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June 30, 2007

On Being a Skype Software Business Solution Partner

Over the past three weeks I have had the opportunity to attend the Skype sessions at the eBay-Skype Developers Conference, to meet with and/or interview several Skype Software Business Solution Partners (product reviews forthcoming), and to spend a day at eBay Live – especially in the exhibit area.

Out in the blogosphere, especially via posts from the mesh 2007 and Enterprise 2.0 conferences, we have also seen a few observations about how social networking tools and, in particular, Skype, are penetrating the small enterprise market. The combination of these activities has helped bring into clearer focus what it takes to be a successful Skype Business Solution Partner, not from a technology perspective, but rather an approach to building a sustainable business.

First and foremost – bring along some experience in a vertical market or solution:

  • Unyte has been providing desktop sharing services for several years;
  • Real Allusion brings expertise in graphic enhancement and animation to Crazy Talk
  • The OnState team brings over twenty years’ experience in developing successful Call Center solutions to its OnState ACD product,
  • VAPPS brings carrier grade conferencing technology and experience to HighSpeedConferencing.com
  • The Convenos team brings several years’ experience in building virtual meeting solutions
  • Evoca had been developing a call recording, messaging and transcription web service business around any telephony service for academics, media companies and political campaigns

Second: Be prepared to be a persistent, patient pioneer.

The evolution to the current Skype Software Developer Program removes some of the obstacles encountered by these pioneers; on the other hand they have been trail blazers contributing towards what is offered today.

  • But the most important advice comes from Dick Schiferli at Pamela: “Nurture your Skype relationship and maintain an appropriate level of engagement by building good lines of two-way communication with Skype”.
  • And don’t forget about Skype Software certification whose goal is to provide standards for quality assuance. As of July 2, Skype Software Certification will be required to become a Skype Partner.

Third: Ensure you have a value add product or service, not simply a feature

As an example consider Call Recording: Three partner products involve Call Recording: Pamela, Skylook and Evoca. In addition, Skype offers its own voice mail service but it’s simply that – voice mail with no PC access via MP3 files or other enhancements.

However, when you dig deeper you will find that call recording is a feature within each of these products/services. It is the value add proposition incorporating the call recording feature that differentiates each of the offerings. For instance:

  • Pamela offers (MP3) call recording/voice mail as one feature of a set of personal assistant utilities that enhance your overall Skype experience;
  • Skylook logs call recordings/voice mails into Outlook for individual PC archival purposes, integrated along with archiving of chat messages and call history within Outlook. In fact, with Skylook, you can manage all your Skype real time communications activity from Outlook and leave the Skype client in the System Tray
  • Evoca offers online archiving with web access and RSS feeds for website, weblog and podcast reference along with transcription and translation services but no voice mail service.

And if you investigate the respective pricing models for each, you will find they represent various approaches to providing business-driven value-add.

Fourth: follow Lou’s Rules. From Lou Guercia’s presentation at the “Concepts to Cash” seminar:

  • Rule #1: Develop a product that you’d like to use with Skype .. Something that enhances the user experience.
  • Rule #2: Don’t forget Rule #1 (when you get into the actual development cycle)
  • Rule #3: Keep It Simple Stupid (make implementation and operation intuitive)
  • Rule #4: Offer free and paid solutions
  • Rule #5: (not stated but implicit in his presentation) Bring your solution to Skype’s global user base in a way that requires no (or minimal) real-time tech support

Fifth: Use Web 2.0 tools and social networking to build your customer base:

While traditional SMB marketing programs will certainly bring results, a profitable business model for selling Skype Partner software involves leveraging Web 2.0 tools wherever feasible. Social networking has become a key business tool:

… the business of being an enterprise solution provider just got a lot harder. Over and over we heard repeated that the young bring their own networks and applications to business. And because these are mostly web based applications, not much can be done to contain them. Within a short period of time, we should expect millions upon millions of GMail, Facebook, and Skype users within every enterprise globally.

  • Unyte grew its registered user base from 250,000 to 500,000 in six months simply through the visibility provided by Skype Extras
  • Staff increasingly dictating the corporate IT agenda”. This forum entry is consistent with a story I heard while having lunch at eBay Live about a Fortune 500 company that blocked Skype internally but all their field agents use Skype to communicate externally.
  • Obtain third party reviews, especially in the blogosphere.

And from several comments heard at the developer conference:

  • Employees start using Skype and bring it into the business
  • Skype becomes a key communications tool for building business presence worldwide for small to medium businesses
  • Business investigates Skype Business Partner Solution and adopts one or more solutions
  • According to Unyte, each license drives four more Skype user registrations as the product infiltrates the business’s best practices

Skype’s introduction into (initially small-medium) businesses via products such as Convenos, Unyte and OnState is demonstrating that Skype Partner Solutions will be a primary driver for building the Skype user base going forward. When you hear of 100 license sales for Unyte and 200 to 400 license deals for Convenos, and leverage those into additional Skype user registrations, you start to recognize that business solutions incorporating Skype will become a key differentiator for Skype from other VoIP players and a key driver of new user adoption in what is becoming an otherwise very competitive market space.

