Dryburgh: What's after Skype? Intent.

eBay is preparing to spin-out Skype, setting it free to steer its own course. Almost six years ago Skype redefined realtime communications and changed the industry. Lee Dryburgh, the man behind the Emerging Communications Conference, shared some thoughts with me about his vision for what comes next. – Phil Wolff

I spent many years thinking about telephony, seven days a week, in a way it “destroyed” my life in a mental health sense during those years trying to ascertain where it was going between 2005-2020. It was clear to me that what had existed for over a century and which today generates revenues that dwarf the Internet, was going to be surpassed and that we had already put one foot on the cliff edge. It’s the big reason I kicked off the Emerging Communications Conference & Awards, because no other event seemed to have enough inherent vision.

Where is it going?

First you’ve got the telephony application itself. Because of the exceptional widespread deployment of the telephone, it’s century long cultural embedment, extreme ease of use and very low barriers to usage, it’s not going away in a big way, at any time least soon. It’s far too big and you’ve got far too much inertia in and around it.

Relationships replaces Voice as the substrate in clients. 

However because its substantial list of deficiencies grows, what we are seeing emerging and what will gain ever further traction is software based voice-enabled, communication technologies. Interestingly voice may not be the “substrate” of these clients, “relationships” will be, both between people and things.

Second, we’ve got the economic model behind it. Even today, well over a hundred years since it’s original inception, we still have the same usage paradigms and economic models put in place at the time of the first electro-mechanical switches.

Now the keyword in all of this is “software.” Six years ago, the Skype software client was released. It was the harbinger of change to come. It called into question the need for very expensive dedicated underlying transport networks by pushing edge intelligence into the Codec layer to deal with less than ideal networks. It called into question the need for dedicated telecom hardware in the core network, by using the edge-clients to perform the work in a decentralised fashion. It called into question the inherent limited geographical structuring of telecom operators themselves; software does not face such physical and regulatory boundaries; distribution is relatively zero-cost; and worse still for the operator model, by it’s global footprint, it achieves unprecedented scale.

Looking forwards, we can consider Skype phase one.

Phase two is emerging on the horizon and it will have deeper impact yet. In fact, played out it will change social governance, market economics, how humans relate to each other and even the nature of geo-politics. It’s likely to have ramifications on all social order. In the long-term view, it will also be the “new” multi-trillion dollar market replacing much of what today is the multi-trillion-telephony market.

Phase two is built around an economic model that puts human time and attention at a premium as opposed to dedicated circuits, specialist hardware and personnel. It’s the opposite of what we experience today with telephony, where human time and attention is wasted; ringing, call queues, voice mail boxes, IVR trees, repetitious verbal transfer of static information such as credit card numbers, call transfers and such like.

And that’s just a quick C2B example. C2C has similar lunacy, for example needing to place a telephone call to request a single piece of discrete information or the other person’s location. The economic crisis experienced worldwide is likely to highlight such sources of great inefficiency.

Here is another angle to get you thinking, more and more calls originate from a number noted on a Website and yet when the call is placed, no information is passed with the call about what the context of the call. It’s lost, so each end has to orally work more at the beginning that would otherwise be necessary. Billions of minutes are needlessly wasted on a every day globally.

Phase two is about intention-based economics. It’s focused on fulfilling intentions and desires. Another way of putting it is we no longer need to care about network availability (i.e. “dial tone”), and reaching an endpoint (i.e. A telephone). Network availability and endpoint reachability is assumed. What we care about with intention based economics is human psychology and behaviour, both individual and in aggregate. I’m not saying we need to become psychologists and anthropologists. But what we need to build for is access to ever more personal information, i.e. about the human behind the endpoint. Privacy does not exist looking long-term. Ever more personal information is the new currency, which underlies intention-based economics, and people will increasingly trade it for free access to services.

If any of this seems abstract at the moment, think about what makes Google money, Ad Words. Google provides search free to the consumer in order to gain eyeballs (mass attention) and takes the search parameter to try and deduce intention. It then sells that attention and intention data upstream to advertisers. Google even has machines reading your emails in order to deduce your possible intentions and desires, which is why you may often find an eerily relevant ad above your Gmail account inbox. The underlying reason for the Android initiative surely has to be to gain access to better intention deriving data in order to sell upstream to advertisers.

Yet telecom networks receive vastly more human attention coming in from the edges and transit much more “intention data” than Google, in the form of telecom signaling. But it’s latent, not acted upon and thrown away. They actually throw away their most precious asset and plan to continue charging for their long-term least worthy asset (voice transmission).

To make the situation even worse, telecoms today is still charging downstream to the consumer, ignores money and wishes of upstream parties (like retailers, media companies for example). Because the telecom business model and regulation is pretty much hard nailed like the network itself, the bulk of telecom operators are not likely to be able to transition in time before other entrants move in who appreciate the new economics and who don’t have ball and chain legacy. New entrants and probably a third of telecom operators will transition successfully around phase two.

You’re probably wondering what phase two looks like from the point of view of applications? This is where things get very abstract and potentially the prose could get long-winded. But this is not to be unexpected since the foundation is in the abstract with the word “intention.” To try and get a flavour of the phase two application direction, imagine for a start that the demarcation lines between content, information access, entertainment, ecommerce unravel ever further and the result is intrinsically tied to an ever smarter fusion of more communication modalities. Now underpin that with attention and intention based economics.

Now dream a little.

tags: skype, strategy, intent, intention, intentioneconomy, presence, richpresence, privacy

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Why a Skype platform can lead to happiness

Here's a 2004 TED talk by Malcolm Gladwell about the importance of variability in product design.

He concludes with four points.

There's a disconnect between what people say they want when you ask them (in focus groups, for example) and what they really want and do. We all say we like dark, rich, roasted coffee but many of us like weak, creamy coffee.

Horizontal segmentation can reveal that there are many variations of a product, each with their own appeal to the many variations among people. I like chunky tomato sauce, you like spicy. Until you reveal and test the clusters across a zillion dimensions, you'll never know how you should extend your product family.

While chefs have an idea that there is one right way to make a particular dish, they are wrong. The Platonic Ideal of a product misses that everyone in that restaurant has a different experience, different tastes, and that the chef's perfection of poached halibut will only produce an "average" happiness.

By searching for human variability and embracing human diversity, we'll find a truer path to true happiness.

On to Skype.

Talk is a fundamental human activity and it's tough to create access to the Skype network from everywhere people talk (or would talk if they could).

So Skype gives us one Skype. It's squeezed into different shapes to adapt to different devices and operating systems, but it's the same Skype.

This is not enough. Skype knows it.

Skype is resource constrained. Everything they have is going into creating access to Skype dialtone. There is no way they can create 20 variations of Skype for Windows to serve different market segments. Let alone the thousands of variations by which people meet, engage, interact, play, learn, discover, fight, love, and experience each other.

So Skype needs a multiplier.

A multiplier that lets thousands of teams of developers fashion a Skype that meets their way of talking and being social.

We call that platforming. Giving a solid foundation, a platform, on which others can build.

Skype has several weak programming platforms now, all of them under review. The review is good.

Because for as big as Skype's market is now, it can be orders of magnitude larger. And Skype doesn't have the time or people or money to make Skypes for all those contexts.

Skype for WoW.

Skype for First Responders.

Skype for Shoppers.

Skype for Stock Brokers.

Skype for Grandparents.

Skype for the Hypersocial.

Skype for Twitterers.

Skype for Getting Things Done.

Skype for Lovers.

Skype for Musicians. (I met a company that has this as a business plan)

Skype for Projects.

Skype for Poken.

Skype for Sales.

Skype for Lawyers.

Skype for eBay Power Sellers.

Skype for Product Managers.

Skype for Hello Kitty.

Skype for IMDB and other movie lovers.

Skype for Manchester United.

And a thousand more.

Each with their own social and communication patterns, their own feature priorities, different measures of success, integration with different other systems, and support requirements.

What would they have in common? An underlying brand ("Skype inside"), one login, backup, in-network connection to other Skype users, encryption, contact lists, history.

And an ecosystem eager to pour a liquid Skype into the forms that make each community, each niche, each segment, each person very very happy. 

tags: skype, platforming, design, technology, malcolmgladwell, spaghetti, tedtalks, happiness

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Download Gladwell's talk

• Audio to desktop (MP3)
• Audio to iTunes (MP3)
• Video to desktop (Zipped MP4)
• Video to iTunes (MP4)
• Watch this talk as high-res video (MP4)

Can digital pipes handle swine flu epidemic spikes?

Pandemics change human behavior for millions of people. Our networks may not be ready for those changes.

Just stay home. Wash your hands. Advice from the US CDC for people at risk of the 2009 swine flu. Mexican authorities urge avoiding face-to-face contact in many-to-many places like hospitals, museums, theaters, cinemas (releases of X-Men Origins and Star Trek are postponed), churches, sports events, public markets.

 Working at Home. While television (or streaming video) might substitute in sports and music events, bringing other work home is harder.

• Can mobile phones and the Internet create alternatives for information, education, service, and entertainment workers?
• Can employers keep workers home?
• Can employers quickly offer full digital command, communications, collaboration, coordination, and control services to sites scattered throughout a city?

Online communities swarm in response to emergencies and threats. 9-11, Tsunami relief, Katrina, Mumbai invasion, Southern California wildfires had four stages.

1. Spreading alarms ("hey did you see?") through many online media to trigger swarming. today, this includes tags and #hashtags, improving discoverability and transmissibility of the event and the event's memes. People want to know more. As people flock to the news, they create an overwhelming amount of repetition and echo and noise. So people start... 
2. Organizing to improve/concentrate/filter information. People want to make sense of the spew. At the start people create new topical blogs, email lists, facebook forums, YouTube channels. Volunteers transcribe television and radio reports, retweet headlines and commentary, timelines of government responses. In short filtering, digestion, and meaning step in. Then people want to help other people (and themselves). So you see
3. Online serves offline. Volunteers build specific services connecting online news/community to local people/places/activities. For Tsunami relief I participated in an instant call center via Skype community volunteers. Other services put together online databases of victims, or geomashups of hotspots, or fundraising projects, or medical information.
4. Aftermath. People are helped, most of the online world goes back to their lives, and some of the legacy systems persist to serve those still concerned or affected by the event.

By contrast, people shun common places and take refuge in their homes in a biological outbreak/epidemic/pandemic.

This creates new problems.

• Stage Leapfrogging. Surprise! Step 1 (alarming, swarming) will take place in hours. You'll move immediately to Step 2, managing information overload. You could wake up having missed your chance to shape your community's and business's response. Or first access to preventive measures. 
• Social Infrastructure Demand Scales. While millions are affected by most major disasters, pandemics could affect hundreds of millions, especially those in big cities where people congregate. Is twitter ready for 100 million new users? Facebook? CDC.gov? Amazon and Google cloud computing?
• Infrastructure Demand Shifts Home. Capacity is in the wrong place. Are the nation's ISPs ready to move data to residential pipes at workplace speeds, without residential caps, all day, every day? How fast can mobile carriers supplement residential coverage? Who would fund this buildout? Can we beef up the last mile faster than an epidemic spreads? Can we allocate resources based on where an epidemic hits first and worst, instead of using pure market forces?
• Cannot Filter Meaningful Signal from Abundant Noise. Today's tools don't help people consistently and reliably pick the vital, life changing information from the ordinary. So you'll miss product recalls, medical updates, neighborhood alerts in the lossy spew of mailing lists, social updates, and newsfeeds. Would you trust your family's life to a #hashtag ?
• Local Focus Without Local Filters. Many of our systems depend on hundreds or thousands of people looking intently at one topic. What happens when we have must hyperlocalize news and community? The ratio of participants-per-topic falls fast as people focus on their own lives, their own work, their own neighborhoods. Does your block have enough people updating the network so the social network benefits kick in? We clearly don't have tough, accurate filters/readers to help us focus by:
  • Geography (streets, blocks, buildings, neighborhoods),
  • Topic (all those people who might have congregated at baseball games, pubs, museums, city hall), and
  • Occupation (by employer, workplace, team, process, project, agency)
  • Clinic (chains of information, care, supplies, volunteers, alerting)
• Service Gaps. The digital divide has dramatic health effects on the poor, homeless, and underclasses. Tens of millions of the vulnerable are without mobile phones, email, or any frequent internet access. How do you connect offline people to online services?

What can we do to prepare?

See also:

• Ushahidi: Emergency Information Patterns and Thoughts on Swine Flu
• US: PanedemicFlu.gov, CDC.gov/swineflu
• UK: Health Protection Agency
• NYTimes: Swine Flu Cases Map
• HufPo: Swine-Flu News Channel
• iPhone: Swine Flu Tracker
• Google: Flu Trends
• Flu Fashion N95 masks

photos credit cc:by Randal Sheppard 

tags: skype, H1N1, google, wireless, mobile, isp, breakout, epidemic, pandemic, disaster, disasterplanning, infrastructure, disasterpreparedness, scenarios, flu, influenza, swineflu, cdc, who, hyperlocal

Call me at +1-510-455-4384, Skype me, follow @skypejournal and @Phil Wolff.
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NGN IMS Forum continues making dump pipes smarter with billing interop

The Internet was designed to be dumb pipes with smarts at the edge. The telecommunications industry hates that. So the industry has been building smarts into the network with services like IMS (IP Multimedia Subsystem) since 1999. IMS is the phone industry's middleware between the transport layer (where data moves) and the application layer (where services like voicemail run on phone company servers). 

The Next Generation Network (NGN) and IMS Forum announced last Tuesday a new standards effort to inject IMS with business (billing, charging, policy control) and operations (provisioning, security, and reliability) services.  "The train has left the station; now we're jumping on the moving train" said the Forum's Michael Khalilian. The first deliverables are new functional requirements and architectural documents due later this year.

The telecom industry brought together Internet Protocol (IP) voice and data systems from regional phone companies, long distance carriers, mobile operators, cable companies, ISPs,  and others. Now that IP at the low end works, all the high end stuff is now a problem for interoperability, partnership and M&A.

Pulling together all this app functionality onto servers that live in phone company data centers will let carriers sell smartphone apps (think Apple + Skype + AT&T) and reconcile costs and revenue (walled garden 2.0). These IMS services will also replace the "best effort" approach of the Internet with the "quality of service" for streaming audio and video.

This project will be closed, limited to members of NGN IMS Forum, but you can email admin@imsforum.org for access to the listserv. 

So, my take:

1. Control. Telcos want to own the whole value chain. IMS is the walled garden's map. These extensions to IMS pull control over customer experiences, business models, and functionality from developers to carriers, from the application layer to the control layer.
2. Monetization. These particular standards will be used to meter every last bit customers use. After deployment, you won't be able to use "unlimited broadband" and "flat rate" in the same sentence.
3. Privacy. While intended for inter-service interop, there's a surveillance society element to this. Social consequences are not on the agenda.

Meanwhile, folks like Skype are building "over the top" services running on the edge, independent of pipes made smarter by NGN or IMS.

 

News release:

IMS Forum^® Launches BSS/OSS & Security Technical Working Group

To Establish Architectural Requirements for NGN BSS/OSS and Security

in Real-time Service Environments

Las Vegas, NV– April 14, 2009 -- The NGN and IMS Forum^®, the only industry associations dedicated to interoperability and certification of IP Multimedia Subsystem (IMS) and Next Generation Network (NGN) applications and services, announced today at the Billing & OSS World Conference & Expo the creation of its BSS/OSS & Security Technical Working Group.

The working group will help guide industry momentum for an integrated BSS/OSS framework to enable cost-effective transition to IMS/NGN environments. NGN IMS Forum members have demonstrated billing interoperability in the past six Plugfests™ and through commercial deployments. This new working group will focus on the billing and charging, policy control and security functions required by service providers to capture the value promised by NGN networks. HP will chair the working group with support from vice-chairs, Comverse and Mu Dynamics. Other industry leaders such as, Acision, Aricent and Tekelec are also founding members.

“We have learned through the course of our last 6 Plugfests that billing OSS and security play an integral role in the successful implementation of integrated communications services utilizing NGN and IMS,” said Michael Khalilian, Chairman and President NGN and IMS Forum. “We look forward to including the input from this Technical and Business Working Group in our Plugfest 7 interoperability test event and in future Plugfests.”

“Service providers can re-use existing resources, lower costs, and increase revenue opportunities through an integrated BSS/OSS," said Nigel Upton, Director, Communications and Media, Solutions, HP. "With interoperability already demonstrated, our working group will strengthen the business and technical foundation that service providers need for a smooth transition to IMS and next-generation services.”

