Dial M for Skype

The more I think about Microsoft acquiring Skype, the more I think it was a pretty smart move. The initial reports were all about synergies with various MS and Skype technologies, upon further reflection, I think the endgame will be carrier disruption.

Skype was Skype’s own worst enemy. Now obviously they did something right – and their valuation gives them every right to scoff at any criticism. So I’ll just say that their strategy worked up until now. Skype got pretty far with a closed network, but its time now to open up.

Skype for Asterisk was an anomaly. The Asterisk PBX could actually dial SkypeNames and see presence/status into one of the world’s most closed networks. Killing Skype for Asterisk could only make sense to Skype.  Skype Connect became the revised strategy, sell access to the network via VoIP’s lowest common denominator known as SIP. This is a more mainstream and efficient solution for interconnection, but reduces the value to basic voice. Skype rides the popularity of SIP trunking and positions its robust network as a dumb and cheap pipe for the PBX. Skype for Asterisk was probably viewed as a hinderance to Skype Connect’s success.

Skype had the right vision with Skype Everywhere. It was successfully delivering the vision; PCs, Macs, Tablets, Smart Phones, all available globally. Right vision, wrong implementation. Every devise required a Skype client. They missed the concept of “Other People’s Money.” Microsoft excels [sic] at Other People’s Money – Look at Yahoo, Nokia, and RIM.

1. MS has a heritage of partnering – something even Steve Jobs admires in Microsoft. MS is less proprietary than Skype. Operative word is “less,” Microsoft prefers defacto standards over real standards. Skype has the potential to create a defacto standard for UC interop.
2. Metcalfe’s Law is why Skype was worth $8.5 B and why MS needs to keep on growing it. The more users on net, the more users to communicate with. This is telephone economics 101. Skype is the largest rich network of its kind. 
3. The general trend in enterprise communications embrace rich communications. Enterprise UC – from vendors such as Avaya, Cisco, and even Microsoft all include presence/IM, wideband voice, and video – but only for internal users.
4. Copper is dying as we embrace VoIP everywhere. We need to free ourselves from the shackles of analog/copper networks. Stop equating ‘dial 9 to get out’ with ‘dial 9 to lose rich communications’.
5. Interop is a disaster, wideband audio, video, presence federation are all a decade away from mainstream interoperability. Skype isn’t interoperable, but has Metcalf on its side (see 2 above).
6. Smart devices and multiple applications are turning carriers into dumb pipes. They are racing to the bottom on pricing while delivering the same telephonic experience Ward had when he called June.

Initially, I thought Lync was the Skype opportunity for MS, and that’s where it will start. Microsoft may see a small increase in Lync sales. But that’s small fish compared to the Skype potential. Skype can define a UC interface open to every UC vendor (hosted and premise) that supports more than colleagues, but connects everyone together with rich communications.