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June 29, 2007

Skype Sighted on Nokia N800

A few months ago, in a post titled "Nokia N800 Internet Tablet, Just Add Skype and We're Set", I wrote about my experience with the N800 and how I found it quite suitable for "casual computing" where I do not need the full functionality of a PC but need something for casual web browsing, reviewing weblogs and even some communication.

Ken Camp has gone to the "geek extreme" and loaded a wide range of programs onto his N800 (including a weblog editor); the installation process for any of these is not what I would call "Install Shield"-friendly. Ken has successfully taken it along with a Nokia N95 on his frequent camping trips to keep connected.

I would love to have the time and resources to take an extended road trip and document the whole thing with my N95, N800 and Nikon D50. Since work keeps me plenty busy, that will simply be the trips that come. We’re headed back to Cannon Beach for another round in four weeks. That will include serious time at the tidepools and some horseback riding on the beach. Then in late September we’re off on an eight day cruise to Alaska. I won’t take a laptop along for that trip either.

Casual computing isn’t just about work. It’s more than doing your email when you’re on a day off. Casual computing is about the hyper-connected lifestyle, maintaining relationships, and sharing life events.

Yesterday Kevin Tofel at jkOnTheRun reported sighting a N800 running Skype in the Nokia booth at the Digiital Experience show in NYC. Seems like it will be available for download later in July.

The big news there wasn't a new device, it was a service, and that service is Skype! It's been a long time coming, but Skype support for the Nokia N800 is right around the corner. I got a chance to see it, but it won't be available as a download until some time in July. The Nokia N800 already supports Gizmo for VoIP, but the addition of Skype adds more choice to make a good mobile device an even better one.

Kevin also noted the absence of video on Skype for the N800. Given the lackluster quality of the N800's video when using its GTalk, its video quality may simply not meet Skype standards for video performance.

Ken has also determined that Skype is not relevant to him -- and rightfully so. He is looking for enterprise solutions but Skype is not targeting larger enterprises. Initially Skype was targeted to the consumer market. As a result of finding that 30% of their users were using Skype for their business activities (as confirmed by many whom I have encountered using Skype in their business), Skype is currently developing services and programs for the small business market. However, it now appears that Ken's admiration for the N800 is causing him to rethink this decision. Just can't miss the excitement!

I would argue his statement "Skype on a PC doesn’t add value for me today". In my case Skype has become my primary real time conversation tool, whether voice, IM, file transfer, video. All my day-to-day frequent contacts are on Skype ... as well as over 100 others. And, when I go to Ken's weblog on Firefox or Internet Explorer, I find his mobile and Grand Central numbers are Skype-activated. Click-to-Call via Skype. I don't dial phone numbers. No callbacks, no "minute stealing" involved. Two clicks -- one to trigger the call, followed by a courtesy one to confirm that you may be charged for using SkypeOut. And now I access my Skype contacts from my Blackberry. I had an excellent quality Blackberry-to-Blackberry call using IM+ for Skype Software this morning. I'm looking forward to the return of Ken's SkypeMe button.

Welcome back to the world of Skype, Ken. To paraphrase a certain sporting equipment company: "Just use it!".

And I'm looking forward to reviewing Skype on the N800 when it becomes available next month. (Hat tip to Andy for pointing to Kevin's post.)

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June 27, 2007

Skype Hires Search Engine Marketing Specialist

In a press release issued yesterday, an agreement between Skype and Bigmouthmedia was announced whereby Bigmouthmedia's services will be used to facilitate Skype promotion through search engine marketing activities.

Bigmouthmedia will work with Skype to manage its comprehensive organic search offering across the major search engines, initially within 8 geographic locations worldwide including the United Kingdom, France, Germany, Brazil, Italy, the Netherlands, Spain and Japan. The appointment comes at an exciting time for both companies with each expanding quickly worldwide.

Garrett Smith posted has some observations on this announcement in a section titled "How Can You Not Pay Attention to Search Engine Marketing"

Sure they have other concerns, but from my point of view (as an online marketer) what their site lacks is online marketing 101. For instance, something as simple as each product in their online “shop” having a unique title, has seemed to escape them, even though I told them how and why they need to do this … about 10 months ago … multiple times. I bet Skype has lost hundreds of thousands in sales over the past few years due to poor site structure and on page optimization.

