Today Santa Cruz Networks ships the beta release of vSkype, the first multiuser video conferencing extension to Skype for Microsoft Windows.

So begins the Skype Video War. What a cool arms race. There are three groups in the race. The IM people upgrading audio and video (AOL, MSN and Yahoo!), the Skype third party developers, and Skype itself.

Two weeks ago the story was Spontania’s Video4Skype release. Now Santa Cruz Networks realeases vSkype. This means the 40 million Skype users have these features, and Microsoft, AOL, and Yahoo don't. CEO Stuart Jacobson says, "vSkype adds two cool new experiences to a Skype user: multi-user video and desktop sharing."

The screen shot below says more than my words can. It is an international conference I hosted from Kelowna, B.C. to: Opole, Poland, Toronto, Canada, Jackson Hole, Wyoming, USA, Sweden, and Bucharest, Romania.

I have been playing with and testing a pre-beta release of vSkype. It has been a thrilling week. Thank you Santa Cruz Networks ─SCN─ people for the opportunity and for putting up with all my whining and nagging.

Now I get to share with our Skype Journal readers the fascinating story of a development team who in eight weeks went from strategy to product deployment in the market. I’ll cover the product, the company, the cool features I like, test results and interviews with CEO Stuart Jacobson and CTO Barry Spencer.

First: vSkype is Easy to Use

This should look like a familiar process to any Skype user who has added a contact to a Chat.

A Skype chat message with a conference link is sent to all those invited.

Tip: In fact it would be a good idea to create a persistent chat for all the participants.

One click and you add another buddy to video conference as shown in this video conference session: France, USA, Poland, Sweden, and Canada.

Seasoned talent driving vSkype.

"We’re a group of battle-scarred veterans", says Santa Cruz Networks developer, Bernie Vachon, ex-Borland like 3 of his work mates and also an ex-Canadian from my neck of the woods. Interesting contrast to the younger demographics at Skype. CTO Barry Spencer, who has his hands around the core video technology, tells me, "I was employee number 23 in Lotus just ahead of Jim Manzi".

When asked what he brings to the table, Itzik Cohen, VP of Marketing and Business Development explains it to me this way,

"I am a 6 foot 9 former Israeli pro basketball player who was employee # 38 at WebEx. Video is the hardest thing to do on IP. I want to do what Skype did for video- just make it usable. The future is no more blind dates. We have a lot of interesting technology to make video a fun experience… eye candy, backdrops, gaming. We have a great leader in Stuart, who brings incredible wealth of experience and a calming influence, along with strong investor/board members like Tim Draper of Draper Fisher Jurvetson and Robert Troy (Geneva Venture Partners). vSkype is just our first plug-in. We plan to release plug-ins for every major presence network out there. We have a consumer strategy and a strategy for business grade services."

These SCN guys feel like seasoned players!

Cool things I like…

1. It is encrypted end-to-end

2. Collaboration: I can share a PowerPoint or any other window on my desktop or even my whole desktop!

3. When one party talks their name under their pic changes colour

4. I can detach a video pic and resize it. Shown below. This is part of the vSkyper team at SCN. I detached Sam's pic to a separate window. Sam is the SCN in-house anthropologist. I guess they hired Sam for his videogengic eyes and Sam wanted to do a PhD thesis on old people in Silicon Valley! (Grin)

   

5. Best is last. I can do a video call with myself! This is just perfect for anal retentive testers like me. You get to tune your systen and camera without wasting any one's time. To make a test call to yourself just go to Start > All Programs > vSkype as shown here View image. The result is shown here View image

Results from the Skype Journal Testing Lab:

I like to test 4 key performance indicators. In the end you the user will decide what you like best. These tests are so our beta testing group doesn't end up deadlocked like the UN. Opinion doesn't count in this court. Nor do fancy PowerPoints.

1. CPU Utiliization
2. Resolution
3. Fluidity/Frame Rate
4. Bandwidth consumption

vSkype performed remarkably well. CPU utilization was between 5 and 10 percent.

Resolution even in a 5 party video conference call was better than 300 lines per inch View image (that's really good) and it did as well as Video4Skype on the eye chart test with viewers in a conference being able to read 12 point type.

Fluidity was just okay. Fluidity is the ability to move your head or hands without any jerkiness in the video. Finger test counts were behind by one finger (about half a sceond) so lip sync was not as good as I would like to see it.

Bandwidth consumption is difficult for me to rate. SCN use a neat technique called elastic bandwidth (that Barry Spencer is a clever fellow). vSkype uses all the bandwidth you have available which makes for a great video experience, but it makes it really difficult for us beta testers to do comparitive testing! All I can say is if you want a good video experience get a broadband connection with more than 128 kbs upload speed if you can.

Let's hear from SCN CEO Stuart Jacobson

Tell me about your corporate culture. You seem to be an older lot. How does your demographics compare to others in the valley?

Barry and I are a bit older but our average age is late 20 and early 30s. I am happy that you didn’t comment about our maturity vs. age. Although we are twice retired and living in Santa Cruz, we are still having fun!

