After the troubled times of companies like Vonage and SunRocket, it's a little surprising that a new VOIP startup could get $27 million in venture funding from some of the biggest venture capital firms in Silicon Valley. Yet that's exactly what Ooma did, and today the 50-person startup launches beta testing for its flagship VoIP service.

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Ooma hopes to make its money by selling a $400 Linux-based gateway device (shown below) that plugs into the customer's broadband connection and existing land line connection (if there is one), and into the existing phone wiring in the house. When users pick up a phone to make a call they hear a special tone indicating that Ooma is on and that they're in VoIP mode.

For calls to non-users VOIP services like Vonage typically must rely on the land line networks of other operators (like AT&T, for example), and that costs money--goodbye free calls. Ooma says it's found away around that problem.

Ooma anticipates that many users will choose to keep one regular land line hooked up, and Ooma's scheme takes full advantage of that fact.
Ooma uses those lines to connect all the Ooma boxes in a given market to form a sort of peer-to-peer grid. Each Ooma box in the grid can be used as a gateway to route calls placed by other Ooma users.

said by Sly :

Those are some good points... I just can't figure this one out. /leaves scratching head

said by mazilo :

Does anyone have an Ooma token to spare? If you do, please PM me the token because I sure would like to try this to see how good Ooma is.