I know a lot of people are critical, suspicious, and dismissive of search engine marketing, but i think that is foolish. It is like any other industry; it has its snake oil salesmen, but a solid, reputable search engine marketing agency, can do wonders for your business. If you are doing business online and have yet to reach out to an expert in the field, I implore you to do so. The results could take you from just another player, to the lead player in your industry.

Will this effort help to reinforce Skype's non-US market activities where Skype continues to find 85% of their user base?

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June 25, 2007

Coca Cola promotes Skype in Japan

skypecolabottlered

Hirosan caught this Japanese Coca Cola promotion.

Depending on whether you buy a Coca Cola Zero, No Calorie, or Classic (left to right), you'll enter to win a black, white or red headset for Skype. 17,000 BMH-E03 series analog headsets from Buffalo will go to the winners.

Coke's campaign puts 9.5 million Coke bottles (a million more than Tokyo's population) into 38600 nationwide convenience stores from June 4 to July 13. Chains carrying the Skype cokes include AM/PM, Circle K [sankusu], Three F, Seven-Eleven, deiriyamazaki, Natural Lawson, huamirimato, Poplar, Mini-Stop, and Lawson.

The campaign was initiated by Coca Cola Japan; Skype Japan just supports it.

Happy Monday, Social Media.

Wow, lots of news to wrap up from the weekend.

eBay is back in bed with Google,  at least when it comes to advertising. Love-hate relationships are so difficult; isn't there an easier way?

eBay is moving back to China, now with Skype portal partner TOM Online.

Boingo boingowirelessWireless is going flat rate for all its 100,000 Wi-Fi hotspots. All you can eat anywhere for €29 or $39 monthly. Hmmm. Responding to competition from Skype partner fon? Or from Starbucks?

TechCrunch is grandcentral spreading the unconfirmed rumor that Google bought GrandCentral. Right. What would the office-of-the-future want with a web-centric telephone service? Can you imagine GrandCentral integrated with Gmail? With your calendar? What I don't understand is why haven't eBay/Skype bid for GC? GrandCentral at Skype Journal.

Fring came out for Windows Mobile 5 and 6. IMG_1016More market opportunity. See the story of the fring sign traveling the world

LinkedIn says it will open up to developers... Next Year! Power users and developers begged LinkedIn to open up APIs to third parties for years. It's been an ongoing theme on the LinkedInnovators list. So what's the delay? Is it conceptual? You can't figure out why anyone would want to add to or improve the LinkedIn user experience? Is it technical? Jay Deragon is calling for Social Network interop. 

In American politics, it's looking like Republican Senator John McCain will drop out of the race for President. Is it too early to start scoring candidate policies on telecommunications, intellectual property, censorship, trade, and other issues affecting Skype, its customers and its ecosystem?

The VoIP Reseller : Searching for Successful Channel Business Models

One of the challenges of the emerging VoIP telephony market is building channel business models that are profitable in an industry where the market perception for VoIP is "free" services. For instance, the primary original draw to Skype was the non-existent tolls associated with long distance calls, especially overseas calls. Yet, as VoIP solutions migrate into the business environment, business managers are seeking "full business solutions" from what has become perceived as a "low cost" business space. This is providing significant challenges to VoIP resellers as they attempt to build a traditional VAR business when the market only allows very limited margins that cannot necessarily be made up in volume.

Andy Abramson at VoIP Watch threw up the gauntlet with his weekend post The Myth of VoIP Resellers:

There's one problem though. Lack of buyers.

I don't mean there isn't a ready made market. What I'm saying is these resellers for the most part still are marketing with a 1.0 mindset.

Garrett Smith, a VoIP reseller channel veteran at VoIP Supply, responds today in his blog, Smith on VoIP, with The Truth About VoIP Resellers:

While I applaud Andy for shedding light on the current state of the VoIP reseller marketplace, I do not agree with everything he mentions, and feel that, although many of his points/suggestions work from an ideological perspective, when it comes to the reality of being a VoIP reseller and growing a business in this marketplace, they just do not hold-up.

Garrett then goes on to provide point-by-point responses to Andy's observations. Check out both these posts for their respective perspectives on VAR opportunities in the VoIP market space.

Skype is looking for Value Added Resellers in Europe. One of the challenges I see is Skype's vendor partners' pricing of their products at a sufficiently high level that appropriately allows for support of the distribution channel. You can readily cut pricing to a level that may meet the market perception but where VAR's have no incentive to sell solutions. On the other hand web-based education and marketing can bring some of these solutions to smaller enterprises in a cost-efficient manner. Skype's participation in the distribution channel is going to require new business models not only for Skype but also for their partners such that both parties have successful and profitable businesses while delivering communications cost efficiencies to their end user business customers.

Innovation may bring "best-of-breed", cost effective technologies; however, it still takes top-notch people to deliver fully serviced "best-of-breed" solutions.