Do you mean the Silicon Valley or the San Joachim Valley? The valley is multi-ethnic and so are we. We even have a Canadian on our team. We speak 8 languages among us. I have lived in India, China and Marin County. Itzik used to play pro basketball in Europe before a great run at Webex. He has lived in France and Israel. Jean-Marc was born in Paris and speaks with a real Parisian Accent. Alex is from Mexico. Our lead engineer, Jeremy lives here and in Russia. At the moment he is on vacation with his family in Germany – which is why you are seeing so much of Barry! We re as diverse as the valley!

What are the advantages of having a team of old guys vs 13 15 to 20 year olds?

Older guys don’t make as many mistakes. More important, they actually understand how computers work. Video is hard to do and still taxes processors. To make is work on the internet were bandwidth varies, and to make it work in more that just a P2P configuration, you have really understand how to manage resources and optimize instructions. Most programmers today use Java or VB. They don’t worry about overhead and do not have to know, nor can they know, what is really going on. Older guys learned how machines really work and know how to manage and optimize with scarce resources. We like to team experience and wisdom with energy and enthusiasm!

Why did Stuart Join SCN? Who found who? What unique things do you bring to the table? What gaps do you fill?

Communication is good for us all and can be a very profitable business. I joined because I think it is time to use the internet to help people communicate more often and in more ways and because there is a huge opportunity to win big. I was originally introduced to SCN by Joe Costello, our board member. Joe sat on the Saba Board. Recently I was also reacquainted with Robert Troy from Geneva Venture Partners. Geneva and Robert were involved early on with Oracle while I was their and funded old colleagues of mine who built the CRM business (Seibel and Salesforce).

Is an IPO on your radar screen?

No. I have been through 3 IPOs. Even if the market were right, my answer would be the same because it is not the right time to think about an IPO. At this point we are focused on building a great user experience, making real-time communications fun, finding interesting ways to encourage its usage in group settings, and making money.

From a Skype Plug-in perspective who is your end user?

That is a good question! One of the reasons we are releasing our product in beta is to better understand this. The Skype community is vast and wonderfully diverse. We are learning as we go along. Our colleagues over the hill in Silicon Valley are interested in using the plug-in to manage their outsourcing partnerships and clients in India and China. We have also had interest from various religious and special interest groups interested in everything from motorcycles to politics. We have also had interest from tutors and educators, especially those focused on teaching language. They all want to meet on line and in groups.

Are you a video conferencing tool, a collaboration tool or a content producing tool?

As you know, we have a large library of content and camera games that we intend to leverage with vSkype. We know that allowing users to play group camera games will be a hit in the Skype community. Our tools for conferencing are fairly complete and we think they will also be useful to Skype users. Collaboration is a big word and an industry on its own, our collaboration is light but useful.

At heart, we are a technology developer and our strategy is to enable our partners and their customers to utilize our tools to have fun, make money, and improve their customer satisfaction. If we do this well, we will make lots of money.

Did you know Tim Draper personally before you came to SCN?

No.

What is your vision for SCN at the end of 2006?

Our vision: People will come together on the internet and use it to communicate more and in different ways. As the internet becomes unwired, opportunity to communicate and share will grow. We want to be a core enabling technology provider facilitating this.

By the end of 2006 we believe that millions of users on all of the presence networks throughout the world will be using our products to communicate visually, meet in groups, play games online, and show their friends what they are doing right now!

Now let's hear from the CTO Barry Spencer

.

When will you move to a P2P architecture like MSN did and like what Spontania have?

We already have P2P running. It will be an option included in our production release. We decided to start with the hard stuff first (a server solution that supports both one-to-one and large groups) and offer users a broader range of services – many of which can only be delivered using a server architecture. Once we determine how it is being used, we will optimize our P2P solution.

What are the advantages of P2P?

Performance may be faster with computers that are geographically close in a P2P environment. There also is no bandwidth cost, but this cost is dropping radically. The advantages of a server based solution are many and include groups, security, scalability, reliability, and better support and management in corporate environments (e.g. bandwidth control, firewalls, NATs, etc), There are also additional features that can be offered like centralized archiving, video mail, and games.

What is unique about your technology? Why did you build your own codec? There are some really good ones on the Market like the VP6 TrueMotion.

Our technology was designed to support groups and other add-on services such as sharing. Our technology has built-in QOS for the Internet; it constantly adapts to fluctuating bandwidth and prioritizes multiplexed data accordingly. It also provides centralized bandwidth control for shared connections. Our multipoint architecture allows us to cheaply scale to support large groups of up to 200 per call. Designed specifically for the Internet, our solution securely goes through firewalls, NATs and proxies.

The Challenge

How will 3rd party video plug-ins compete with Skype video? Will the war end before Skype announces their free video? Who knows? who cares?

For us Skypers the vSkype beta is on their web site. Go play. Get thrilled, as I did, by a new Skype experience.

---

Many thanks to my Skype buddies Ben, Peter, Kevin D, Kevin L, Sanks, Carlo,... … the greatest beta testers in Skypeland whom I get to work with. Lucky me. - Bill Campbell. Skype me