before they put up that ghastly web site. Frankly, I'm embarrassed for them.
Posted by: Mary Schmidt | 10 August 2007 at 10:03 AM
Ouch! This looks like a company that decided they could do the whole marketing thing by reading a few books! Also a great example of how an operations problem is, in fact, a (huge) marketing problem.
According to the web site, Ooma has openings for Senior Marketing Manager, Copy Writer/Online Editor, and Senior Web Developer - all of whom should have been hired before they put up that ghastly web site. Frankly, I'm embarrassed for them.
Posted by: Mary Schmidt | 10 August 2007 at 10:03 AM
Exactly. My current AT&T bill is about $26 per month for my basic landline service plus local calls (not including long-distance). My long-distance (which I get elsewhere, not AT&T) is about $14/month. Assuming Ooma makes the $14 go away, the question then is what will the $26 change to (I understand Ooma changes the features on my line). If I will be letting all other Ooma users make calls using my AT&T line, then I could see the fees for local calls possibly going up too (I don't pay for unlimited local calls now in the $26).
The difference between the $26/month and what I'll pay after Ooma is where I break even on the $400+ (assuming it will actually be less than the roughly $40/month I pay now including US long-distance calls). Is the warranty on the box longer or shorter than that? Will I even want to use it that long? Etc.
I've sent Ooma an email asking about this before/after math and EXACTLY how they will change my local phone service, but I haven't received a response yet.
Posted by: Dennis | 11 August 2007 at 07:44 PM
I'm glad you see through this "phony" scheme. I have lots of experience in the technical side of the PSTN aspect of this, and can tell you that there are many technical problems with what OOMA is proposing. And the serious security/privacy problems associated with one user's calls going through another's phone lines. Just think of the repercussions if someone makes a bomb threat using your line! Of course, you can eavesdrop on all the calls that go through your line to ensure that this doesn't happen.
Posted by: Mike P | 15 August 2007 at 09:13 AM
Me thinks you all have this wrong! Anyone who has Vonage or some of the other VOIP companies can tell you that you DON'T keep your land line. A cell phone would be handy if there was disruption of service but unlike land line service, when the lines go out Ooma, Vonage and the rest send your voice messages to a virtual mail box. Try that with a land line!
With VOIP, you simply plug your cable modem into the back of the Ooma hub, then plug the outgoing phone wire into an existing wall phone jack. Voila! Your phone service carries through the entire house on any phone. Good bye Ma Bell!! So you don't need a land line period. Your calls are coming in over your cable. Folks it's not perfect but it's here to stay so get "jiggy wit it" and good luck!!!!
Posted by: Bob | 29 August 2007 at 01:29 PM
In fact as I think of it, you actuall disconnect your land line when you hook up your VOIP. Sometimes the phone company will send a surge or something back through their lines and this could hurt the VOIP equipment. End of the land line debate. Don't ask anyone at Circuit City or BestBuy because they don't understand the process.
Posted by: Bob | 29 August 2007 at 01:33 PM
Bob,
With Oooma you do keep your land lines. That's how they work to hook up to the PSTN. Think of a peer to peer network using everyone's land lines to connect other peoples calls. Vonage has direct connections to a PSTN. Also my overarching problem with VoiP is the QoS is not there like land lines. I liked to use Skype to call Canada and Europe, but if they happen to be down, no big deal.
Posted by: Bruce Fryer | 29 August 2007 at 02:53 PM
Bruce, I called OOMA today at(866) 452-6662 and spoke with a tech by the name of Vince. He assured me that OOMA works exactly like Vonage (my current carrier) and that you do not need a land line. They recommend having a land line or cell phone or both as a backup, but in no way do you need a land line to make calls with their product. I don't want to get into a spitting match with anyone, but if it works like my Vonage hub it's a real deal. 'Just wanted to follow up with you about this. It's been nagging at me since this blog is of the impression that a land line is required. I agree that that would kill the entire deal.
Posted by: Bob | 31 August 2007 at 10:03 AM
Bob,
Hmmm, now I'm really confused about their business model. So let's say you kill your land line. And everyone does that. Figure this device cost about $100 they're selling for $400. That leaves them $300 to cover PSTN connections forever. The only way this could work is a Ponzi type business model where they assume they will always be bringing in new customers to pay for the connection charges for the old customers. Or this is a come on and they hope that a large percentage of their customers keep the land lines and they use those to bypass the PSTN charges.
It's still not passing the sniff test here.
Posted by: Bruce Fryer | 31 August 2007 at 11:48 AM
Well, I agree with you! It does sound too good to be true and usually that spells trouble. And keep in mind that I have the quote, "Early OOMA Enthusiast" invitation sitting on my desk and have been laboring whether to purchase or not. My Vonage service ($25/month) has been absolutely great this past year or so, and I am somewhat familiar with the technology, but that 'too good to be true' feeling keeps me from pulling the trigger on the OOMA purchase. I feel that you are more informed than I, so I will hold off for awhile. What the heck do I know Bruce? I'm still busy scraping the Ross Perot stickers off of my Delorian automobile. 'Nice blogging with you. BOB
Posted by: Bob | 31 August 2007 at 12:07 PM
I have an OOMA, I ditched my landline all togather. I did not port my original phone number. In fact with the OOMA service I can have multiple phone numbers, for instance, one phone number in NY and one in CA! You are your own phone company. The voice is more clear than a landline. I paid $199. If I can get 3 years out of it, it has paid for itself. If I can get more then all the better. Call blocking is far superrior. I log into ooma lounge view all my inbound calls and simply click the "block" box. No more spam phone calls. I love it.
Posted by: The dude | 02 February 2009 at 10:28 PM