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June 24, 2007

Keen's Diffusion Fallacy

Andrew Keen is a snob.

Perhaps in a good way, but that's the point Handtiegelpresse von 1811. Printing press from 1811. Photographed in Deutsches Museum Munich, Germany.of The Cult of the Amateur: How today's Internet is killing our culture and assaulting our economy. I only respond to trolls like Keen to help myself debug(debunk?) sophomoric twaddle. Here goes.

Me: The rate of technology diffusion nearly always outpaces the rate of knowledge and cultural diffusion.

Books and the skills of writing and reading were concentrated in the hands of a few people who devoted their lives to religious institutions.

The printing press and public education changed that. Even little children could read and write, without becoming monks and taking vows of poverty and chastity (sorry, Keen). Most of the values and the hard won skills of the old technologists, like page illumination, were abandoned in favor of the minimal skills needed to use the new, disruptive technology.

1947 DuMont - Model RA-103 - Chatham (Called the "Dog-House" by collectors)60 years' ago there were about 44 thousand TV sets in the US (the 1947 DuMont Chatham pictured left). There were maybe a hundred television cameras, literally one in a million people were behind the camera. RCA Kinephoto - Kinescope Equipment (early 1950s)1947 saw the introduction of kinescopes (picture on the right), which recorded television to film, the first time-shifting technology for television (think TiVo). A handful of television stations served major cities a few hours each week.

Commercialized technologies embed values in their designs.

In 2007, millions of television studios will be sold each month, most of them fitting in your pocket. You can shoot and store videos in your mobile phone, distribute them to a billion people. For lunch money.

When you whip out your phone to vid a party, you didn't have to study electronics, optics, signal analysis, camera sensor tuning, video composition, studio lighting, makeup for television, studio mixing, audio engineering, or dozens of other specialties that were first the province of lab rats, then union artists.

Nokia and other phone makers build these skills into phone chips and software. Click to turn on the video camera. Click to shooting. Point. Click to stop and preview. Click to upload. Done. Years of education and experience, careful rites of passage into clubs of skilled craftsmen, reduced to fewer than a dozen button clicks.

Keen whines that the unwashed masses who write, take photos, and shoot video (in other words: think, observe, opine, and share) are destroying the rarified institutions associated with artificial scarcity of the press, literature, the cinema, and academe. That you cannot find the good stuff for all the amateur swill. That all the wisdom of centuries, carefully filtered, tested and cultivated, fails to propagate along with the "democratizing" technologies now available to the poor, illiterate, and stupid.

Duh.

Of course.

And that's OK.

We'll get over it.

We live in a dynamic system. Feedback loops and all. So not only will the old institutions live on - albeit differently - but more people will discover that knowledge, those values, and embrace them. Thousands of people read or saw Shakespeare 400 years' ago vs. hundreds of millions today.   

The very mechanisms you decry are the ones that will preserve and reinvigorate those cultural and economic elements you prize, Andrew.

Have faith.

Notes:

  1. The 400th anniversary of Shakespeare's death is in April 2016.
  2. The Klingon Hamlet.
  3. The Keen Reader.
  4. TVhistory.tv

June 23, 2007

Headset Free Skype - Optional When You Want It.

Have it Your way: at home, in the office or mobile

So Jajah wants us to abandon our headsets and make headset-free phone calls. But I can come up with several ways to make headset free phone calls with Skype or alternative mobile handset-based services:

  • With the Skype 3.2 client, Skype's new voice engine does a very good job of echo cancellation; I often run Skype on my laptop using my Logitech webcam's mic and my laptop seakers along with the Skype softphone client. Sound quality's much better than some of the echo boxes I occasionally have to listen to at the other end! No headset required.
  • I can make a call using my evaluation Phillips 841 Dual Cordless phone (where "Dual" means Skype/SkypeOut or PSTN) with the option to (i) use the standard embedded speaker and hold it to my ear, (ii) put it on the speakerphone and listen anywhere in the room.or (iii) add a standard cordless phone earpiece or headset. Woops, the last option gets back into headsets -- sorry for the slip-up. Because it uses DECT cordless technology, I can actually take the call anywhere in the house. And for this type of call, I don't need to even start near my laptop -- only its base station needs to be near a cable/DSL router or connected Ethernet switch. Bottom line: Headset optional, calls taken anywhere in the house.
  • I also have an option to make VoIP calls on Truphone from any of the Nokia N80i or N95 equipped with WiFi. Again there are three options for listening: embedded handset speaker, loudspeaker or Bluetooth earipiece (which gets close to a headset). Just as with calling over the GSM network, simply look up a number, select it, tell it you want to go over the Internet (as opposed to the GSM voice service) and you have established a call. Look Ma! No Callback! Headset optional but WiFi required -- calls taken anywhere within 100m. of an authenticated WiFi access point.