The Working Group will develop guidelines on the business and technical aspects of BSS/OSS and security in IMS and NGN services and will define the architecture and requirements for network interoperability and reliable real-time IP service application deployment. It will focus on the operational and management of converged IMS/NGN applications and services delivered over wireless (3G, LTE), wireline (DSL, optical) and cable broadband. The group will ensure that converged applications and services will have timely and complete support from provisioning, billing and management systems. A whitepaper describing BSS/OSS considerations of NGN will be the group’s first deliverable and is planned by mid-year. 

“This working group underscores the importance of ‘smart monetization’ approaches in creating successful business models to leverage the full potential of Next-Generation Networks,” said Gabriel Matsliach, General Manager, Billing & Active Customer Management at Comverse, who will serve as the Group’s vice chair. “The group will draw on our experience in supporting any combination of network, service and payment types, including true quad-play offers.”

“As a two-year veteran of the IMS/NGN Forum and their Plugfest events, Mu Dynamics is pleased to see the increased industry interest in secure Next-Generation Network deployments that prevent unexpected weaknesses in real-time networked applications,” said Adam Stein, vice president of Marketing for Mu Dynamics who will also serve as the group’s vice chair. “Many of our operator and vendor clients play an integral role in this important ecosystem with a high percent of their revenue dependent upon resilient, reliable and secure product development and continuous service deployment.”

About Plugfest 7

IMS OSS/BSS & Security Working Group will be an integral part of the IMS Forum’s Plugfest™ 7 interoperability test that will take place in June 1-5, 2009 at the InterOperability Lab (UNH IOL) in Durham, NH.  Participation in NGN IMS Plugfest 7 is open to all companies. For online registration and info contact the forum at: info@IMSforum.org or visit event at www.NGNforum.org.

About the NGN Forum™ and IMS Forum^®

The NGN and IMS Forum are the only global telecommunications associations devoted to Next Generation Networks (NGN) service delivery and interoperable IP Multimedia Subsystem (IMS) services architectures and solutions. The Forum’s mission is to enable delivery of M-play™: rich multimedia, mobility and fixed services over wireline, cable, GSM, UMTS, Wi-Fi, WiMAX, LTE and fiber broadband networks. The Forum is the creator and organizer of the IMS Plugfests™ and NGN Plugfests™, the industry's only events focused on verification and certification of IMS and NGN service interoperability through the IMS Certified™ and NGN Certified™ programs.

Through organized Plugfests, technical working groups and other activities, Forum members develop cost-effective technical frameworks for revenue generating converged IP NGN solutions.  The combined organizations include over 2000 executives and technical, business development and marketing professionals from global and emerging equipment vendors, solution providers, integrators, service providers, and governmental agencies. For additional information or to join the NGN Forum, IMS Forum the IMS Plugfest, and/or the NGN Plugfest, please visit www.IMSforum.org or www.NGNforum.org.

tags: ngn, ims, plugfest, gsm, umts, wi-fi, wifi, wimax, lte, ngnforum, imsforum, bss, oss

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What will eBay do with Skype money? Buy into Korea

$US 1.2 billion for a stake in South Korea's Gmarket auction site. Skype had better fetch a pretty penny if eBay Inc. is going to keep up this M&A effort.

Skype is currently operating in Korea as part of eBay's Auction company. Will Skype's separation from eBay require reorganizing their Korean operations?

The press release and SEC Form 8-K.

UPDATE: eBay stock is back where it was a week ago, discounting both the Skype IPO and Gmarket news.

tags: skype, ebay, gmarket, auction, kr, korea, business, investment, m&a

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Skype on the Web Trend Tokyo Train Map

I love these kinds of industry visualization projects. This is "the web industry" layered atop the Tokyo train system. 

Here's a close-up of the Skype station on the Money line, with Janus Friis standing by. Serving Harajuku. Sharing a line with eBay and PayPal this year.

Skype is looking more successful than eBay, less than PayPal, comparably stable.

There are no lines for Conversation, Talk, Communication, Collaboration, or Getting Things Done. Where would you put an independent Skype post-IPO? The Application Line with other platform plays like Google, Adobe, Yahoo!, Microsoft, Mozilla and Facebook? 2010 looks interesting.

Art by Information Architects.

tags: skype, ecosystem, datavisualization, mapping, maps, dataviz, industry, ebay

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+iPhone: Updating the Skype Product Family mindmap

Added Skype for iPhone to the Mobile Software branch of the Skype Products mind map.

UPDATE: 30 March 2009: Added Skype For SIP, Skype for iPhone, Skype co-brand clients, Skype for Asterisk SDK. Changed from eBay extension to eBay toolbar.

tags: skype, iphone, products

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Skype For SIP: Big Money, Skypeless, Brand Destroyer

Skype For SIP (SFS), announced today, is really two Skype for Business services.

And a huge problem.

The services:

Skype-Name-to-SIP-Address. Skype for Business users map one Skype name to one IP address. So people can Skype your Skype name but your SIP PBX rings.

SIP-Switch-to-SkypeOut. Use SkypeOut for all the calls going out of your SIP telephone system. Billed at Skype's typical per-minute rates: higher than what you can buy in bulk, much cheaper than what you get from your local phone company.

Both are controlled through the Skype.com web site and setting on your telephone switch. Business Control Panels let organizations distribute money to multiple Skype accounts.

Between the two parts, SFS gives Skype an excuse to get in front of small business telecom buyers. It offers cost savings and predictability on outbound calling. It provides simple routing of incoming Skype calls to your call center. No hardware beyond your SIP PBX. No software to install. You don't even need to use Skype.

SFS is the second workplace product Skype is launching this year. Skype For Asterisk (SFA), still in closed Beta testing, is Asterisk add-on software running on your Asterisk telephone switch. SFA gives your phone switch the ability to send and recognize Skype instant messages and presence. SFA also lets programmers integrate Skype into other Asterisk programs, like phone trees and speech recognition.

Distribution.

SFS will be distributed on Skype.com and by Skype "service partners", local firms that install and repair phone systems. Service partners will receive commissions from Skype on minutes purchased by customers they refer to Skype. Skype will send referrals to authorized service partners.

Skype does not have a service partner network now. A 2007 project tried to distribute Skype for Business starter packs. 

The Strategic Opportunity.

Skype For SIP home page on launch day, 23 March 2009

Skype is opening doors with SFS.

They're setting up a distribution channel and meeting enterprise IT/telecom people. Skype's brand may entitle it to sell Skype-flavored minutes at a premium. All of this should be good for Skype's sales.

How big is the opportunity?

The normal VC math: 100 partners worldwide (could be 1000 easily) x 100 small companies per partner (could take time) x 1000 minutes/month (an extremely low number) * $0.20 per minute = $2 million/month. This run rate could grow easily to $20 million/month in a year. 

That's the quarter billion dollar per year upside.

The Strategic Downside.

The downside is huge.

Skype For SIP is barren of everything that makes Skype meaningful and invaluable in the workplace.  

Skype is selling cheap, convenient minutes to enterprise plumbers. Legacy audio quality. No audio, video, conferencing, buddy lists, file sharing, presence, or software extensions. SFS is the commoditized low end of VoIP.

With SFS, Skype defines itself to the channel and to its business customers as a "value" provider, helping companies shave pennies, competing with the "minute stealer" industry. While there's money to be had, Skype For SIP

This abandons Skype's central tenets: 

• Be a live, realtime social network.
• Enrich the quality of conversation through higher quality and multiple modes.
• Build Skype Dial Tone by having more individuals log in for more time each day, earning network effects.
• Be the tool people use for workplace collaboration and coordination. 

Skype For SIP is a Skypeless product.

Nobody at a company which uses SFS needs to use Skype. Nobody needs to turn on a client or use an embedded Skype phone or download Skype Lite for a mobile.

In short: SFS undermines Skype's brand.

Warnings for 2009.

• No Emergency Calls. Calls to paramedics, police, and fire will not go through. Standard blocking by the Skype network. So configure your IP-PBX to keep a non-Skype connection open.
• Security sucks. No encryption for now. A Skype spokesperson wrote "at the start of beta, we do not support encryption due to the lack of support among most IP-PBX vendors. We will be adding TLS (encrypted signaling) and SRTP (encrypted media) during the beta period."
• ID Schism sucks. No way for users to tell if a Skype account is a "consumer" or a "business" or a robot account. No way to tell if a Skype user is seeing your IM or your presence or can see your video.
• English-only. One language for the web site and documentation. No internationalization for a while.
• Digital Identity Lifecycle sucks. No way to transfer a Skype account (in the event of M&A, personnel change, for example) or to integrate this with your network/server management systems.
• Only One Skype ID per Company. So if you have more than one trademark, you're out of luck. If you've already secured your trademarked Skype name, you're in worse luck. Only Skype names created through the new service will work. This contradicts what a Skype source told Dan York.

See also:

• Skype Now Means Business, Friends The SIP World, Om Malik, GigaOM
• Skype Targets Businesses to Ring Up New Revenue, Geoffrey A. Fowler, Wall Street Journal
• Skype tears down more walls with "Skype For SIP", Dan York, Disruptive Telephony
• Business Long Distance: Death by 1,000,000 PBX's, Jim Courtney, VooW
• Techmeme coverage.

 

Thanks to Ian Robin, who runs sales and marketing for Skype for Business, for the briefing.

And, as we often do, the full text of the news release.

Skype opens up to corporate SIP communications

New beta program brings Skype voice calling to SIP-based PBX systems

LUXEMBOURG, March 23, 2009 — Skype today announced the beta version of Skype For SIP for Business users. SIP, short for Session Initiation Protocol, is an open standard and the leading voice over Internet protocol used in businesses telephony networks at millions of locations globally. According to IDC, 438,000 IP PBXes were shipped worldwide in 2008.^*

Skype For SIP allows SIP PBX owners to benefit from Skype’s low cost calls to fixed phones and mobiles around the world, and to receive calls from Skype users directly into their PBX system.

Businesses can now be reached by the community of over 405 million Skype registered users through click-to-call from their business Web sites. The calls will be received through their existing office system at no cost to the customer. At the same time, businesses can benefit from Skype’s low-cost global calling rates when placing calls to landlines and mobiles worldwide from devices connected to their PBX systems. In addition, they can choose to purchase online Skype numbers available in over 20 countries to receive calls from business contacts and customers who are using traditional fixed lines or mobile phones.

“The introduction of Skype for SIP is a significant move for Skype and for any communication intensive business around the world,” said Stefan Oberg, VP and General Manager of Skype for Business. “It effectively combines the obvious cost savings and reach of Skype with its large user base, with the call handling functionality, statistics and integration capabilities of traditional office PBX systems, providing great economical savings and increased productivity for the modern business.”

"Businesses have been waiting for Skype to make a concerted push into the business space for a while,” said Rebecca Swensen, IDC’s Research Analyst, Enterprise Mobility and IP Communications Services. “Connecting to existing standards-based SIP PBXes is a good way for Skype to start doing so. It will be interesting to see how large companies change their thinking about the deployment of Skype within the network.”

Key Features

The beta version of Skype For SIP will enable business users to:

• Receive and manage inbound calls from Skype users worldwide on SIP-enabled PBX systems; connecting the company Web site to the PBX system via click-to-call
• Place calls with Skype to landlines and mobile phones worldwide from any connected SIP-enabled PBX; reducing costs with Skype’s low-cost global rates
• Purchase Skype’s online numbers, to receive calls to the corporate PBX from landlines or mobile phones
• Manage Skype calls using their existing hardware and system applications such as call routing, conferencing, phone menus and voicemail; no additional downloads or training are required

How to participate

The Skype For SIP beta program for business users opens today. SIP users, phone system administrators, developers and service partners are invited to apply at www.skypeforsip.com. Applicants will need to be businesses, have an installed SIP based IP-PBX system, as well as a level of technical competency to configure their own SIP-enabled PBX. The initial beta is available to a limited number of participants.

During the beta period all calls will be charged at standard Skype rates. Further pricing details will be announced when the product is fully launched later this year.

tags: sfs, sfa, skype for asterisk, skype for business, skype for sip, sip, skype

Call me at +1-510-455-4384, follow @skypejournal and @Phil Wolff. Ask for an invitation to the Skype Journal private roundtable.

eBay Analyst Day 2009: The slide show

Wednesday 11 March 2009 was eBay's day to sell Skype to the investor community. Here's the combined slide show.

eBay 2009 Analyst Day

The Skype slides start in page 145.

Thanks, Jennifer.

tags: skype, ebayinc, financials, strategy

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Skype will license its superwideband codec for free

SILK is making Skype sound great. Literally sound good to human ears. Today Jonathan Christensen announced Skype will license their SILK audio codec binaries freely, broadly, without royalty, and without ties to Skype products.

I was wrong. The codec license will not be open source. Audio codecs only.

It's early. Details are firming up on which platforms will be available first. Skype is still determining the signal processing partners who will release SILK optimizations for those platforms. License is still with lawyers.

Skype spent millions buying the talent and building the technology behind SILK. Why would Skype give up a competitive edge? I can think of a short term reason and longer term one.

Short term, Skype needs gear built to support the high fidelity of the Skype network. When SILK is comes on mobile phone chips, for example, Skype won't have to consume as many CPU cycles, chew up as much power, or run as hot. When SILK comes as an ASIC core, companies that make webcams, headsets, microphones, speakerphones, skypephones, webcamphones, and all the other ways we get our voices in and out of Skype will reproduce our voices in high fidelity.

Longer term, Skype's platform strategy calls for interop. To make that work, Skype will need to make available some of the components you find in a Skype client. Audio codecs, like SILK. Video codecs, like the ones Skype licenses from On2. Security components. When Skype is ready to offer developers the ability to build Skype into web apps, look for more sharing and licensing.

Get in the queue for early release: email SILKSupport@skype.net with subject "SILK Binary SDK Request".

Technorati tags: skype, silk, codecs, codec

Skype to announce… something? at eComm09

Skype strategist Julien Decot is off the 2009 Emerging Communications Conference speaker list and Skype GM Jonathan Christensen has an announcement to make. Mr. Christensen's keynote is described as:

Codec Evolution and Industry Proposal (Plus Skype Announcement)

The PSTN has been bandwidth limited from its inception. This was done to keep equipment costs down. But is 3kHz really enough to get your point across? Wideband audio has emerged in services like Skype and with today's low cost, silicon based manufacturing and the move to all IP transmission there is an opportunity to finally break through the POTS bandwidth barrier. Jonathan will discuss the complex audio codec landscape and put forth a proposal for how we [the Industry] can make wideband audio ubiquitous.

Let's parse this and madly speculate where Jonathan's going.

The PSTN has been bandwidth limited from its inception. This was done to keep equipment costs down.

The public switched telephone network (PSTN) cuts off your speech's top (high notes) and bottom (low notes). While some microphones and speakers, like those used by musicians, capture everything, most equipment in mobile phones, landline phones, speakerphones, or even Skype phones captures just enough of your sound to be understood.

But is 3kHz really enough to get your point across? Wideband audio has emerged in services like Skype

Wideband audio restores the lifelike quality of sound by capturing and playing more of your sound's natural highs and lows. Skype's new SILK codec, which moves sound between Skype and your computer, and between Skype and other Skype users, is a wideband codec. Incredibly vivid sound.  

and with today's low cost, silicon based manufacturing

Putting software into a chip... SILK codecs as semiconductor "cores"? A core is a readily usable bit of software already rendered in the software language of chip programming. Everything electronic has some sort of chip in it, from radios to cars. Pre-built cores make it fast, cheap, and easy to drop new features into your product. "SILK Inside"?

and the move to all IP transmission

Most mobile and landline phone companies have switched their plumbing from analog to digital to Internet Protocol.

there is an opportunity to finally break through the POTS bandwidth barrier.

POTS (plain old telephone service) is basic phone service, the one with the 3kHz bandwidth limits. Could the breakthrough be offering SILK Inside in the routers PSTN services use? In mobile phones?

Jonathan will discuss the complex audio codec landscape

Ummm. I haven't a clue. But Jonathan should know; he's been working in the codec business for years. 

and put forth a proposal for how we [the Industry] can make wideband audio ubiquitous.

If you want something ubiquitous, you have to take away cost and risk. Sounds like open source to me.

So, again, this is me guessing what Skype will announce and all errors are mine:

1. Skype will release SILK with an open source license.
2. Skype will partner with an ASIC semiconductor manufacturer to release SILK in VHDL (or another chip design language).
3. Skype has partnerships with Cisco, Motorola, Nokia and other companies to use the chips in networking products and mobile handsets.

