"Independent commodity VOIP is dead," Frame says. "Vonage and SunRocket educated the market on VOIP, but they were not built with the best business models in mind. Who wants to offer a commoditized service and compete on price?"

    Frame says ooma offers investors a value proposition different from that of most VOIP services. "We make money from gross margins on the hardware; we're profitable from day one [meaning the day the subscriber signs up]; and we're not subject to churn."

    Still, there is some question whether ooma can make money from customers after they have purchased the company's hardware. The company will charge a nominal fee for international calling, on the order of one cent per minute to Europe and eight cents per minute to India. And as it gains more subscribers, ooma plans to offer fee-based enhanced services to collect ongoing revenue.

    During the last three years, ooma has secured $27 million in venture capital through two rounds of funding. Investors include Draper Fisher Jurvetson , The Founders Fund Management LLC , WorldView Technology Partners , Draper Richards LP , and WI Harper Group .

    Summing up his confidence in ooma's business model, Frame says, "You can't raise close to $30 million without figuring these things out." [Ed. note: Then again, SunRocket raised $80 million without figuring these things out.]

    Funding alone is not a guarantee of success, says Jupiter's Williams. "A lot of people thought SunRocket had good backing, but it's a challenge for any company trying to disrupt the current voice model."

    Yankee Group Research Inc. analyst Patrick Monaghan says ooma's viability will be a matter of "keeping an eye on its overhead," but he believes the company is on the right track to gaining consumer acceptance.

    Noting that consumer sultimately think with their wallets, Monaghan believes ooma has an opportunity to gain customers in the VOIP market. "People are going to be wary for a while," he says, "but in six months they will have forgotten about SunRocket."