And over the past couple of weeks I have discovered ways to make Skype calls away from any WiFi or wired Ethernet connection:

  • Mobivox allows one to use any wireless phone to make Skype calls with the proviso you call a local PoP number (as we used to do with dial-up Internet). Its servers then complete the call for you (as a Skype or SkypeOut call). You do have to pre-register Contact names (but it does import Skype Contact info readily), dictate names and type of termination (Skype or SkypeOut) but it works pretty effectively. In this case, no download required. And those mobile phones will have headset options but also at least a speaker phone option.
  • IM+ Skype for Software allows me to call anyone on Skype or in my Blackberry address book at no/low cost from my Blackberry where I have the Bluetooth headset, speakerphone or embedded speaker/mic options. As a bonus I can text message and detect presence with this Skype client on the Blackbery. Work that into your Jajah phone call. One time download required but largely to manage the IM feature.
  • And I am learning about Talk Plus which can provide a low cost underlying voice connection infrastructure in place to complement simply the IM component of Skype on a, say, Nokia N95.

So there are plenty of options but here's the clincher: When I moved to Los Angeles with Quarterdeck several years ago one of the first practices I adopted was to use a headset for handling phone calls. Two hands free for working on my PC or doodling; And being cordless I could wander around the office. I want headset options with all my phones.

As an additional point, what is one of the other principle benefits of headsets? Handsfree combined with Privacy, of course! I'm not always ready to let those around me listen to the other half of the conversation (and, showing some respect for those around me, they often don't want to hear it).

And, finally, what happened to the elements of IM - presence and text messaging? Nowhere to be found with Jajah. In some ways, Jajah appears to be the mobile version of a (minute stealing) legacy phone service replacement business. And we know how competitive these services have become along with low margins. Over the past two weeks, having the mobile IM benefits of IM+ for Skype Software has been a real benefit when away from my laptop -- in fact, more of a benefit sometimes than having mobile voice.

Before you decide you want to throw away your headset, make sure you know what other features you are throwing away with the bath water. I want my headset -- as an option!

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June 22, 2007

Skype Summer 2007 Mashup Competition

Innovation Alert: Challenging All MashUp Junkies!

Click to access Programmable Web Dashboard updateOver the past couple of years the developer world has been challenged to innovate in a way that brings a higher degree of interactivity and more potential for web services such that we can envision being able to interconnect applications and data to serve a customized purpose whether for a large business audience or to satisfy an individual's desire to experiment. Mashups are appearing as buttons and hyperlinks on websites and blogs, linking applications and data across a wide range of vertical market sectors. In fact the Programmable Web's Mashup DashBoard is tracking mashups in real time and provides a daily view of the vertical markets served. (If you click on the diagram above to go to the Dashboard, you can click on each sector to find the mashups for the respective market sector.)

As preannounced at Skype DevCon last week, today marks the launch of Skype's Summer 2007 Mashup competition.. An example pointed out at the time was the then new Twitter4Skype mashup that brought your Twitter activity into into a Skype chat window. From the Mashup Competition wiki:

Ok, ok. So you're thinking "aren't mashups just another Web 2.0 bandwagon?"

Well hold your cynicism for a moment! We (in Skype Developer Program) think the time is right for a focused effort on Mashups. With professional mashup creator IDE's, hundreds of API programs and thousands of mashups available, the time has never been better for mashups to make life better for users. If you're in doubt about the number of opportunities for 'creative plumbing' check out: the Programmable Web Mashup website.

Skype hires smart people, but we don't profess to own every smart idea in the world. That is where you come in....

The ground rules include:

  • Competition is open now and runs to August 31, 2007
  • Mashup must include use of at least one Skype API call.
  • {secret hint heard at Skype DevCon} Entering an eBay - Skype or a PayPal - Skype mashup may unduly influence the judges
  • Third party reviews of MashUp contest entries are embargoed until 9:00 a.m. GMT Sept. 14, 2007

Both Phil and I are amongst the judges with the winners announced at Skype's Prague developer event September 12, 2007. The winner will be invited to attend in Prague with transportation reimbursed by Skype.The winner will also receive other promotional exposure while the ten runners-up will also receive marketing and promotional assistance from Skype after Sept. 13.

While I can't speak for Phil and the primary judging criteria are posted on the wiki, I will be looking for usability and value-add from either a consumer or business perspective, ease of implementation and operation, stability and "Is it a Purple Cow" within the Skype ecosystem? And I will add one more criteria: Is it a potential Voice 2.0 application?

Related links:

Looking forward to some innovative activity (especially with eBay, PayPal, Facebook, Google Maps, MySpace).