Let me make another assumption. Skype will announce a public platform in 2009. So people could make their own Skype clients or build Skype into their own products/services. To make that work, Skype needs to share codecs and encryption with developers. Licenses could be for packaged software or for open source libraries. I'm betting on open source for the codecs and shrinkwrapped for the encryption.

What's your wild guess?

Unlike death and taxes, mobile Skype is not certain

Vodafone, Orange, O2 and others will have to succumb to the market reality that the Skype offering is a win-win...
— Jim Courtney

Jim, you could be right, but I don't think so.

There's nothing inevitable about Skype having success with other carriers, Nokia or not. Nokia sales are down about 25% from last year and Nokia has negligible share of US markets. That's not a powerful position from which to bargain.

Skype had to sit down with 3 and negotiate terms, but Skype hasn't done much if anything with the other mobile carriers. Unlike 3, Skype@Nokia is a fête accompli, a take-it-or-leave-it proposition. The deal is a smack in the face to carriers who thought they had time to make their own Skype-killers, to wield lobbying power with regulators, to get their iPhone on and sell data plans without cannibalizing voice revenue.

Do you really think a year of 3 making a little coin will be enough to convince ranks of mobile execs to abandon strategies they just spent years and career capital to put in place? Do you really think they are excited about the chance to partner with an auction company that's been sucking the profit out of international calling and undercutting broadband voice pricing?

They are wedded to their value-added projects ("you don’t want to be just a dumb pipe do you?"), and Skype isn't even on the menu.

The opportunity for an upside and the threat if they don't sign on had better be overwhelming for them to risk their jobs, their shareholders' ire, and this quarter's cashflow. Skype's mobile bizdev team has a hard job ahead, and acceptance any time soon is far from certain.

Deadpool: BT's Go!Messenger for Sony PSP

No more PSP-to-PSP voice and video calling with Go!Messenger, the product of a Sony Computer Entertainment Europe and BT Group joint venture. 

A year from its launch, too few people used Go!Messenger to justify operations. The service will end 31 March 2009.   

Skype is still available for the Sony PSP. Skype has scale advantages over Go!M: you are about 1000 times more likely to find someone you know within Skype's network. You have hundreds more devices to use, like mobile phones and PCs. You and everyone you know are that much more likely to have Skype dial tone.

Skype's scale advantage is so overwhelming that Skype wins even when BT offers video calling and video messaging and Skype doesn't. 

BT didn't rule out trying again. (Maybe with a flash solution based on BT's Ribbit platform?) Meanwhile, Sony is restructuring, bringing games, PCs, mobile electronics and software into one division.

tags: skype, sony, scee, bt, go!messenger, messenger, go, psp, playstation, portable, dialtone

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NSFW: Skype, sex, and the sex industry

OK, all the sex stuff's a been a bit much. But I wanted to let you get a feel for yourself. 

We've never really covered Skype in the bedroom. So, in the run up to this weekend's Valentine's Day, I've been sharing first hand accounts from twitter and the blogosphere about Skype and sex.

I wanted to show the healthy, relationship-positive side to Skype and sex. So I went and found it.

In Skype Sex Will Turn Software Hard a college student explains how Skype video supports her long distance relationship with her boyfriend. And in The Dangers of Skype-Sex.. a true story a woman laughs about a hangnail injury during video sex with more casual lovers. Emiliey checks with two budding lovers did u have skype sex? because she heard a rumor.

When the phrase "phone sex" becomes "skype sex," you're hearing a cultural phenomenon go mainstream.

This is great for Skype.

Nearly every technology gets used for sex when it becomes

• cheap or free,
• reliable, and
• many people have access.

Skype is far past that tipping point.

What attracts lovers to Skype are the very things that make Skype attractive to a grandmother vidding her grandkids. Free, high audio quality, video quality at full screen, chat and presence for arranging calls, agile bandwidth management, privacy, and interruption management.

The bedroom is the last part of the home to get technology, and Skype is winning its way through that door.

Downsides.

• Skype Spam. I'm tired of sex spam in Skype chats, IM adverts for webcam sex sites. Beyond the rude interruptions of SPIM (messaging spam), they cheapen the world's perception of my favorite conversation channel.
• Skype Prime limits. Skype forbid selling "adult, sexual or pornographic" services through its Skype Prime terms of service.  Skype's own brand is cute and wholesome. Prime's beta protects that image and avoids criminal issues by keeping the service family friendly.
• Harassment. Women often "decline to state" their sex in Skype profiles. This sometimes prevents unwanted attention. Dina Mehta's landmark report, SkypeMe Eve, showed the dramatic difference between the number of stranger approaches received by men and women.

Opportunity.

I occasionally follow adult industry information technology. In many respects they lead the Internet by a year or two.

• They drove the inventions of payment systems for phone calls and for Internet commerce, long before Skype Prime, PayPal and Amazon.
• They drove innovation in video distribution and cheap video production back in the VHS days and later in the early webcam and pre-torrent download days.
• They pioneered bandwidth management and traffic analysis.

If you talk with young adult performers today, so many of them have sysadmin skills and talk about Ruby on Rails and CDNs and SEO and all the other geekery that boosts the right traffic, keep operations up, and keep site costs down.

Skype's technology doesn't offer the right connections for integration into today's commercial sex services. Skype would need to offer:

• Pseudonymity. Privacy is important in commercial sex services.
• Voice, video, and IM gateways. To pipe video between Skype users and the hosted media-stream management systems that route stored and live video.
• Payment system integration. So you can pay, confidentially but reliably, with Skype credits.

Talking dirty pays well, as you'd expect in an US$18 billion industry. I expect to see the Skype network interop with adult businesses as the technologies and markets mature. If landline and mobile phone companies, ISPs, web hosting and payment services do business with adult service providers, why not Skype?

People using Skype for sex among themselves affects the sex industry. It raises expectations for quality and personal engagement. It lowers expectations for cost and redefines speed and convenience of setting up a video call. Perhaps most important: Skype sex is market evidence that adult IT providers trust, spurring entrepreneurship in two-way video chat technology.

Summing up.

So people's love lives are joining the rest of their onlives. And Skype is just the latest utility to bring people closer together. Saint Valentine would be proud that Skype serves Cupid.

Have a lovely Valentine's Day weekend. Skype someone you love.

tags: skype, sex, love, valentinesday, usage, video

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Skype 4.0 Gold – Why Pave the Newbie Journey?

Software is always too hard. Skype's advantage five years' ago was it just worked. That's no longer enough. Skype serves pioneers and early adopters just fine, but now Skype is mainstream and needs to be easier, simpler, more streamlined in turning prospects into loyal users.

4's user experience revamp shows much of that thinking.

Skype needs Scale

Skype is actively driving for scale. Despite being the world's largest VoIM network, they feel small. With more people using Skype (new record set yesterday), Skype can earn three benefits.

• Social Graph Lock-In. When everyone you know has a Skype name, you need a good reason to leave the Skype network. When all your contacts are organized nicely and you'd have to recreate those relationships elsewhere, you're going to stay.
• Becoming a default communication channel. Do you reach for your phone when you want to talk to someone? Or do you reach for Skype? Once you have that kind of mind share, the cost of getting and keeping customers goes down and rates of use go up.
• Better people discovery. Think white page and yellow page directories. Less important for close friends and family, more important for finding useful strangers and friends-of-friends. 

Why do you rob banks? Because that's where you keep the money.

Where do hundreds of people talk to each other?

• Online. Voice over Instant Messaging (VoIM providers like Microsoft, Google, Yahoo!, AOL, Tencent and many others) and social networks (like facebook).
• Mobile Telcos. Serving billions.
• Landline Telcos. Serving billions. 

While it's great that up to 16 million people are logged in at the same time, thousands of millions of people have mobile or landline dialtone.

So Skype is still small.

And needs to get more customers, keep them, and help them become active.

Skype is bringing in people from many sources. But Skype loses people to just three: death, defection to a competitor, or abandonment of Skype-like activity. What can Skype do about defection and abandonment?

Optimizing User Experience for Heightened Experiences

While Skype doesn't use this language, they've applied industrial engineering ideas like the Theory of Constraints to improving design. The TOC says to look at your factory, discover the biggest throughput bottleneck, unplug it, see how throughput changes, then start over with the new biggest bottleneck.

Skype applied this to the newbie journey, finding points of pain and abandonment (and improving them), and moments of joy and satisfaction (and enhancing them).

For every thousand people who hear of Skype, only a fraction look for it, download it, try it, and have delightful experiences that keep them hooked on Skype.

Skype's improvements should translate into higher download rates, more new account registrations, more contacts per address book, more first voice calls, more first video calls, more IM chats (a surprising number of people don't know Skype has instant messaging features), longer calls, more time logged in (Skype dialtone), and stronger word of mouth.

Next up, the newly paved experience.

Technorati tags: skype, design, strategy, ui, ue, ux, theoryofconstraints, toc

SILK: Skype's New Audio Codec Sets New Performance Standards for Voice Conversations

The most recent hotfix release of Skype for Windows 4 Beta 3 had one key new feature:

• feature: Super Wideband audio codec

The associated Skype Garage post went on to say:

... Starting from this version we've included the new Super Wideband Audio codec. This is our second in-house built audio codec especially designed for calls over the internet with superb quality. The Super Wideband Audio codec will help you most on lousy network conditions and when you have lower bandwidth available, although it also improves quality in normal conditions too.

Today Skype for Windows 4.0 Gold release will now allow the entire Skype for Windows user community to take advantage of the SILK codec's features.

SILK is basically a significant improvement on Skype's previously acclaimed HD Voice performance. I have now experienced a couple of calls where this SILK codec was available at both ends of the call; it certainly provides a clearer, crisper audio experience. (For those unfamiliar with the term "codec" they are algorithms engineered into the voice communications network for converting audio waveforms into digital streams for transmission over the communications network and then converting them back to an audio waveform at the receiving end.)

Last week I had the opportunity to interview Jonathan Christensen, Skype's GM for Media Platform to learn more details about this "SILK" codec. This codec is the outcome of a three year development process with a focus on:

• improving the audio bandwidth out to 12,000 KHz
• providing bandwidth management to deal in real time with degraded network conditions
• balancing the codec optimization between voice, music and background noise, each of which can have an impact on the overall user experience
• overall robustness to provide a more consistent user experience, regardless of network conditions and an individual caller's voice signature.

While the human ear can hear sounds up to 22 KHz the actual sound produced by human vocal chords has a frequency range of 20 Hz to 14 KHz; however, sounds below 70Hz are not what you would call "pleasant" (as experienced with those "thump, thump" car speakers). Skype's SILK codec is optimized for the transmission of audio between 70 Hz and 12 KHz. Compare this to the bandwidth of the PSTN's standard G711 codec of 400 Hz to 3.4KHz; wider band codecs, such as AMR-WB and iSAC cover the range of 50 Hz to 7 or 8 KHz respectively. And, as indicated in both the AMR-WB and iSAC Wikipedia entries, there is a major licensing cost consideration:

AMR-WB has been standardized by a mobile phone manufacturer consortium for future usage in networks such as UMTS. Although its speech quality (similar to Skype, including glitches) makes it likely that older networks will have to gradually be transformed to support wide band, its high legal costs may limit its uptake.

However, in order to deliver on this audio bandwidth, Skype also had to consider getting the voice stream across the Internet. SILK interacts with Skype's redeveloped (network) bandwidth manager that uses a feedback algorithm to provide "adaptive bandwidth management". SILK is a "variable bitrate" codec that can scale the bitrate (amount of data being transmitted as voice packets) up and down as necessary. The key network parameters governing this adaptation are packet loss and jitter changes. Fundamentally, to the end user, this means incorporating a level of call robustness that results in improved consistency of call quality, especially for lower speed Internet connections (below 3Mbps) with no user intervention required.

Another factor to be considered are accommodations for differences in perception of audio quality depending on whether there is voice, music or random background noise involved in the audio signal. Suffice it to say that Skype's engineers have been involved in a balancing act amongst these factors in the development of the SILK codec.

The bottom line is that Skype has set new barriers for voice call quality and and the associated user experience. Since there needs to be SILK at both ends of a call, the number of calls I have experienced with SILK has been limited but, as mentioned above, those I have made had a very crisp, clear audio quality. With Skype's launch today of Skype for Windows 4 Gold release almost all my Skype-to-Skype calls will be able to achieve this performance level. Going forward expect to see SILK incorporated into Skype for Mac in the near future. But the the SILK codec has been modularly designed for embedding into silicon; we can expect future Skype-enabled hardware platforms to be able to take advantage of SILK's performance.

And finally note that, in order to keep costs low while improving call quality, Skype has no licensing costs associated with their proprietary codec. Is there a potential for a new Skype revenue stream by licensing this codec to other communications service providers as well as hardware vendors?

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Skype for Windows 4.0 Goes Gold; Improved UI, Audio and Video Performance

Over the past eight months 1.2 million Skype users have participated in the Skype for Windows 4.0 beta program (stage 1, stage 2, stage 3). During this beta period, not only current user feedback was sought but also feedback from new users installing Skype for the first time. The goal was to provide a user interface that was more intuitive while encouraging users to go beyond simply voice calls to experience and use chat and video conversations. Today Skype is announcing the Gold release of Skype 4.0 for Windows. From the download page:

We've built this brand new Skype so you can have the conversations that make a difference to you, every day. It's easy to use, plus step-by-step guides help you get started.

While most of the new features have been revealed during the beta period, Skype's marketing will focus on three key features:

• New user interface; with over 25% of Skype-to-Skype calls involving video this new release has been designed with a focus on improving the video call user experience.
• Improved call quality: Skype 4.0 for Windows incorporates Skype's new SILK codec whose features are discussed in a separate post today. Bottom line is a crisp, crystal clear audio experience, yet only half the network bandwidth of other codecs is required to support a voice call.
• Bandwidth management: a new bandwidth manager has been developed with the goal of improving overall call performance by adapting, in real time, to degraded or low speed network conditions, such as those caused by excessive packet loss and/or jitter.

The new user interface also has taken into account factors that encourage users to explore Skype beyond voice calling. Incorporating beta user feedback Skype has found that the new UI is driving up adoption rates for Instant Messaging, file transfer and video. When you open a contact window launching a voice, chat or video conversation requires a single click on the respective voice ("Call"), chat or video button. The associated text pane tracks not only chat messages but also voice and video call detail information (launch time, end time) as well as file transfer information. And, as in the past with chat, the entire record is all archived on your local PC for future recall.

Other features: You can choose to view your Skype activity in one larger window or in individual "conversation" windows. During a call a drop down menu on the "call audio control bar" provides quick access to making any necessary audio or video settings. Single click buttons allow you to quickly change or add conversation modes to adapt to the context of the conversation. A wizard provides assistance with testing audio and video settings. During their testing they found that these features drove new users to more quickly experience chat and video while there was an increase in usage of these modes by legacy users.

On-the-fly the bandwidth manager can adjust both video and audio transmission by making real time adjustments to parameters such as video resolution, frames-per-second or audio bandwidth. to ensure an ability to maintain a basic level of communication while enduring these conditions. When combined with SILK's reduced network bandwidth requirements, the overall goal is to improve the overall user experience with minimum or no user intervention required.

Two changes;

• The SkypeMe! status button has been removed as a result of its tendency to be used for spamming and other forms of unwanted calls. (Of course you also still have the option to only allow callers in your Contact list to call you.). Along with this Skype has introduced "abuse reporting" which is monitored by Skype personnel for dealing with undesirable calling activity.
• While you can still participate in Public Chat sessions launched or joined from Skype 3.8, there is still no ability to launch or join a Public Chat from Skype 4.0 for Windows. This is my primary complaint about the new user interface. We have had a Skype 4.x Public Chat discussion ongoing since May, 2007; it has provided an interesting dialogue amongst Skype users and Skype personnel, including some feedback on features in Skype 4.0. And it has supported many other informal "water fountain" conversations amongst special interest communities of Skype users. Skype for Windows Product Manager Mike Bartlett claimed yesterday, during an interview, that Skype was reviewing how to embark on "public conversations" in today's messaging world where services such as Twitter and Friend Feed also provide ongoing dialogues. However, Skype Public Chat has its own "space" in terms of user community; it needs to be brought back as soon as possible.

Over the next few weeks, with more experience using Skype 4.0 for Windows we may cover some features in more detail. In the meantime you can download it here. We look forward your feedback in the Comments.