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Wildassspeculation: Yahoo!/eBay merger

Tim Poulus started this round of speculation that Yahoo!'s reorganization and Semel's departure leave the door for an eBay/Yahoo! merger not just open but likely.

It would be pretty amazing, actually, to see the two together. Very different office and leadership chemistries. Merging Skype/Y!Messenger would pool some amazing talents and extraordinarily large user communities. And who wouldn't want click-to-call integration all over the Yahoo! properties? Janet Driscoll Miller thinks bringing PayPal to Yahoo! and Yahoo! advertising to eBay sellers would be big business.

But I don't think it's going to happen. What would a merger produce that partnering agreements wouldn't?

Watch Mojo thinks it would be hard for Yahoo! shareholders to take the lower P/E and P/S multiples that come with eBay's transactional vs. advertising business. But Krish thinks this might be the best merger on Yahoo!'s horizon.

So how about it? eBaYahoo! anyone?

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Jajah positions itself as download-free Skype

"No Headset, No Download, No Installation"

Their tagline might as well read "No Budget, No Breakthroughs, No Fear."  Jajah is targeting Skype's users with their new NoHeadset.com site. The headset is a symbol of connecting through your computer, of being chained to your desk. Join their "movement" by videotaping yourself creatively destroying your headset and sharing the video. Some of the entries are giggleworthy.

Jajah is branding itself against Skype with this new campaign.

  • Jajah: lightweight. Skype: heavy.
  • Jajah: for mobile phone users. Skype: for desktop users.
  • Jajah: energetic, for the YouTube generation. Skype: not.

Jajah's messaging is a great frame for Jajah. It'll be interesting to see if Skype ignores it or counters with a frame that subverts Jajah.

The silver lining for Skype? At least they're big enough to draw this kind of attention.

June 21, 2007

Mr. Joost: Commerce imitates Life

Meet Joost van der Vleuten, a senior policy advisor at the Netherlands' Ministry of Economic Affairs.

No relation to the company or the singer, but Joost's mailbox was full with congratulations from friends when "his" startup launched. His mother is so proud!

June 20, 2007

Measures of Market Penetration

Skyping Baby Names

Skype and The Enterprise

A Guest Post by Joe Thornley, Partner with Ottawa/Toronto-based Thornley-Fallis, whose ProPR blog explores social media and public relations. Joe is also coordinator of the monthly Third Monday/Tuesday events in Ottawa and Toronto where he brings together an audience interested in discussing social media from a PR perspective. Republished, with permission, from ProPR

The final morning session at Enterprise 2.0 that I attended focused on Skype and the issues its adoption raises within the Enterprise. Irwin Lazar moderated a panel of Rebecca Cavagnari, VP of Convenos, Lou Guercia, President of WebDialogs and Michael Jackson from Skype.

  • Skype has become the most popular communications application, with 9.2 million users logged in at any time and hundreds of millions of downloads.
  • The virtual workplace is here. Nemertes Research reports that 83% of enterprises reported in 2006 that they have incorporated virtual workplaces.
  • Skype is the first unified messaging application. And it has taken off with individuals and small businesses.
  • Individual employees have introduced Skype into the enterprise. Skype has developed a Skype for Business product geared to the Enterprise environment. However, adoption by the enterprise has lagged behind individual user adoption.
  • Nemertes researched the views of enterprises about Skype. Almost half (46%) of their respondents have a policy to block it. (Note that the policy is not universally applied.) About one in ten - mostly nonprofit organizations - actively use it. Overall, there is not a great deal of acceptance by the highest levels in the enterprise, but there is broad usage by individuals.
  • Corporate concerns include control of usage and security.
  • Lou Guercia feels that the only element missing from Skype as a unified communications platform is data sharing. His company, WebDialogs, offers a Skype web conferencing plug in under the Unyte brand name.
  • Skype’s Michael Jackson says that one third of Skype’s users claim that they use it in the workplace.
  • Rebecca Cavagnari indicated that Convenos also provides a Skype web conferencing plug in.

How do they address the challenge of acceptance by enterprises?

  • Michael Jackson indicated that Skype is paying attention to the concerns and issues raised by the enterprise market. As they refine the product, they are making changes to take these into account.
  • Rebecca Cavagnari indicated that Convenos users include a large representation of people who are based outside of the United States. And they use Skype to establish presence and communicate prior to the beginning of the web conference.
  • Lou Guercia indicated that the conferences that are routed through WebDialog’s Skype plugin tend to be smaller than through its other products.
  • Skype’s Michael Jackson points out that Skype is never positioned as a replacement for phone service. Instead, they point to the greater capabilities, including video, that Skype enables. Skype uses its own internal uasge of Skype as a testbed.
  • Lou Guercia feels that the biggest challenge for a consumer-based company like Skype faces is scale. As a B-to-C company, Skype does not have the support system that B-to-B customers demand. He expects that this will encourage Skype to continue to focus on individual users while peacefully co-existing with the enterprise.
  • Cavagnari agrees that companies that partner with Skype should not expect Skype to change its focus to the Enterprise. Consequently, the partners must rely on their own efforts to ensure that their products that use Skype meet the needs of business users.