Yesterday Skype went past 16 million concurrent users around 1830 GMT. It will be interesting to monitor both the concurrent user number and Hudson Barton's "real user" indicator as Skype 4.0 for Windows installations grow over the next couple of weeks..

Of course, the best news is that Skype-to-Skype calls (including multi-party calls), chat and video calling remain free. And there are calling plan subscriptions available for low cost calling to landlines worldwide.

From the Release Notes:

• feature: New style when copying and pasting text in an instant message (text quoting)
• featue: Video Call in separate window
• improvement: Skype now creates thumbnails of display pictures
• change: Get more ringtones and custom sounds link removed from options panel
• change: Removed display bandwidth usage option
• change: Dial pad will be opened automatically on call to landlines or mobiles
• change: Increased minimum window size in compact mode

Other Posts:

• Product Manager Mike Bartlett: Skype 4.0 - It's All Yours
  
• Mike Bartlett Discusses Skype 4.0 Beta on Squawk Box
• Skype's videos about the 4.0 beta limited release
• Mike Bartlett Comments on Skype 4.0 User Feedback
• Mike Bartlett on Skype 4.0 Beta 1 Feedback

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As netbooks become the new mobiles, will AT&T preload Skype?

American wireless companies are control freaks when it comes to configuring the mobiles they sell. They limit hardware features, choose applications, and otherwise protect their walled gardens.

Now they're set to sell netbooks with wireless data plans. AT&T piloted this with Acer and Radio Shack over the holidays.

The software that comes on PCs is usually determined by the manufacturer and the operating system. Skype comes on some netbooks via Linux, on some PCs via manufacturers. Will AT&T and others use their power to add Skype to netbooks? Or will they keep Skype off of netbooks?

Should netbook+wireless proves popular, Skype will want this desktop real estate. Trial and adoption rates are much higher with the trust that comes from being preinstalled.

tags: skype, netbooks, att, at&t, acer, netbook, wireless, strategy

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The Skype Restructuring: Global Products, Regional Markets

Josh Silverman joined Skype as President early in the spring of 2008; since then he has been reviewing Skype's opportunities and building a team of experienced executives who can bring to Skype the products, programs and team building expertise required to operate a business with a run rate of $600MM per year, 20% contribution margins to eBay and growing at 380,000 new account registrations per day (with "real user" growth also increasing significantly).

Summarizing the past executive appointment announcements we can clearly start to see the evolution of a business structure, along with each unit's responsibilities:

• Operations: Product, Marketing, Customer Care, Support
• Technology: Engineering, Platform, Development Community
• Strategy: Partnerships, Strategic Alliances, Acquisitions
• Administration: Global Communications Human Resources. Finance, and Legal round out the top executive team.

During our interview at CES 2009 with Skype COO Scott Durschlag, he outlined details of his restructuring of Skype's Operations team along two axes: product and geography under the mantra of providing "Skype Everywhere".

Global product offerings will encompass three divisions: consumer, business and mobile, each responsible for developing products. Each of these groups will be interacting with members of CTO Daniel Berg's technology teams to convert their technology developments into marketable global product offerings and to adapt the technology to meet product marketing needs.

• Consumer will involve the current Skype client desktop offerings along with hardware, such as Skype phones.
• Business starts with the current Skype Business Control Panel but intends to expand well beyond this starting point into a range of offerings, such as Skype for Asterisk and the recently announced IBM LotusLive developments, addressing the small-to-medium business market.
• Mobile involves current products such as Skype for Windows Mobile, Skypephone (in conjunction with iSkoot), the recently launched Skype Lite (including Skype for Android) as well as any upcoming offerings for the iPhone and BlackBerry

In addition each of these divisions will be responsible for developing appropriate customer care and support programs appropriate to market demands. For instance, the business unit will come up with ongoing support programs relevant to supporting sustainable business operations of its products' users. Ideally these programs would follow the model of Red Hat for Linux or Digium for Asterisk and build up a network of resellers and VARS who would provide relevant and timely end user support. While Dan Berg's technology team will be responsible for third party developer partner support, an additional challenge for the Business products group will be to assist with marketing of business applications offered by these developer partners.

While Skype veteran Stefan Oberg is heading up the Business unit, announcements re appointments to head up Consumer and Mobile are pending.

Along the geography axis is a recognition that, while the Products divisions have a global mandate, there are different market needs within different regions of the world. For instance, in many Asian market wireless carriers do not subsidize mobile phones as is the North American practice. This requires a differentiated approach to these markets with respect to how easily innovations, especially around reduced calling costs, can be introduced to these markets.

The geographical market responsibilities are:

• Americas: Don Albert becomes General Manager, Americas. Don has had North America responsibility for a couple of years and will now be responsible for both North and South America. With respect to the latter he is looking forward to building on all the Skype activity in Brazil, for instance. (And, yes, once again at CES Don was made aware we are awaiting SkypeIn and a Skype Store for Canada)
• Europe, Middle East, Africa (EMEA): appointment pending
• Asia/Pacific: Yesterday we saw an announcement of the appointment of Dan Neary as General Manager, Skype Asia Pacific. One of Dan's initial responsibilities will be to build and monitor closer relationships with partners such as TOMSkype to avoid embarrassments such as that created by the TOM Skype privacy breach we have reported on last fall.

Outstanding executive appointments are expected shortly; at this point it's becoming all about execution. The next six months will tell the story.

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Skype COO Outlines Skype's Software Guidelines

During our conversations with Skype COO Scott Durschlag last week at CES, Scott outlined Skype' criteria for its software development going forward.

First was the emphasis on "liquid communications" through statements such as "Skype Whenever, Wherever". Just as today you can pick up any PC or mobile platform and find all the Google Tools (Search, Maps, News, Reader, etc.). Skype wants to be on virtually any platform or device.

Pick up a smartphone, find the Skype button. Turn on the TV, find a Skype button, have a conversation. Open a web browser; start a Skype session. All this to complement Skype on the desktop. Today, besides on the desktop, you can find Skype on over 200 mobile phone handsets, several (Sony) mobile devices, Skypephone and Apple TV. But Scott emphasized, this is only the beginning. It will only start to get real when we see Skype on higher profile devices such as the iPhone and BlackBerry or when we start to see Skype seriously back into the hardware device business with vendors such as Philips and iPevo.

Then Scott outlined four benchmark criteria that every implementation of a Skype on any platform or device must meet:

• High call quality
• Simple and easy user interface
• Consideration for battery life
• Security

Last week's hotfix upgrade of Skype for Windows 4 beta 3 included the first implementation of Skype's three year effort to develop the SILK codec, increasing the audio bandwidth to 12 KHz while effectively reducing the Internet bandwidth consumed during a Skype call.

A key reason for Skype's rapid and widespread adoption has been associated with its ease-of-use. Yet Scott says the Skype conversation user experience needs to be even easier to encourage adoption by a broader user base. Developing a more effective user interface has certainly been a focus of the Skype for Windows 4 beta program. At the Skype CES press conference Scott reported that, in a recent survey of users, 88% preferred the new UI to the previous Skype for Windows 3.8. But I'm still wondering if the Skype for Windows team could take a look at Skype for Mac and implement a "drawer" type interface to manage and select the active conversation. For the longer term evolution of Skype clients hopefully Skype also has a look at Dan York's post on Skype's fragmented product strategy.

Battery life on smartphones was a key issue that prevented Truphone, who uses a native VoIP client for calls over WiFi, from launching a native VoIP smartphone client running over 3G networks. Instead they launched Truphone Anywhere that takes advantage of the underlying network 3G GSM voice channel and uses the data channel to set up a call via a server that, in turn, sets up a VoIP client. That voice channel tends to make much less use of the device battery than a constantly compressing/decompressing VoIP client that devours the underlying processor activity. Addressing the battery life issue is a major reason why we see Skype using a similar calling architecture when launching the Skype Lite Java client on over 100 Java-enabled cell phones, including those based on Google Android.

Security is an issue that I'll leave to Dan York and others who are able to cover this issue more knowledgeably and effectively. Suffice it to say that we would expect security to continue to be a feature of all Skype products, including those that use the mobile voice channel for placing calls from mobile phones.

Two take-aways from these statements:

• Fundamentally we should expect Skype, going forward, to be a provider of real time conversation-enabling software on desktop, web, TV and mobile platforms. To use an old telegraphy term: Full Stop! For instance, rather than developing their own social network, we should expect Skype to seek out agreements with other social network service providers, such as the MySpace agreement. Skype is an enabler of real time conversations; it is not in the community building or social networking business. Facebook, Twitter and MySpace, amongst others have already captured that space and done an excellent job at it.
• These benchmarks also provide a basis not only for deciding what product offerings Skype will develop but also when they are in a position to release a product.

The new Skype executive team is finally starting to set some benchmarks and guidelines against which we can not only measure executed performance but also have a better understanding of where Skype wants to go.

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Skype at CES 2009, Part II: An Overview and Observations

There's a "new sheriff in town" when it come to running Skype; CES 2009 was a "coming out" event for the new executive team.

CES 2009 provided an opportunity to catch up personally with many of the vendors we have covered in Skype Journal including Skype, Truphone, SlingMedia, Philips and Research in Motion (BlackBerry). I also had a chance to attend a most informative afternoon session of Jeff Pulver's Social Meia Jungle event. Unfortunately Palm closed their suite after only two days of CES; thus, I missed an opportunity to learn more about the Palm Pre on Saturday. As Palm had just been awarded a CES "Best of Show" award, that was a "Huh?" moment when there was only a security guard at the suite's door.. I also wanted to catch iPevo and Nokia but did not have time to get to their booths.

With respect to Skype we had three activities: the Skype press conference, an interview with new COO Scott Durschlag and Skype's first reception event Friday evening. It was our first opportunity to observe the new Skype executive team in action. While I will be providing some more detailed posts, here are a few observations:

• For the first time, a senior C-level Skype executive personally acknowledged Skype Journal's participation as a playing a significant role in the Skype ecosystem. Scott thanked us for our loyalty to Skype through all the challenges of the past two years. (That does not mean we'll always be cheerleaders; it's important that we maintain a skeptical and critical viewpoint within the context of the overall IP-based communications space.)

While we have had co-operation in the past, usually via Skype's public relations agency, from many Skype employees at an operating level, it's important for the media to be able to communicate regularly and openly with those at the C-level who are providing overall direction and developing high level strategy. Josh has initiated such openness through his blogging and interviews; now we are seeing it on a person-to-person basis.

• On the other hand many times, last week in both the press conference and our discussions, Scott acknowledged the existence of several previous controversial issues, such as technical support, platform development, the role of partners and internal management structure issues as requiring attention by the new management team. The newly recruited management team will be introducing a new level of experience and maturity to address these issues; execution over the next few months now becomes critical.
• One future post will cover Skype's new operating and management structure focused on products and geographical markets.
• Another will cover Skype's overall focus as a software platform developer and the standards being set for these developments. Within this context I'll provide my perspective on what is meant by "liquid communications".
• We'll soon have a follow up post about our discussion with Scott of what Skype's new executive team learned from the TOM-Skype privacy breach last fall and how it became a bonding exercise within Skype as well as establishing some new operating parameters to avoid a repeat.
• Skype is NOT shoving its partners under the bus. The new executive team is determining what innovation Skype will drive and what innovation they can expect partners to drive. Andy Abramson articulates his perspective on the issue:

Most of all, Skype is not sitting back. The are pushing the envelope, but at the same time sending mixed messages externally to partners and developers. But that too will change. Some recent hires have brought maturity to the table.

• We learned the answer to "Will There Be a Skype Client on the iPhone?"
• Finally, for the first time since I have been writing about Skype, we can see some well-articulated high level vision for where Skype is heading, where they need to focus and how they want to play in the real time communications market space at a strategic level.

Looking forward to writing about the evolution of Skype as it grows from a $500MM per year operation with 500 employees into a business with a revenue level and valuation that finally justifies eBay's initial investment in Skype.

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Post-CES blues: Cash crisis shifts power in the consumer electronics supply chain

This is the worst CES in decades, according to some who've been exhibiting that long. Vast sections of the floor were unsold. You could walk without getting crushed. There were few traffic jams. Shorter lines for food. And easy parking. Attendance was down. Those who came left early and spent less.

So I'm looking at all these exhibiting factories, brand name manufacturers, wholesalers, and the retailers shopping for products to put into their sales pipeline.

The retailers are playing it safe, cutting back on the number of SKUs and how much they're ordering. The ones they're buying from are over capacity and starved for cash. That's bad during a credit crisis.

Strapped manufacturers can't count on loans they once got to afford the months of delay between order and payment. Some are giving up equity for working capital. Others are paying higher rates with harsh terms.

Say you're Wal-Mart, sitting on billions in cash. How many of your suppliers will run out of cash before delivering product? Or will be unable to replenish your inventory when their products sell well? You will start to demand cash flow statements from your suppliers. Favored suppliers may get better terms like faster payment or less agonizing returns policies. You may even offer select suppliers bridge or inventory financing loans.

In the post-credit era, those with cash are kings.

Maybe you're Skype. You have hardware partners who make phones with Skype embedded or pre-loaded, webcams and headphones that bundle Skype. Firms like Vosky that build telecom gateways. What can you do in this environment to support those suppliers?

Low hanging fruit:

• Suspend your five-percent-of-retail logo license fee, cut it dramatically, or rebate it through a cooperative advertising program. I talked to name brand headset and webcam vendors who dropped out of the Skype co-brand program because five percent of retail income (10-20% of wholesale) doesn't pay.
• Help manufacturers of high-end gear craft value offerings that still exploit Skype's high quality audio and video.
• Bring gear partners together for joint marketing to retailers. Skype's Wal-Mart model is one approach.
• Share in-depth market research and consumer behavior insights so designers can make products Skype users will buy.
• Remodel your online store and create a process for ongoing innovation in driving the right Skype users at the right time to the right products. Perhaps even making the store more social. And don't forget the department for Skype at Work buyers.

CES 2009 is over. Taxi rides and shoe shines are half of CES 2008. Liquidity trumps innovation in 2009 as sectors consolidate and power changes hands in consumer electronics.

Technorati tags: skype, ces, ces09, wal-mart, walmart, channels, distribution, alliances

Gartner to enterprises: Manage Skype, don’t ban it

Gartner analyst Lawrence Orans today revised Gartner’s view enterprises should block Skype. Benefits now outweigh risks, costs. So enterprises should manage Skype deployment, standardize builds, and measure support costs. Watch Skype Journal for columns on how.

Technorati tags: skype, gartner

Skype throws independent developers under the bus to pursue WebEx market

Skype for Mac 2.8's new screen sharing feature signals Skype's move into the web conferencing and video conferencing space led by WebEx. Skype is also building screen sharing features for Windows and Linux clients.

Skype's bundling free screen sharing into Skype's software will popularize the feature to hundreds of millions of people. This makes the market for online conferencing bigger.

The bundling will also kill the freemium business model (try our free version, upgrade to our posh version) conferencing companies use to get customers. This will hurt the following Skype developers directly:

• Yugma 
• Mikogo
• Oneeko
• RemoteCall
• InnerPass
• Persony
• InstaColl
• Gogrok
• IBM Lotus Sametime Unyte
• Convenos
• 800Meet

Back in mid-2005, Bill Campbell asked "Does Skype eat its children?" when Skype competed with presence developers with Skypeweb. Those developers abandoned Skype. Since then Skype competed with video developers, who've abandoned Skype. And with Outlook integration developers. And with Salesforce integration developers. And with mobile developers.

Skype's ecosystem is littered with the bleached bones of third-party software developers. They filled gaps in Skype's product line. They made Skype's network more valuable. They bet their jobs on Skype's partner program being safe from Skype itself.

Clearly, a bad bet.

Skype desktop sharing will be wildly successful. Building it into Skype clients and putting it one or two clicks to add sharing to a call makes it 10 to 100 times more convenient than other systems. Ubiquity will change the way people think about desktop sharing the way ubiquity is changing how people think about video calling.

WebEx-style meeting, sales, training, tech-support, and webinar services comprise a multibillion dollar industry. Skype desktop sharing will be disruptive to the industry: vastly cheaper, more convenient, more social. We'll hunt for market share stats this year.

So while this announcement is great for Skype, the choice will chill investment by software development partners. Platforms must be safe, trusted, with manageable risk. And platforms must foster creativity, innovation, and opportunity.