Bottom line for Guercia, Skype partners, not Skype, will have to meet the needs of business partners.

Skype’s Michael Jackson tackled the question of interoperability. He suggested that this has not been an issue for Skype’s end users, but more of an issue for analysts.

Skype has ventured into social applications with its Skypecast initiative. This is still very much in its formative stages. The company will wait for the community to develop applications rather than, with its limited size, try to itself push into the edge applications.

Why did Convenos and WebDialog integrate Skype into their products?

  • Cavagnari indicated that Skype presented a superior substitute for the Codec that was in their product.
  • Guercia indicated that they incorporated Skype for branding purposes. Skype gave them a brand awareness that they could not otherwise have achieved. Since December, they have done business in 47 countries - with no sales force and just an eCommerce site.

An interesting session for me. However, there seemed to be a lack of audience engagement. In fact, I had the impression that this session was trying to answer a question that nobody had asked.

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Competing against Skype 104: Value Chain Denial

Do you think Skype is a threat to incumbent telcos?

This is the second in a series outlining tactics telcos have at their disposal to answer the question "If you think Skype is a threat to your telecom profits, how can you compete?"

101: Pricing
102: Lobbying
103: Patent War

Tie-Up Key Suppliers.
A business ecosystem attack.

Banana Split: The Value Chain in the conventional banana market

Skype needs partners to make its back-end business work. A large competitor might threaten to remove their business (or threaten to enter the market directly) if a Skype supplier continues to do business with Skype or offer Skype favorable/reasonable terms.

For example, Skype's SkypeIn and SkypeOut rely on call termination service providers to touch the public telephone network. Skype also relies on router manufacturers. Some of their suppliers: Colt Telecom, Level3, iBasis, Teleglobe, Cable and Wireless, B3G Telecom, TDC Song, Mblox, mobile365.

This is a subtle attack. Stifling Skype's value chain will only show up when negotiations with partners go badly for no apparent reason. Terms become unreasonable, higher quality of service no longer available, phone calls not returned. This attack relies on Skype not being sufficiently diversified in each market and in some markets dominated by large players.

A successful attack could hurt Skype's product quality, increase operations costs, and slow Skype's build-out to meet growth.

Competing against Skype 103: Patent War

Do you think Skype is a threat to incumbent telcos?

This is the third in a series outlining tactics telcos have at their disposal to answer the question "If you think Skype is a threat to your telecom profits, how can you compete?"

101: Pricing
102: Lobbying

Lock up Intellectual Property.
A legal attack.

The Brain Eaters movie poster - thumbnailThrow big money at IP lawyers in major countries with strong patent enforcement, point them at Skype, see what happens.

Worst case, you force Skype to steal money from R&D and marketing budgets to pay for legal defense.

Best cases: disrupt operations, extract cash compensation, force market abandonment. 

As attacks go, this is high opportunity, small cost, small chance. It's fair to assume Skype's early investors and eBay performed IP due diligence. You never know, though; look at Verizon's attack on Vonage and several attacks on RIM, long after they were vetted.

An indirect version of this attack targets Skype's suppliers and partners, especially Joltid and Global IP Sound. Joltid provides the P2P parts of Skype's network; StreamCast Networks sued eBay based on connections to Grokster via Joltid. GIPS supplied audio software for Skype clients until recent releases.  

You can also attack Skype using a proxy. IDT subsidiary Net2Phone sued Skype in June 2006; it's still open. IDT's biggest suppliers are incumbent telcos.

 

June 19, 2007

Competing against Skype 102: Lobbying

Do you think Skype is a threat to incumbent telcos?

This is the second in a series outlining tactics telcos have at their disposal to answer the question "If you think Skype is a threat to your telecom profits, how can you compete?"

101: Pricing

Regulate Obstacles.
A political power attack.

BigCos have beefy political muscles. Small ones don't. If you're big you think of this as a benefit of size and experience. Small fry see this as an overwhelming, unfair advantage. 

Political muscle comes from big taxes and patronage. Local and long distance phone companies use their influence on regulators, like America's Federal Communications Commission and state and provincial agencies. They've also lobbied law makers for more nearly 150 years, going back to the telegraph. Samuel Morse worked with Maine Congressman F.O.J. Smith to lobby the U.S. congress for federal funding for his electric telegraph, back in the early 1840s. Did I mention they've mastered this by now?