Skype's choice subverts developer trust. That's one hell of a brand note.

tags: devrels, developers, developer relations, skype, desktop sharing, video, yugma, mikogo, oneeko, remotecall, innerpass, persony, instacoll, gogrok, ibm, lotus, macworld09, mw09, sametime, unyte, convenos, 800meet, partnering, channels

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The AdultFriendFinder freemium case study

Skype Journal covered Skype's freemium business model this year. Now Andrew Chen pulls together fresh freemium business and funnel metrics from FriendFinder Networks' IPO filing with the US SEC. FFN runs AdultFriendFinder.com (nsfw), Penthouse, and niche dating/social sites. It's another data point when you want to compare freemium rates.

Skype Video Greeting Card on Facebook

I wrote about the Skype video holiday greeting cards last week. I whined that the promotion failed to use Skype.

Matt Rhodes of Community 2.0 has a positive take as Skype launches video cards in Facebook. The Skype video card application in Facebook works the same as the standalone site, but you address cards to your facebook friends instead of email addresses.

Matt thinks this is great.

Rather than trying to integrate their actual product and develop an application that people will use and forward to their friends. Instead they opted for the solution of creating an application that creates real value for the users (especially those who have forgotten to send holiday greetings already) and allows the Skype brand to be associated with this.

I agree.

UPDATE: Happy Christmas from We Are Social, a greeting from the outside marketing firm that made the greeting card promotion, targeting “US, UK, Italy, Spain and the Netherlands.”

Technorati tags: video, skype, facebook, community, advertising, marketing, promotions, holiday, greeting, card

Joost drops desktops, moves to browsers

Joost’s experiment in p2p video distribution is over. Technology is secondary to user experience and enterprise flexibility. Joost.com took over from the Joost software client today. This increases Joost’s market reach, shortens release cycles, and slashes a user’s adoption costs (no downloads).

I’m not saying this approach would work for Skype (whose founders invested in Joost) but this gives some insight into the tradeoffs product architects consider.

Back to Joost, Christian Andersen wonders how Joost will be better than or different from other video sites like Hulu.

Technorati tags: skype, joost, architecture, technology, design

Voxeo Grows Again: Voice Objects Acquisition Adds a Third Layer of Developer Resources

Over the past ten years Orlando, FL-based Voxeo Corporation has grown to become one of the largest hosts of enterprise Interactive Voice Response ("IVR") applications, building not only tools for developing and hosting these applications but also a track record of twenty profitable quarters as a self-financed private company.Historically Voxeo has provided, at no charge, resources for C++/Java and Web Developers to produce customized IVR applications that are then hosted at their network operations center. Their developer community has grown to over 31,000 participants. As their expertise has grown they have also developed their licensable Prophecy SIP platform for those enterprises that wish to host their own services using Voxeo's tools.

Today Voxeo announced an expansion their development expertise, technology base and user community through the acquisition of Germany-based Voice Objects.

While acquiring ownership of Voice Objects' technology assets, Voxeo CEO Jonathan Taylor emphasized in an interview with me yesterday that Voxeo's first reason for making an acquisition is to acquire the expertise and professionalism of the employees. Contrary to the popular perception of making an acquisition and focusing on the technology assets, Voxeo looks for team players who can fit into Voxeo's culture and then look at the technology synergies.

As a bonus the Voice Objects acquisition brings to the table as customers a new layer of developers; namely those who routinely develop "self-service" applications for service providers and enterprises as a full time occupation. Jonathan described Voxeo's current developer resources as having two layers: API-based telephony libraries favored by C++/Java "low level" developers and XML-based telephony languages using Voxeo's proprietary but simplified CallXML as well as other XML standards for web developers. The acquisition of Voice Ojbects introduces a higher level of object-based telephony tools, employing drag-and-drop and visual rapid development techniques.

Whereas Voxeo's legacy tools facilitated people-to-people connections, Voice Ojbects' toolkits facilitate the development of "self-service" applications where no human is involved in delivering or provisioning enterprise or carrier-based services. It is multimodal in that not only is voice involved but also SMS messaging and video can be brought into the application where appropriate. For example, T-Mobile Czech can easily program changes into their self-service applications reducing development times by an order of magnitude while dynamically addressing market needs.

Taylor described Voice Objects' toolkits as having three major components: a rich development environment, unified self-service middleware - that connects customer information within an enterprise with customers who desire access to this information via voice, SMS or other modes - and, finally, extensive analytics. The analytics component gathers real customer usage data and provides justification for making application modifications based on user experiences as well as changing local market conditions. To quote Jonathan: "Business owners don't want to build a bad experience; however, it is challenging and difficult to build applications that work well for customers."

In closing our interview, Taylor mentioned that Voxeo, recognizing that the best way to recruit talent is through acquisitions of this nature, will be looking at three or four similar acquisitions in 2009 building up a team of "great people who understand the industry well".

The acquisition of Voice Objects will not change Voxeo's business model of making their developer resources available at no charge while charging either for hosting of applications or for platform licenses sold to enterprises that wish to host their own applications.

It appears that Voxeo continues to set a benchmark for operating a sustainably profitable business in the Voice 2.0 world. On a broader scale Jonathan has provided an overview of the various levels of developer segmentation and classes of tools available on the market today for creating Voice 2.0 applications.

Other posts on this acquistion:

• Vox Populi "Best Freaking Voice Platform on the Market".
• Dan York at Voxeo: What the Voice Objects Acquistion by Voxeo means for voice applications developers.
• Michael Dinan, TMCNet: Voxeo Acquires VoiceObjects, Expands Cost-Saving IVR Solutions
• Andy Abramson, VoIP Watch: What's New In VoIP? Lots with Gizmo, Voxeo and Fonality

Tags: Voxeo, Voice Objects. Jonathan Taylor, acquisitions

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Dryburgh 101: Attention is the post-telecom minute

Lee Dryburgh, mister Emerging Communications Conference, gave a great dinner speech last month. Lee's blogging his talk, leaving out the bawdy bits. Three highlights...

Attention scarcity is overcoming carrier scarcity. Phone companies deliver interruptions. This doesn't work when your time, attention, and concentration are valuable. So... 

Power is shifting from caller to callee. Power tools, rich with context sentience, are emerging from our primordial voicemail and caller ID services. Like social secretaries, these tools assess relevance from the callee's view. One effect is...

Multimodal replaces voice-only communication. Because every conversation needs a different blend of media, tailored to the people, the subject, and the environment.

Lee speaks to the growing irrelevance of phone companies.

Read the whole thing.

tags: skype, ecomm09, telecom

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Motley Fool Discusses The 2012 Annual Report of SkypePal Inc.

The Motley Fool has become a popular and widely respected investment community site since the origins of the commercial Internet in the mid-90's with the objective of helping people take control of their financial lives. It has evolved into a multi-media financial services operation; they have free and premium services; suggest portfolios and try to pick recommendations, host discussion forums amongst other activities. "The company's name was taken from Shakespeare, whose wise fools both instructed, amused, and could speak the truth to the king -- without getting their head cut off."

In a post yesterday about "5 Free Internet Winners" they discuss the five biggest winners if free WiFi comes to pass as a result of anticipated rules for forthcoming spectrum auctions in the U.S. Google, Logitech, Amazon, Nintendo and "eBay | SkypePal" are the selections. Why SkypePal?

Forget eBay.com itself. By the time free access hits the masses, PayPal and perhaps even Skype will be bigger parts of this portfolio of verbs. Heck, even the name eBay may be toast as you crack open the 2012 annual report of SkypePal Incorporated.

Skype and PayPal will be the biggest winners of blanketed coverage. Skype remains the global voice chat leader with 370 million users worldwide. If you don't think that Skype will replace a few landline telephone accounts once connectivity is pervasive, you may as well Skype me to tell me otherwise.

PayPal is already the leader in micro-payments. It will become an even bigger force in real world transactions under Martin's scenario of access for all.

Certainly an opinion contary to all those thinking that eBay is about to run out and sell Skype. And it reinforces my long held opinion that the new executive team has one primary goal - to drive up the value of Skype to the point where eBay can not only fully recover its over $3B total acquisition cost of Skype but also provide a reasonable return, whether as an ongoing operation or through an exit involving a sale or IPO. Motley Fool goes further and feels that Skype will become one of the primary value drivers of eBay shares going forward, given that eBay's online operation is struggling to find new ways to grow.

As for more reliable indicators of Skype's current growth than Skype's published number of accounts (not subscribers, not users), check out the peak number of users daily shown in the Skype client, Jean Mercier's note on the tripling of Skype downloads and Hudson Barton's "Real" User tracking showing that Skype is has returned to a growth rate comparable to its 2006 rate.

But in the background the new executive team has been working on the restructuring discussed in Skype Journal's interview with Skype President Josh Silverman. In a recent "Home Improvement" post, Josh gave an update on the the efforts required to "right the ship":

Excited as we are about bringing new colleagues aboard, there’s more to reorganizing our structure for continued growth. Back in the summer, we set out to be smart about it. And transparent. And fair.

Which is why we held numerous workshops to gain input from the team on how our structure and ways of working need to change. Change that we hope will lead to sustained growth, better products and an even more empowering work life at Skype. One of the things we’re doing is to create smaller “companies” within the company: consumer-, business-, mobility-, and developer-focused business units vaccinated against shackles that curb innovation and risk-taking. Each new business unit is designed to emulate the feel of a start-up and to cultivate a deeper sense of ownership.

This is just a low-resolution snapshot from what’s a continual journey of change. There’s much more to it, of course. Replotting our roles, responsibilities and accountability takes time. While we think that we’ve done most things right, some won’t come through as intended. Tweaking them for a few months should make life at Skype work well for everybody.

And he concludes with:

Our structural rethink isn’t about change for change’s sake. From day one, everything at Skype has boiled down to delighting the customer. With a bit of home improvement to support further growth and innovation, we’re just making sure it stays that way.

At least Motley Fool and the Skype executive team are in sync with respect to the primary goal at Skype. The next few months and the subtle indications of forthcoming new product and service announcements will tell if the foundation is being built to achieve these goals. From restructuring will now come the challenge of execution.

Tags: Motley Fool, eBay, Skype, PayPal, Josh Silverman

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Collective Presence Helps Nomads Do The Right Things

Dell wanted to know about "Keeping Productivity High For On The Go Workers" for their Digital Nomads site. Here's my small contribution to the theme.

Presence is a stream of signals you give off. You've seen simple availability presence signals in instant messaging: I'm online, I'm offline, Do Not Disturb. Some of us lifestream what we're doing during the day: I'm in this meeting, I'm catching up on email, I'm making soup. We also give off contextual presence signals: I'm available for lunch on Tuesday if you're a recruiter, my dream date, or someone I know.

Disclosure like this feels strange. At first. And then something unusual happens. We get used to it. It starts to feel familiar. Like being in an open plan office where you overhear small talk, see people come and go. Or having a break room where you catch up with people a little bit here and there.

And then presence becomes useful.

People use our signals. Strangers decide if they should introduce themselves. Colleagues decide when they should interrupt, and for what. And that makes your life better, because the people around you are making better choices about when and how to engage with you.

We use many tools to broadcast our presence. Twitter, blogs, public calendars, job sites, project status systems, IM mood messages. Even simple things like IM and email. So long as the people in your world can easily see your presence and update their own, tool choices don't matter too much.

Presence is a social interaction. You share yours. You consume others'. And through this, you get to know each other in ways that may be more intimate and current than if you were in the same physical office.

Collective presence is what it sounds like. A stream or a place where you can see what a group of people are doing. Where you aggregate your group's presence signals.

Collective presence is a mix of informal, unstructured, casual talk and structured messages. The Europeans in our team are coming online now. The programmers are working through a pre-release checklist. Someone's dealing with a problem today.

Members of a team experience this collective presence through group chats, like IRC's or Skype's persistent chat rooms, or a listserv. At Skype Journal, we augment group chats with RSS aggregators and other software that pull in team member blogs, twitter updates, public calendars, public bookmarks, new photos and illustrations. So all through the day we keep in touch.

Three payoffs:

First, social media and presence tools sustain bonds that help a team know and trust each other.

Second, collective presence cultivates situational awareness. So people make better choices about what is important, what is urgent and what needs resources.

Third, collective presence means you are not alone. When those feelings of isolation kick in, it's easy to drop into the group chat and see what everyone's been up to.

The essence of productivity is choosing the right things to do and doing them. Collective presence makes remote team productivity easier and more immediate.

My toolkit:

• Skype public chats, Skype contact groups
• iGoogle and Google Reader (aggregating news and blog feeds)
• twitter, TwitterBar (so I can post from Firefox), TweetDeck (aggregating tweets), Twype (putting my latest twitter into my Skype mood),
• Yahoo!'s flickr (images), delicious (bookmarks), upcoming (events)
• Google Groups for email lists

See also: Presence evolving, Skype Journal, September 2007. Describes Collective presence, Faceted presence, Presence attributes and dimensions, Presence federation, Presence prediction.

tags: Collective presence, Faceted presence, Presence attributes and dimensions, Presence federation, Presence prediction, presence, skypeweb, social software, social media, collaboration, productivity, work, telework, distance, twype, twitter, twitterbar, tweetdeck

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Brand Value: Skype, iPhone, Google

I took a look at The Brand Bubble's BrandAsset Valuator (BAV), "the world's largest database of brand perceptions." Market research data visualization from Young & Rubicam Group.

This valuator compares four attributes: brand strength through differentiation and relevance, brand stature through esteem and knowledge.

Here's how they define the terms:

• D. Energized Differentiation. A brand's unique meaning, with motion and direction. Relates to margins and cultural currency.
• R. Relevance. How important the brand is to you. Relates to consideration and trial.
• E. Esteem. How you regard the brand. Relates to perceptions of quality and loyalty.
• K. Knowledge. An intimate understanding of the brand. Relates to awareness and consumer experience.

So I compared three global brands we know and love: Skype, the Apple iPhone, and Google.

You can see they each score well on Energized Differentiation. There's nothing else like Skype, iPhone, or Google.

Skype and iPhone are both much less relevant to the average consumer than Google. Google is well understood and used by many more people.

Esteem and Knowledge both show a similar pattern: the brands with more experience and time have more stature in the minds of consumers. 

The BAV compares strength to stature in the next chart. You want to be in the upper-right quadrant with Google and eBay.

Skype is moderate strength, low stature. So while Skype is defining its unique value proposition well, people don't feel they know or respect it. That will come with education, hands on, and time.

What three things should consumers learn about Skype in 2009? What can Skype do with its product strategy to move from the upper left to the upper right?

tags: skype, branding, brand, marketing, esteem, knowledge, relevance

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Interview with Julien Decot of Skype

Christopher Smith of Relevantly Speaking interviewed Julien Decot, Director of Strategy for Skype, at the >play Conference last week. Rough transcript follows, emphasis mine.

Q. Hey, it's Christopher Smith here for Relevantly Speaking. We're in Berkeley at the Haas School of Business. We're at the play conference and we're talking with Julian from Skype.

You've got a really enviable position there at Skype. you're a director of strategy, which means you have the ability to see the future, move the company into particular directions. Where are you going right now?

JD. The beauty of working for Skype is the breadth of opportunities you look at is very very wide. I'll give you a few examples. Skype could get into SMBs or enterprise. Skype could move more aggressively into mobile. Skype could get into the web. So there's a flurry of opportunities. And my job is to navigate the ones we should go after first knowing we're only a 500 [person] company.

So a few things that says...

One is: mobility is a big deal for us. There's tremendous appetite from our users to use Skype on the mobile. We don't want just to take the experience on the desktop into mobile. We want to invent something that's very unique to mobile and complements the desktop really nicely.

And also we think, even if it doesn't sound super sexy, just improving the basics of the service making it into the next level is a big deal for us. The best example is video calling in high def for everyone. We think that's really exciting, for example, and we're working very hard at this.

Q. You just released a desktop device to assist in that.

JD. We work with ASUS as a partner. They built the first Skype specific video phone, for example, which allows you, for I think it's a $200 device in the US, to get very simple video calling capabilities from your home without having a computer or anything else. That's one example of things we think are pretty cool.

About Google Video

Q. Last week Google comes out with Gmail Chat and Video in there. Do you find yourself in a defensible position there? Do you think Skype already has a very significant head start?

JD. Every time Google enters a space you have to watch out. They're big and they're very good and they innovate really fast. First thing I'll say we're not very surprised, that's something we've been expecting for a while. We're surprised it took so long.

We think it's a good product, we think the quality is good, it's not great, it's good, a nice implementation.

We think it also validates our idea that video is a big deal. And it's so early that everyone who can come with us and sort of help evangelize the fact that video calling is free for everyone and that it works is good.

Of course it's going to force us to get better and better, but I wouldn't say it's going to change our course. we're going to watch them. That's a company we have a lot of respect for in general.

Search

Q. Discoverability seems to be a common theme in a lot of the conferences we've been attending, the problem of finding both people or audiences for content. How are you guys approaching that problem?

JD. That's a very big question. It totally depends on what you're looking for, if you're looking for content or people.

We spend a lot of time helping you find people. it's a big deal for us to find someone you can communicate with. And linking people is a big deal for us because we're in the communication business.

Finding content is not our business. We'll definitely leverage third parties to do it. We'll let third parties get into Skype, to allow this to happen. We have for example the ability to attach a video mood message to your profile. So we worked with partners; you can attach a video to your message and if I'm connected to you I can click on that video and watch a video clip. That's the kind of thing we're going to do but it's mostly about driving and triggering conversation.

Future?

Q. So looking around the corner what should I anticipate from Skype?

JD. Great mobile applications, across platforms. I don't want to announce anything but look around all the key platforms are coming up. We'll be on there very soon with something pretty radical I think.

Expect the video and voice quality to improve significantly. So expect very very awesome video quality very very soon. And expect a few surprises. If you're a Mac user you'll have a few surprises pretty soon.

Q. Any announcements about the Apple platform?

JD. Come to MacWorld and you'll know more.

See also:

• ASUS PC-free Skype desk videophone, coming October, Skype Journal, September 2008.
• Hands On: ASUS's AiGuru SV1 Grandma-Friendly Skype Videophone, Gizmodo, September 2008.
• GMail Voice and Video Chat: Threading Voice and Video Into Email Dialogues, Skype Journal, November 2008
• Blogger interviews Julien Decot, Skype's director of strategy, Skype Journal, August 2008

tags: skype, trends, strategy, juliendecot, bizdev

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Tencent's QQ: 45 Million Simultaneous Online

Tencent Holdings (SEHK 700), one of Skype's biggest competitors, had a great quarter. From their 2008Q3 financial release (pdf):

• 856.2 million: Total registered Instant Messaging (“IM”) user accounts, 4.1% growth QoQ [quarter over quarter]
• 355.1 million: Active IM user accounts, +3.9% QoQ
• 45.3 million: Peak simultaneous online user accounts for IM services recorded, +7.9% QoQ
  
• 4.4 million: Peak simultaneous online user accounts of QQ Game portal (for mini casual games only), +11.2% QoQ
• 30.3 million: Internet paying subscriptions, +16.1% QoQ
• 14.8 million: Mobile paying subscriptions, +10.4% QoQ

More people actively use QQ instant messaging than live in the United States and Canada [Tencent defines "active" as logging in to an account in the last 30 days of the quarter].

QQ IM has 3 simultaneous users online for every Skype user online.

Skype has 370 million user accounts, does not report active users but estimates vary from 36 to 85 million people, and peak simultaneous is around 14.5 million.

Skype report minutes, when Tencent does not. Live voice and video calls. Ten billion minutes served in June 2005 (before eBay bought them). 100 billion minutes served as of February 2008. 18 billion minutes a quarter as of 2008-Q3.

Mini-SWOT

QQ has a few strengths.

• No QQ-In or QQ-Out. Regulations forbid connecting to the public telephone network. So Tencent focused their resources to create online communities, content, and games that both trigger talk and make money. QQ commerce is so hot QQ has one of the world's largest virtual currencies.
• Multiple OS clients. Windows. Windows Mobile. Mac beta. Browser. Linux. 
• Age and Incumbency. QQ celebrates their 10th year of service. Skype is only five years' old. Brand awareness and loyalty build with time and experience. QQ has effectively built IM dial-tone (confidence that people will be available through the network) and network lock-in for its customers.
• Monolingual, Monolithic. QQ only needs to support Chinese. So it's easier for people to find other people with similar interests. Spoken Chinese languages pose a linguistic barrier, but not too much since Mandarin is a common second language. 

Weaknesses.

• Sub-Global reach. Skype has to build markets in each country, in every language community. This makes it harder to localize software and web sites, provide customer service and tech support, and talk with a community; the time and costs pose a barrier to entry. Once localized, Skype has an advantage over entrants. QQ isn't even trying to serve non-Chinese cultures.
• No PSTN or mobile voice integration. No income. No new points for the company to learn.
• Platform 1.0. Like most IM providers, QQ offers a simple messaging API. A handful of third-party clients offer alternatives to QQ's own clients. However Tencent lacks a platform strategy, building foundations for third-party partnerships beyond IM clients.

Opportunities.

• Markets: India. Chinese Diaspora.
• Features: Voice/Video/Conferencing.
• Business: Alliances with Indian and western portal/IM companies

Threats.

• TOM-Skype joint venture. Working inside China to spread Skype's brand.
• Premium quality audio and video, a qualitatively different experience.
• The four national Chinese telcos who may enter the market and who restrict PSTN access.

tags: skype, im, voim, tencent, qq, china

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Weekend reading

What Can Skype Do For Graduate Students? on the The Graduate Student Survival Blog. Save money is the first concern. I chipped in ten more things grad students can do with Skype: #10: Robots.

The Skype survival guide by David Tang of VoSKY Technologies makes the case for Skype trunking, adding Skype gateways to PBXs. 987 Hotels (Prague, Barcelona) uses VoSKY's 9040 Exchange gateway. 

Is Our Internet Future in Danger? InfoWorld's Gruman and Kaneshige say it is, that demand for video is quickly outstripping the world supply of bandwidth. Doc Searls urges America to go Forward with Fiber: An Infrastructure Investment Plan for the New Administration. Doc makes a strong case that we can expand capacity far beyond

Korea's Cyworld virtual community gives up on North America. Culture barriers.

Google Reader Implements Feed Translation. Brilliant. Can't believe Skype still has not built in IM translation like Don Kennedy's Universal Language Real-Time Message Translator. Moka is jumping into this space with its own Moka Chat Skype Plug-in.

Super Mario Galaxy is absolutely brilliant writes Jaanus Kase.

Wish for Skype on Please Fix the iPhone.

Mail-order brides on Skype. hmm.

tags: skype, education, vosky, fiber, bandwidth, cyworld, korea, google, iphone, apple

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Skype's Freemium Rate (free/fee) is flat

Local fluctuations are less interesting than the range.

I applied several curve fits to Skype's freemium ratio but nothing reliable came of it. I don't imagine it is predictive of anything, merely descriptive. 

The wobbliness[1] of Skype's freemium ratio is, obviously, a function of variations in the supporting data. Eyeballing it, free activity leads fee by a few months. This makes sense if free experiences are preparatory behavior to greater commitment.

At a larger chart scale, like 1-100, the world of percentages, the curve would look amazingly flat. Many freemium businesses would interpret a ratio in Skype's 7-8 range as golden.

tags: skype, metrics, stats, statistics, free, freemium

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[1] I did love Professor Magaddino's econometrics classes, but wobbly suggests so much more than the proper language of statistics.

Skype's P2P architecture supports freemium

Skype can give away free video calling because customers pay for all the expensive marginal costs.

• With every account, Skype hosts account creation, account backup, and presence service on their servers. These are very lightweight, low cost services but they grow linearly with the user population.
• Skype also provides technical support, customer service, security and R&D, spread across all users, fee and free. The costs of these services grow slower than the user population.
• Skype's customers pay for their own microphones, cameras, computing, and P2P connectivity. So while this is a linear marginal cost, Skype doesn't pay.

Contrast this with Yahoo!, Microsoft, SightSpeed and other VoIM providers. They have Skype's fixed costs and more. They pipe all talk through hosted servers. So every additional free user requires them to pay for more server capacity, bandwidth, and server farm management.

Skype doesn't pay when customers

• speak more often
• to more people
• for longer times
• through more bandwidth-consuming media.

P2P's low marginal cost helps Skype scale and tweak their freemium rate.

tags: skype, p2p, architecture, free, freemium, business, yahoo, microsoft, sightspeed, voim

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Measuring Freemium with Minutes is easier than with Money

Hudson asked me about using minutes instead of dollars and the trend of the Freemium Rate I described Monday.

Comparing apples to apples, minutes-talked is the only data I have on both sides of the free/fee equation.

Money as a measure is useful. It leads us to the lifetime value of a customer. How can we measure free in dollars?

We might value the free minutes at some averaged rate and compare that to Skype's overall revenue.

Skype earns money from licensing its brand, the rental of SkypeIn phone numbers, from its online store, ads in Skype’s yellow page directory services. Sadly, I don’t have access to revenue data broken out by source.

We might include costs with dollars, seeking profitability or net value of customers. Costs for fee-based services are higher (transaction costs, higher security, admin, sales costs, customer service, technical support, business development) than for free. 

Meanwhile, we have customer behavior in the form of minutes. And the simple freemium rate comparing free to fee. It will suffice.

tags: skype, freemium, metrics, business, strategy, free, skypeout, directory, yp, yellowpages, skypein, revenue, costs

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Skype is tweaking the freemium model

Following up Monday's post about the Freemium Rate, Hudson Barton wrote "in a normal 'freemium' relationship, it is the higher valued services that have a fee attached to them."

Most freemium services offer free but limp, shallow versions of their paid products. I show that on the chart below by the boxed "0" (free, few features) and the upgrade path to the boxed "$" (high cost, more features).

In Skype's case, that's not how it works. SkypeOut users call a voice line and pay for it by the minute or with a subscription. Skype-to-Skype users get free multi-modal talk (persistent IM, voice, video), file transfers, voice conferencing, public chats, audio fidelity far better than mobiles and landlines.

So Skype is making the free experience rich and sophisticated and full. On the chart, users start in the bottom-right quadrant (free, full features) and ADD SkypeOut (costs, simple features).

Skype has a pricing advantage in their freemium model. A year's national SkypeOut subscription can cost less than 10% of what people spend on land lines. So even Skype's premium charges are cheaper than many alternatives.

tags: skype, freemium, business, strategy, free, skypeout

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Two more reasons why SightSpeed is good for Logitech

Video cameras are being built into everything. Phones, monitors and nearly every new laptop. Logitech buying SightSpeed marks the end of the generic webcam add-on market, as Jim Courtney wrote up yesterday. Or the beginning of the end, at least.

Logitech can sell its high-end webcam technology to laptop and mobile OEMs like Dell, HP, Lenovo, Acer, Asus and Nokia, Samsung, Sony Ericson, Motorola, Qualcomm.

Logitech Video Inside. With Carl Zeiss Optics. With SightSpeed MultiParty Video. And Skype High Quality Video.

SightSpeed's white-label distribution has been effective, accounting for many more users than its own brand. Logitech could very well become a Dolby Labs for personal video, licensing the best quality video features, and de facto standards for video, to the world's devices.

Logitech wants freemium marketing power. Free video calling entices newbies who pay later for multiparty, higher quality experiences. This is a branding and customer relationship program that could spill over to Logitech's hardware products. It may also be Logitech's strongest relationship with end consumers since most of Logitech's sales go through resellers. SightSpeed's own revenue stream is a nice bonus to the strategic value of direct customer relationships.

A larger theme is synergy between realtime social networks and devices. Skype and Skypephones. Twitter and mobiles. Gtalk and Android. And now SightSpeed and Logitech.

tags: skype, logitech, sitespeed, dell, video, hp, lenovo, acer, asus, nokia, samsung, sony, ericson, motorola, qualcomm, optics, dolby, freemium

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Skype and the Freemium Rate (free/fee)

So here’s a little chart for you. Billions of Skype minutes served (left axis). Light blue bars are free Skype-to-Skype minutes. Dark blue bars (at the bottom) are SkypeOut minutes, paid for.

The curvy line at the top is the ratio between the free and fee. It has been hovering between 7 and 8.5 (right axis) for years. I’m calling it the freemium rate.

This is astonishing for being low (a good thing) and for its constancy. Other companies are lucky to get one-in-twenty or one in one hundred.  

Skype’s project to make user experiences more convenient should boost all talk activity. Skype for Windows 4 is smoothing the customer journey from first download to routine calling.

tags: skype, trends, charts, statistics, stats, freemium, business models, conversion, rates, behavior, revenue, minutes, billions

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Wednesday Reading

Staffing

I didn't make Obama's short list for U.S. CTO. Darn.

Teachers interview for jobs via Skype video.

Family

ReadWriteWeb summarizes a study from the Pew Internet & American Life Project:  

"Simply put, technology may bring us closer, but, as this study shows, its constant use also means that we may be sacrificing other activities in order to fit it into our schedule. It really is both a blessing and a curse in many ways." - Sarah Perez

Design

James Kendrick dives deep into deaf users and text messaging. Text 4 Deaf serves this community.

Freedom

Skype could license Microsoft's patent on real-time speech censorship to improve the quality of filtering and monitoring in the TOM-Skype client.

UAE regulator reconsidering ban of Skype and Internet calls by year's end.

Economy

Fareed Zakaria's Question of the Week: "How long do you think this economic downturn will last? Some economists predict 1 yr; others say 4. And you? Email us at FareedZakariaGPS@cnn.com".

Competition

Mobilkom austria fights the 3 Skypephone with a Fring phone. News release in German.

Nomad Life

Anywwwhere Internet Café Services features Skype calling.

Deal

DLink DPH50U Skype Phone Adapter - $14 Shipped from Amazon.

Skype for Barack Obama

Local phone bank host invites you to bring your laptop and Skype.

Corner Pocket

Performance Pool Cyber League. Shoot from home over Skype video.

Touch Skype

Asus Eee Top one-finger touch PC. Hot boots with Skype.

What businesses prosper in harsh times?

Who prospered in the great depression? There were three strategies:

Businesses that helped you survive tough times. 

Five and Dimes, buy/sell stores (pawn shops, used clothing, thrift shops) and other local retail.

Repair shops (shoes, tailors/seamstresses, furniture) extending the life of what you own. When shoe repair shops get busy, you know the economy is in pain.

Vegetable seed catalogs and others who helped you garden your own food. Disintermediate farmers and middlemen by using your back yard or roof garden.

Labor market-makers (employment agencies, unions, guilds, clubs) helped employers avoid long lines and people find work. Nepotism and social networks trumped formal employment processes. And political patronage became a lifeline to families that repaid jobs with votes. 

Businesses that served escapism. 

Music, movies, and booze all took off. Quality fell with prices, but you could make a healthy living in making, delivering and serving

• Music (records, sheet music, used instruments, live performance),
• Movies (theaters and the birth of Hollywood), and
• Booze (moonshine, speakeasies, juke joints).

You paid cash directly for all of these goods and services.

No advertising subsidies.

There was some bundling; music came with booze at a speakeasy or juke joint.

Hope was a product too.

Churches, tent revivals, populist politics, and activist newspapers helped people acknowledge the crushing emotional burden of new poverty. They also gave hope for a better future. 

It is easy to share bad news, harder to find a silver lining. Those who provide meaningful hope in bad times not only prosper, they shape the society that emerges.

 

Harsh, apocalyptic times trigger basic human needs for relief, survival, and optimism.

• How will you and your organization serve those needs?
• How can you redesign your company and its products to align with those values? 
• How will you revise your marketing communications, your brand identity, your conversation with suppliers and customers to fit the new realities?

Thanks to Jason Calacanis for asking "What ideas do you have for winning in a down market? How do you stay inspired in bad times?"

tags: economy, depression, apocalypt08, strategy, history

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Sequoia Capital to Companies: Think Cash Flow

I won't add much more to Om Malik's truly scary report, Inside Details of Sequoia Capital’s Doomsday Meeting With its Companies.

• Of the hundreds of companies in Skype's ecosystem (termination suppliers, API developers, embedded hardware, IP licensors, mobile, payment), which ones lack a year's cash in the bank and a positive cashflow?
• Of those at risk, can Skype help them survive the tough times?
• As markets get mean, will Skype be able to cheaply buy talent and technology from failing startups and competitors? Who could you look at?
• How fast can Skype turn Prime, Find/Directory, and Skype for Business services into revenue generators that delight and scale?

Many great little communications companies are not safe. I fully expect the dead pool to be filling up by eComm09 in March as cash flows dry up and founders call it quits.

tags: skype, sequoia, sequoia capital, doomsday, economy, cash, cashflow

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Carriers, Apps face off at OpenMobileSummit

How open is open? Skype's Jonathan Christensen will be on a panel at the OpenMobileSummit. Open access for apps to carriers is on the menu. 