Telcos use government to create new opportunities and to defend their turf from effective competition.

Some telcos convinced governments to outlaw Skype or legislate expensive technical barriers to operation. In the United States, incumbent telcos lobbied for emergency service (e911) to increase operational costs and complexity. The hope was to slow the entrance of Skype, Vonage and other VoIP providers and to raise cost and complexity for smaller, nimbler companies.

National carriers blocked or banned Skype in several countries (China, UAE, Mexico, Belize, Jordan, India), although this trend seems to be changing. In some cases, political power pushes regulatory agency attention away from an incumbent's aggressive tactics.

Three fronts affect Skype's future:

Net Neutrality for a Fair Playing Field.

Should your Internet carrier be able to charge you for VoIP minutes, above and beyond what you pay Skype? Or make your Skype calls slower than calls made with their own softphone products?

You don't want folks messing with your bits. Net neutrality is a policy: carriers should just carry traffic. No discrimination based on the content of that traffic. Neutrality advocates say government has a role in keeping the Internet fair, neutral, and open to all. 

eBay's government relations staff supports net neutrality as do nearly all web businesses.

Open Wireless (Wi-Fi, Wi-Max) Networks for Hybrid and Wi-Fi Skype Phones.

Net neutrality for wireless broadband. Google is lobbying congress for 'open' wireless networks. Susan Crawford's been following the Senate's hearings on the 700MHz auction. If your phone or laptop uses Wi-Fi, without this, Wi-Fi access providers can choose to block or cripple Skype.

Mobile Carterfone for Unlocked Access to the Mobile Phone Network.

As long as you're paying for mobile service, shouldn't you be able to use any gadget you like? Skype picked this fight with a brilliant petition to the US FCC earlier this year. Attach any device to the mobile network instead of only getting locked phones from carriers. The incumbents are lobbying hard against this.

Political power is real, complex, and not for the faint-of-heart. Political power can buy incumbents time to fight, to adapt and to change the battleground from disruption to status quo.

Who's In Charge Here? Carrier Battles for Revenue Sustenance

The recognition that the right to offer a telephony service is a public trust is underlined by the existence of government agencies worldwide (such as FCC, OFCOM and CRTC) granting businesses the right to offer phone services. Included is a responsibility to provide access to any telephone number regardless of the underlying technology for that "last mile access". In turn, this means there is an inherent assumption that we can call any phone number from any service.

Truphone is a service that relies on WiFi connectivity for that last mile to WiFi-enabled handsets; each subscriber also obtains a phone number for what effectively amounts to a SkypeIn-type of service. For instance, the Nokia N95 and N80 provide wireless access via both the GSM and WiFi protocols. When I can get a WiFi connection, I have found Truphone to provide a high quality, easy-to-use service. At ceBit 2007 I was told to expect a new, more user-friendly version of Truphone by the summer; sounds like it is going into beta now.

There have been recent reports where Orange and Vodafone in the U.K. were crippling the WiFi feature prior to selling these handsets but they still would allow their customers to call a Truphone number from the underlying GSM wireless service even if the Truphone client could not work for outbound calls. According to reports late last week, T-Mobile in the UK has gone one step further and blocked all calls to Truphone numbers (07978 8xxxxx) in the UK. (North American users of Truphone end up with a number in the 360 Area Code.) This has generated a wealth of posts:

GigaOm: Mobile carriers are scared of one thing: becoming dumb pipes whose only utility is to carry voice and text. And it is one of the reasons why they are fighting tooth and nail with the mobile VoIP providers, using all sorts of tactics to make mobile VoIP a non-starter.

VoIP Watch (Andy): No, this means to me that we are seeing one more example of where the old guard is seeking to protect their turf and aiming to use every dirty trick in the book to keep their head counts and make their numbers. That is make their numbers work only to their own benefit.

SaundersLog: My prediction? As painful as this is for Truphone, they will ultimately prevail. Logically applications and pipes are separate, and open markets demand interoperability.

Smith on VoIP: Like it or not, mobile Internet access is still treated and viewed differently than regular Internet access. As I have stated before, the future of mobile VoIP lies in the hands of the cellular carriers. The cellular network is still considered “their network”. If they would like to ban the use of certain applications (remember VoIP is just another IP application?) on their network, then they are going to do it…and get away with it.One can not expect any business to let a competitor leverage their infrastructure in order to “steal” their customers.

Jon Arnold: At this point in time - as good as Truphone's offering is - and it's great - a full house beats a pair of 10s - which is about how this hand looks to me. T-Mobile will win this hand, but if Truphone can stay in the game long enough, things will go their way. Until the mobile carriers feel a lot more pain, the Truphones of the world - and there are a few - will have a tough go.

That's why it's so important for anyone following this space to b