I'll be there, along with folks from AT&T, Sprint Nextel, T-Mobile, Orange, Vodafone, Verizon, Google, Amazon, AOL, Yahoo!, Nokia, RIM, Qualcom, Sun, Symbian, Funambol, Mozilla, Intel, Disney, MTV.

$100 off if you register with "SKYPEJ". The $300 early bird pricing ends Friday midnight.

tags: skype, openmobilesummit, events, conference, openmobilesummit08, AT&T, Sprint Nextel, T-Mobile, Orange, Vodafone, Verizon, Google, Amazon, AOL, Yahoo!, Nokia, RIM, Qualcom, Sun, Symbian, Funambol, Mozilla, Intel, Disney, MTV

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Mobivox leaves freemium services behind

So your free users never become paying customers? What should a smart business do? Fire the freeloaders! Refocus on the profitable customers.

Mobivox did exactly that this week. After studying user behavior, data showed conversion from free-to-fee was near zero, and nothing would change that. Mobivox will devote the freed up resources to enhancing services for its commercial clients and to building up its Mobivox PL voice application platform.

Kudos to Mobivox's new management for an adult decision. 

tags: mobivox, mobivoxpl, freemium, strategy, voip, platform

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Jon Arnold: Is VoIP Dead?

TMCNet Editor Michael Dinan has reported on Jonathan Christensen's keynote two weeks ago at TMCNet's IT Expo in Los Angeles. While many of us in the Skype world have heard pieces of this story previously, Jonathan was addressing an audience of enterprise and business telephony professionals who are dealing with VoIP implementation issues.. Jonathan's basic thesis was that VoIP has become a commodity feature but the innovation starts by going beyond low cost voice conversations:

Now, Christensen said, are emerging three pillars of a generation “beyond VoIP.”
The first pillar, he said, includes different facets, including the fact that – unlike analog telephone conversations – services such as Skype are marked by an “explicit handshake model,” or agreed relationship, where both or all parties have agreed to communicate (a nice idea although this presidential election year will feature no robocalls, courtesy of Congress). Secondly, he said, there’s a new band of audio, including wideband audio, improving communications, in part, by allowing participants to distinguish among different speakers. Finally, higher resolution video makes video conferencing such as that offered by Skype, more real.

Three pillars that set the bar for fully equipped IP-based conversation services from the performance aspect.
Yesterday analyst Jon Arnold, who also attended the conference, wrote in his weekly Service Provider Views column: Is VoIP Dead?

Skype has an important message to deliver, not just for the consumer market, but for the business world too. It’s really a matter of how far ahead you’re prepared to look. While most service providers are just catching up to the realities and potential of VoIP, pioneers like Skype are way past that, and for them, VoIP is so old, it’s dead for them.

Jon goes on to point out:

The vision Jonathan paints, of course, is based in the world of IP, not TDM. VoIP can readily replicate the PSTN feature set today, but not much more. With end-to-end IP, not only can VoIP deliver an added layer of new services, and integrate seamlessly with Web services, but it can also deliver superior voice quality to what we’re experiencing today. Under these conditions, VoIP is actually a better product than TDM, and that’s where things get interesting. VoIP is still widely perceived as an inferior service, which explains why it is primarily sold on the basis of price rather than quality. Think of the possibilities for service providers when VoIP could actually be marketed as a premium service, and one that does not have to be sold as a way to lower your long-distance costs.
Well, by the time the incumbent telcos come around, Skype will be long past them. Skype has built up a sprawling international customer base that has embraced a communications platform that goes well beyond VoIP. PC-based VoIP and IM have been the backbone of their success, but Jonathan sees a richer experience emerging, and one that is much more than everyday VoIP. In the keynote, he talked about three pillars that will support this new mode of communications – presence, wideband audio and high resolution video.

And, after discussing the three pillars mentioned above, Jon concludes:

Taking all of this into account, one of Christensen’s key messages was that innovation is happening today at the network edge, not the core. Furthermore, it is not coming from the telcos, but from the disrupters from outside the voice world, such as Skype, Google and the whole Open Source movement. Telecom, as we know it, is now software, and rapidly moving into the cloud and the world of Web 2.0. In this environment, voice becomes another data application, and telcos will no longer be able to build their business around it. This means walled gardens cannot last – and this includes Skype, by the way – and the end user will ultimately define what the optimal experience is, as well as where they choose to get it from.
This is the world Skype is building its future around, and to the extent that VoIP is offered as a standalone service, it will not have much of a future here. Service providers are certainly welcome to try doing so, but in my books, the voice of tomorrow will look a lot more like what Skype is talking about today. What does it look like to you?

It's not about VoIP; it's about the potential of multi-modal IP-based conversations. Read Michael's and Jon's complete posts for more insight.

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Skype Journal Interviews Josh Silverman: The Way Ahead - Markets

This is the fifth in a series of posts resulting from an interview a week ago Friday with Josh Silverman, Skype's recently appointed President. In this post we talk about addressing the small-to-medium business market as well as various geographical markets.
Over its five years, Skype has built up, almost totally virally, a significant base of users who take advantage of Skype to not only reduce their business communications costs but also to communicate more effectively with colleagues and customers around the world. At the same time various Skype software partners have built offerings, such as Pamela, PamFax and Skylook, that either focus on Skype as a business communications tool or include Skype amongst their options for calling. Within Skype's own offerings, the Business Control Panel provides the tools for a system administrator to handle both the deployment of Skype and the administration of Skype accounts within a business's operations.
OnState is a primary example of the latter. They have built up a call center offering that takes full advantage of both instant messaging chat and voice in dealing with both inbound and outbound calls; they also take advantage of the three founders' combined over sixty years' experience participating in the call center market. Yet, they encountered many opportunities where they had to go back to Skype for assistance since, for one reason or another, Skype's program were insufficient to address business users' requirement. The result is that today OnState offers their customers "one stop shopping" whereby, on acquiring a customer, OnState takes on responsibility for addressing Skype subscription needs, hardware requirements (headsets and handsets, implementation issues and first level technical support.
The Business Control Panel has had its limitations also; the main fear has been to mitigate potential for fraudulent or unauthorized activity through transaction value and volume licensing limits.
As for geographical markets, Skype met a much larger need for communications cost reductions in Europe and Asia than in North America. As a result over 80% of Skype's revenues continue to come from outside the U.S. The two primary needs met in North America are for "Friends and Family" calling outside North America and small businesses who are working to grow internationally - both internally and with their suppliers and customers.
In growing internationally, there has been the challenge of building user bases in widely diverse markets; "free", "easy-to-install" and a whole lot of viral marketing action have introduced significant adoption around the world. But this success has led to more business-oriented challenges in working out termination agreements, establishing effective multi-currency transaction systems (although being an eBay co-unit of PayPal certainly helps), multiple language versions of software (27 at last count) and providing multi-lingual, internationally available technical support. (We'll talk about marketing and more about technical support in future posts in this series.)
We asked Josh about the Skype's approach to the business market:

JS: Skype in the business market. There's more that needs to be done. (you guys are smart, you're asking all the right questions). Platform is a huge opportunity for us; business is another big opportunity for us. About half of the communications market is business; we have a great solution, especially for small-to-medium size businesses. We haven't tailored that solution to businesses very much; we haven't communicated to businesses that we have that solution. In the new organizational design one of the pieces of that will be to build out a business unit focused on small-to-medium size businesses where we'll have some resources available to tailor our product and some sales and marketing resources to work ... I don't think that we'll be directly selling to small-to-medium size businesses but we can work with VAR's to help support them in bringing Skype to businesses.

(Note this interview occurred two weeks prior to last week's announcement of Skype for Asterisk, a program that leverages Digium's Asterisk reseller channel for sales, implementation and ongoing support requirements.)
We then moved on to ask about various geographical markets:
SJ: North America. (Thank God for Oprah!) Skype has become much more a household name this past year (with an acknowledgement to Don Albert, GM North America). What does it take to keep that business going forward in U.S. and Canada and what are the strategies for U.S. and Canada?

JS: We're very aware that the number one way to grow Skype is to build products the users love. That is our first mandate always. Once you have a product users love, we can accelerate it by some smart marketing programs. (By the way if you don't have a product that users love no amount of marketing on earth will save you, right?) So we do have a product that users love and I don't think we have done as much as we could to communicate that.
Oprah is a great example. It is not our intention and people should not expect massive multi-million dollar marketing budgets from Skype. But there are some smart tactical things we can do working together with evangelists like Oprah to build awareness. It's our belief that once you've grown awareness, people will try it; once they try it they'll love it. and the rest takes care of itself. At the Democratic national convention we were quite happy to see many of the national broadcasters using Skype as a way to expand their coverage and you should be looking for more programs like that in the United States in the year to come.

SJ: China is your biggest market?

JS: In terms of total users it's one of our top markets; the answer is yes.

SJ: QQ is still kicking butt in China? What strategy do you have in your existing partnership with Tom?

JS: We have a great partnership with Tom who knows the local market very well. Tom is also a very entrepreneurial, innovative, fast moving company. We're very pleased to be partnering with them; they're the right partner to continue building our presence in China.

SJ: Do you have your own people in Asia?

JS: A couple of people in Asia who work with our partners to make sure they're getting the support they need and also giving us real feedback from the market on what we need to be doing on [our] core platform to be able to support Asia better.

SJ: How about India?

JS: We don't have anyone working in India. We don't have a partnership in India to announce but we are seeing good growth in India but we think it's a terrific market and we are expecting to have more focus on that in 2009
My observation, five months in, [is that] markets where Skype has the most power are markets where you have high broadband connectivity, you have a large ex-pat population, and where the local telephony system is not as efficient as it could be. Many of the developing markets meet that profile so we think we have a huge opportunity in developing markets such as India and it's our intention to focus more on that in the coming year.

SJ: To succeed in the mobile market place, mobile device manufacturers have had to build carrier relationships. What does Skype need to do with either handset manufacturers and/ or carriers to succeed in the mobile market?

JS: I don't think the carriers should be able to dictate what software the users get to use. any company, the smallest startup in the world, if it has really outstanding software ought to be able to take on the whole world and not have to hire 50 people to develop relationships with 300 carriers.

Skype tries Skype Prime commissions at 8% for October

"For the whole of October we'll be reducing the commission we take from Skype Prime to just 8%. That means you get to keep more of the money from your calls – you deserve it."

Skype, in a letter to Prime service providers.

30% is Skype's standard cut. Skype takes 120 days to pay and does not pay interest on your money. 

Skype Prime is Skype's first try at eBay-style markets. Where eBay brings people together to buy and sell atoms, Prime brings people together to buy and sell services, entertainment, education, and information. Skype Prime could be just as effective a distribution channel for people who sell their smarts, skills, and charm as eBay is for those who sell cars, collectibles, and tickets.

This one month promotion is an experiment in incentives. How do you bring back service providers? How do you freshen the Prime directory? Is the lower rate enough or do you also need to shorten time to pay to 30 days?

Don Albert, Skype's GM for North America, is getting Prime ready. The timing is right: when the economy sucks, entrepreneurs innovate, and Prime could be on their list of simple things-to-do to pick up new business.

Prime builds on a trend to include fractional labor in labor markets.

Society started with lifetime jobs, then multiple jobs, contract work, part time work, and now... fractional labor. What's started at sites like Rent-a-Coder and oDesk is spreading to other occupations and even sites like LinkedIn Answers.

If the last ten years were about the rise of eCommerce for goods, the next ten are the rise of the online and mobile intangibles economy. We will sell knowledge, entertainment, and services; our time and intellectual work product instead of atoms.

While the eBays of the world are huge now, wait until they apply their "commerce community" experience to organize p2p markets for intangibles. Now it's iPod accessories, soon it will be for forensic accountancy. They know how to bring buyers and sellers together, make a place feel safe, build reputations, and deliver the goods.

When the Keens first tried to launch in the last decade, nobody had broadband, wi-fi was a novelty, mobile phones didn't have data plans, trusted payment mechanisms like PayPal were novelties, and communication tools like Skype were trying to work on dial-up.

Now, the technical and social prerequisites are here. Labor markets aren't just flatter, they are divvying work into smaller, task-sized parcels.

So you can ask the talent pool "what's the best mix for Prime?" and we can bid for your attention and wallet.

From My Skype Prime Wishlist:

• Prime in non-desktop clients. I want to pick up my mobile, my deskphone, my Skype for Asterisk client and make/take Prime calls.
• Prime for Talent Pools. Think distributed call centers, schools, consulting firms.
  • Talent discovery (tell me how our team can help you so I can find the right mix of people),
  • Service delivery (one or more people helping you at the same time or in a workflow), and
  • Payment (billing, reporting) are administered by different people/roles.
• Prime social. Turn on social features so members of the Prime community can organize themselves, talk with each other, friend each other and develop ties that enrich the marketplace.
• Prime text chat.  Let me deliver service without voice or video, if that's what my customer wants.
• Prime alerts. Text me, call my mobile, send an email to my blackberry, shout, anything to let me know a paying customer is calling.
• Prime web service APIs. Let programmers can add/update services from a web site, check your activity logs and payment queues, and launch Prime sessions from a web page. At Skype's faster post-founder innovation pace, they may be ready to pilot this in Q2-2009.

tags: skype, prime, donalbert, commissions, ebay, fractional labor markets

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Skype Journal Interviews Josh Silverman: The Way Ahead - Platform and Partners

This is the fourth in a series of posts resulting from an interview a week ago Friday with Josh Silverman, Skype's recently appointed President. In this post we talk about directions for the Skype platform and partner programs.
When I first attended a Skype developer event in June 2006, there was lots of enthusiasm for the Skype partner program and for its integration into various third party applications and service offerings. Several of the feature requests, such as call transfer and access to the voice stream, that had come to the surface by the time of this event, have since been implemented. In December 2006 Skype announced the Skype Extras program for which there are over 100 offerings available, mostly for the consumer user but the list also includes about ten in the small-to-medium business space. Most importantly, partners have been asking not only for a platform roadmap but also for execution on that roadmap.
Skype Extras included a publishing and transaction platform, yet to date, only PamConsult has taken full advantage of these feature for its well received (and award winning) PamFax offering. On the other hand, OnState has been able to figure out how to provide a friction-free full services program for its call center customer base. However, over the past eight months market visibility of any significance for the entire Skype partner program has just not been there. Yet we see "Skype access" continue to be built into various platforms such as Ribbit and Voxeo. Skype Certification exists for only seventeen offerings. InnerPass has received Skype Certification two weeks ago (review coming). At IT Expo last week in Los Angeles I came across several service providers and application developers who wanted to have a Skype presence in their offerings.
On the hardware side there have been many innovative offerings; I have experienced many of them. As confirmed by 3 executives at last Thursday's Mobilize 08 event, the Skypephone has met with phenomenal acceptance in the nine countries serviced by 3. Yet several hardware partners have drifted away to the point where we only see limited visibility for Philips, GE and IPevo dual mode (Skype and landline) phones and a few accessory products, such as the FreeTalk Wireless Stereo Headset, from InStoreSolutions (who largely address the European market). Beyond the Skype Store availability, WalMart is carrying Skype hardware in the U.S. (and I found some at Fry's in Sunnyvale this past Saturday).
Frankly, sorting out its platform strategy and partner relationships, and giving them appropriate visibility, is perhaps one of the biggest challenges that Josh and his team face in sustaining Skype's presence in the IP-based conversation space. In our interview with Josh it became quite apparent that these issues have not missed Josh's scrutiny leading up to the business reorganization we have been discussing in the various posts in this series:
SJ: In your interview with Om Malik yesterday you mentioned as one of your key growth initiatives "Skype as a platform, embedding Skype as the conversation infrastructure for devices and services". Tell use more:

JS: We're incredibly lucky that almost everyone in the world wants to do something with us. That's fortunate because we need to be everywhere. For Skype to be successful and to fulfill its full potential we need to be part of every device and every communications experience. We can't do that on our own. We need a really robust platform that allows us to be part of other people's experiences or devices and allow other people to be part of us. We all recognize that we have a long way to get from where we are today to there. With the relatively small program we have and small investment we have made we have 15,000 partners who have signed up for our program today. I think that's a great indication that if we really invest behind this we can do something magical.

SJ: What would that future platform look like?

JS: What we want to do is lay out a set of principles around the platform that say:

• we want people to be able to incorporate Skype into their experience.
• It should be the full Skype stack of functionality
• it should include all of our feature set and not just hive off one piece or two pieces.
• When you use Skype you should know you're using Skype and
• you should have a SkypeID which works across all of our experiences,

So somebody who wants to take Skype and build it into their experience but create a walled garden of "only within their experience" doesn't build value for the greater ecosystem. If you start with Skype on one experience and then you go to another experience with another platform partner, you still need to be able to communicate. There needs to be one SkypeID that works everywhere and then it needs to hold true to some basic sense of brand principles around what the Skype brand should be. Beyond those principles we really want to allow people to innovate and use Skype and do what they will to extend the functionality for our users.

SJ: Has the architecture for this started?

JS: Right now we have created the job of GM of Platform; I hope to very soon name a GM of Platform. That person is going to have to really work on what does the architecture need to look like to support this, what are the API's going to be - reference UI's, technical documentation - as well as evangelizing to the broader community forming some of our partnerships, so we have some work to do.

SJ: Is the job posted on your job board?

JS: Not yet, we have some candidates; but if there are folks in your community that are excited by this and we haven't already filled this in the coming days [faded away but implication was to apply].

SJ: Is there a timeline?

JS: I don't want to speculate too much. We do have a API [set] today, we do have lots of people working with the API's so we have something to build from. I'm not an expert. I wouldn't be able to lay out a timeline but we are going to get an expert who can lay out a timeline. ... As with everything at Skype, we want to be fast but also make sure we do it well, in particular with a platform. It's got to be well thought through so we support our partners really well. We know there's a big responsibility in there and we take it seriously.

SJ: Would you be looking at getting the partners involved in helping design that platform and getting some feedback on it?

JS:I think that would be essential. One of the things I'm pretty passionate about is always bringing the voice of the customer in early to anything we're trying to do and I think that, for the platform, that would be absolutely essential.

SJ: What are you looking at to address ongoing partner communications issues with respect to the partner program?

JS: I take the partner program really seriously and we're aware that we've not invested adequately behind it and want to do more. The first thing we are going to do is hire an experienced, capable leader of that organization who will pull together for me a plan for what resources do we need to invest in -- engineering, partner support, evangelism, technical documentation -- to make sure we build an organization that can support our partners robustly.
What I don't want to do is over promise. Step one is, when you get somebody good in, lay out a plan and then when we're ready to announce some more forward looking things we'll do that.

Changes are not going to happen overnight when Skype is acquiring 300,000 new registrations per day and profitable. But, based on the strategy and principles outlined by Josh in this interview, going forward we should be looking to see within a three to six month timeframe:

• Announcements of the appointment of two key senior executives who bring along experience in building platforms and partnerships
• A platform architecture and developer roadmap
• Revamped plans for Skype's hardware and software partner programs

It will also be most interesting to see what forums or other means Skype provides for input into the platform architecture and developer roadmap strategy. Execution is everything, especially at this stage of Skype's growth within the IP-based conversation space.
(For background on Skype's partner program history check out: A Primer for Skype's Direction - Skype's Extras Gallery and Developer Partner Program. And for an example of what attracts developers to Skype as an ecosystem check out "On Spotlight: Don Kennedy AKA TheUberOverLord".)
Next: Markets: Business and Geographical

A few thoughts on Skype interop tradeoffs

Interoperability comes at the expense of innovation. Once you have multi-network interop, you can't drag a whole industry with you as you improve technology.

For example, Skype keeps improving their codecs with a team of PhDs in Stockholm. The team (still hiring) updates Skype's proprietary codecs, and their configurations, to the whole Skype network every few months. Same with Skype's p2p engine configuration, and with NAT traversal as new routers and firewalls are discovered. So the technology that makes Skype work is changing often. As are the computers and networks Skype runs on. Skype learned things at 100 million user accounts it didn't know at 1 or 10 million. What will they learn by 500 million users? Time and change are giving Skype a unique depth of experience, knowledge and skill.

The move to mobile complicates this further. What Skype knew about networks, latency, UI frameworks, etc. all came in the PC/Internet context. Codecs and encryption that work easily on PCs will melt most phones. Wideband audio, stereo, spatialized audio? These crowd pleasers wait for several cycles of Moore's Law and years of mobile device hardware evolution. High def video? A pipe dream for the next decade.

Yet Skype must blend mobile usage into their PC network while keeping core values and brand notes. And Skype hasn't started to plug-in to web sites,  another front with its own changes and revolutions. 

So the technology is fluid, complex, in motion. But Michael Robertson's call for Skype to interop is a call to stop innovation and adaptation. Kids born when the conventions MR wants Skype to support were defined are now starring on Are You Smarter Than A Fifth Grader? This is like locking in mileage and pollution standards from the Mad Men era instead of reaching for the zero emissions 100mpg car.

So:

1. At what point should Skype give up competitive advantage for the increased network effect?
2. When the environment continues to change rapidly, when should you stop innovating and start commoditizing?
3. Can you interop on some features but not on others? Which ones? And when is it worth it?

tags: skype, interop, interoperability, strategy

Follow Phil Wolff on Twitter or FriendFeed or on Skype.

Michael Robertson responds

[A letter by Michael Robertson.]

Phil,

Thanks for the post on Skype Journal about my letter to Skype pointing out the hypocrisy of demanding that the wireless carriers open up their network when Skype will not open their network to receive calls from others. You don't address the core issue about Skype interconnecting with other networks and seem to make excuses about why it's not possible or safe. These protests had no validity 5 years ago when peering was an issue with the major IM networks. Back then AIM and Yahoo used identical excuses about why they could not interconnect which MSN and Google. Now those entities cross connect with each other in several instances.

Gizmo5 uses and fully supports an open standard called SIP which lets callers from different networks connect to each other similar to how emails from different servers are connected to each other. This is how the Gizmo5 network connects with over 250 big and small networks. You might also be surprised to learn that Skype supports SIP already! Skype uses SIP to hand-off calls to the PSTN (the original phone network). Anytime you are using Skype-In or Skype-Out your calls are going from/to your computer using both the SIP and Skype systems. In spite of your questions and concerns below, this unquestionably proves it is not only technically feasible, but secure and practical.

When it is in Skype's best business interest they support SIP. Other times they want to lock out all competing VOIP companies which is why they don't publish a public SIP interface which is what I'm calling for. (You probably know that several companies like Fring and Nimbuzz have reverse engineered the ability to send and receive Skype calls but it is susceptible to breaking or being blocked by Skype.) This is exactly the situation with the FCC letter. Skype wants others to open their networks but Skype won't open theirs. Either you believe companies should be able to choose or you believe everyone should be open. Either argument has validity but toggling between the two positions to fit business justification should be pointed out.

You state in your public defense of Skype's closed system: "How we connect a phone to a mobile network is standardized. How we connect a client to the Skype network is not. How we connect the Skype network to another service is not." I would contend this is inaccurate. There is a standard way that Skype client's connect to a network - they have just chosen not to publish this and their reluctance you believe gives them the right to lock everyone out. (The wireless carriers could of course make the same argument rebuffing Skype.) However to send and receive calls, it is not necessary for Skype to reveal how its entire network work. Rather they are only required to offer a SIP interface which as I mentioned Skype already has it is just not made available to others.

You proposed several questions so let me address them below.

1.  Will you peer IM, video, file transfer, presence, commerce, desktop sharing, conferencing, texting, microblogging, and data channels? Crossing all conversational modes? Exactly whose codecs and protocols should everyone use? Should Skype users downgrade the quality of their voice and video calls to match Gizmo's?

Yes, Gizmo5 will and does peer all conversation types. We use XMPP for text messaging and presence and SIP protocols for voice. We strive to adhere to the standards to insure interoperability with all. Where there are standards we use them and publish them. If we build something that is not to standard we are open to publishing the specifications.

This is "Skype Journal" so I don't expect objective treatment about voice quality but the facts are Skype and Gizmo5 calls will have similar voice quality because both products use the GIPS media engine. This means the code is identical all the core aspects that impact call quality such as jitter protection, echo cancellation, noise protection, etc. See:  http://www.gipscorp.com/default/customers.html

On the video front, Skype does have higher quality video because they implemented On2's proprietary solution called vp7. Gizmo5 chose the open standard called h.264 so that we could interoperate with others doing video calls. In fact, you will see mobile to PC video in the near future suing Gizmo5 because of this technology choice. Gizmo5 would be happy to license On2's technology if that is what is required to interoperate with Skype. Gizmo5 already supports multiple audio/video codecs so adding another one is trivial.

2. Will you require realtime encryption? Strong enough to prevent live intercepts? Will you require all networks to notify users when their conversations are no longer encrypted?

Skype and Gizmo5 have similar approaches. Skype to Skype calls are encrypted as are Gizmo5 to Gizmo5. Anytime someone calls the PSTN (whether on Skype or Gizmo5) those calls are never encrypted. Encryption should be a user choice where appropriate. No, we don't require realtime encryption.  We don't tell others how to run their networks. If others don't run their networks responsibly then users will abandon them.

3. Will you agree to strong user authentication? So users can have confidence in the identity of friends and strangers?

Not sure how this is relevant to peering with Skype. Remember - that's what we're talking about. Users of other VOIP networks being able to call Skype users and receive calls from them. We don't support this, but the fact of the matter is that if it's important to consumers then a network will support it and users can migrate to that service. As it is, users are locked into Skype and have no choice to choose another service if they want to call anyone in the Skype network.

4. Will you (and everyone you peer with) agree on user profile data structures, white page directory services, and directory search interop?

We can't make everyone who peers with us agree to do this. We do publish an API for our system so others can interoperate. I think this would be ideal. I'd love to have it for email addresses and IM addresses and social network profiles, but sadly we do not. It sounds like you're making my case about why open standards are important.

5. Will you support data portability principles? So users can switch to and from you network with their identities, profiles, buddy lists, histories, and preferences?

I started MP3.com 10 years ago on the premise that open standards are the way to go. They are with music (MP3) and they are with email, IM and VOIP as well. Data portability is also important and I spend my money building companies which adhere to these tenets. Again, not sure what this has to do with peering since Skype supports none of the items you have listed. I encourage you to check out another company I run called MP3tunes which stores your personal music collection in the cloud. Go sign up for a free account. You will see that we let you sync your entire music collection everywhere - no lock in.

6. Will you peer customer support costs and security? How should customers escalate security and technical issues across multiple networks?

Gizmo5 already sends and receives calls from over 250 VOIP networks. And we work through security and technical issues across networks as they arise. This is not a hard thing to do. There's no reason VOIP can't be a universally open system like email. These are just straw man arguments about why it's hard or not possible. These wobbly arguments work when you're testifying in front of congressman who don't know a damn thing about technology, but they don't hold water to technologists. And the point of using standards is that if people adhere to the specifications everything works fine together right out of the box. Of the more than 250 networks we regularly exchange calls with we have had issues with less than 15 in 5 years and they have always been quickly addressed because it's in both peoples interest to make sure things work.

7. Will you mandate end-to-end transparency of call quality information?

I don't even know what this is. But no, we don't mandate how others operate their network.

8. What namespaces would you suggest Skype use? Will you support OpenID or some other namespace?

The SIP standard supports namespace issues. It is similar to email. username@skype will work just fine. Again, this is how we interoperate with hundreds of networks now. It's a non-issue.

9. Will you open Gizmo up to all partners? Your contact page says "Unfortunately, we are not setup to partner at this time with organizations with fewer than one million users."

Nice misquote. Let me include the entire paragraph in context so your readers will get the full picture. From: http://gizmo5.com/pc/about-us/contact/

Potential Partners

Companies and organizations looking to partner with Gizmo5 should visit our parent company site, SIPphone.com. Partners looking to brand the Gizmo5 client and service typically have user bases well in excess of 1 million users. If you are a smaller company or individual looking to start your own VoIP service, please visit our developers area, where you can learn how to start your very own VoIP service. Unfortunately, we are not setup to partner at this time with organizations with fewer than one million users.

As you can see the 1 million reference is related to people who want a branded version of the Gizmo5 client to distribute. Anyone with a VOIP network can setup a SIP service (or Asterisk) and dial our users or receive calls from our network. If Skype Journal has a million users we will provide you with your own branded VOIP client to distribute.

10. How will you make all this work? What industry body or standards process could help Skype and other companies find the sweet spots of commoditized conversation?

Some years back some smart guys got together to address this very problem.  They did so in a public manner using the same process that brought us standards for the web and email which is why the web and email work universally. They called the standard they defined SIP and it deals precisely in how calls are initiated, negotiated and connected. It's what Gizmo5 uses and promotes as the solution to allow calls to flow freely between networks instead of having a big number of disparate networks. You can read all about it here:

http://en.wikipedia.org/wiki/Session_Initiation_Protocol

Skype should support a public SIP interface so standards based networks like Gizmo5 and others can seamlessly send and receive calls.

-- MR

Michael Robertson

www.MP3tunes.com - Your Music Everywhere
www.Gizmo5.com - IM/VOIP/SMS from PC and phone

 

del.icio.us Tags: skype,sip,gizmo5,asterisk,voip

Skype Journal Interviews Josh Silverman: The Way Ahead - Managing the Skype Team Culture

This is the third in a series of posts resulting from an interview last Friday with Josh Silverman, Skype's recently appointed President. In this post we talk about Skype's value set, getting the business side right while benefiting from the experience and skills of the current employees and the role of product marketing.
In the last post we talked about the major issues Josh has identified for addressing along with a strategy for employee empowerment to reduce the complexity of decision processes while driving towards business success. But a critical requirement for employee empowerment is the need to establish and communicate a sense of core values that flow throughout the company and make employees more comfortable in making decisions, especially with decisions that may involve some risk. As a follow-on question to our discussion of employee empowerment I asked about the need to drive a value set through the company. Josh's response:

Skype has a great set of values. Coming into the company I'm very humbled by what they've accomplished, what a great culture and values we have. I want to make sure we nourish and respect that. So some of the values I see are:

• thinking disruptively and differently about problems, not just incrementally innovating
• wanting to have an impact on the world
• caring a lot about what we do for people and doing that globally
• a big desire to win
• a big desire for excellence
• a passion for the customer

Those are qualities that I would hold dear and want to make sure we nourish as we grow.

We then went on to the "people" challenges of getting the business side right while building on the inherent passion of the current employees.

I think everyone at Skype would agree that we, in a very short time, in about a year, hired over 150 people into marketing, product management and [other] non-technical functions. [We] essentially evolved those functions from scratch in a year. Given the pace of change at Skype, we needed to bring a lot of that expertise into the company. Of course, the challenge is that, when you grow that fast, making sure everyone knows what their role is and how to do that well ... training ... getting a common culture ... takes a little bit of time. So what I'm focused on now is clarifying the accountability of all those business roles.
By the way, to your point about 'we have a lot of passionate technical people', I couldn't agree more. Often time the best ideas come from that team. It is my belief that what the product and marketing organizations need to do is understand what problems the customer needs solved, and then to work together with engineering to think of the most creative, best way to solve that problem, hopefully better than anyone's ever thought of in the past. If you're doing an "ok" job of that, you're understanding the articulated needs of the customer - like I can't pay easily enough ... it takes too long to download ... I can't configure my devices . If you're doing a great job, you're understanding the unarticulated needs of the customer .. things like "I'd like to be able to call anyone in the world for free" ...

We then got into a short discussion about the role of the product manager as the mediator managing a balancing act between the user market and the engineering and design teams:

... It is not the job of the product manager to come up with the solution; it's the job of the product manager to quarterback the design team and the engineering team and the marketing group together to come up with the world's best solution. I think engineering and design play huge roles in that process.

Next: The Skype Platform ... and Partner Program.

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Skype asks FCC to support unfettered customer freedom

Skype called "liar, liar, pants on fire" [my phrasing] on the leading US mobile carriers and "we can't trust those guys" to the Federal Communications Commission. It was triggered by comments at last week's CTIA conference. For example:

"Unfettered access would be a pretty bad experiment." "There needs to be some stewardship or control."

— Robert Dobson, chairman and president of T-Mobile USA

"I think we have to be careful to not all run to one side of the ship"

— Lowell McAdam, CEO and president, Verizon Wireless

“The big Internet can be daunting ... There can be too much choice.”

— Sprint Nextel Corp. CEO Dan Hesse

Skype's Christopher Libertelli responded to these and other comments in a letter to the FCC's chairman on Friday. Let's sample the letter:

Instead of broadly carrying forward the Commission’s tremendous strides toward open networks, the word coming from the CTIA gathering is that open networks present a multitude of problems for the carriers, and that to protect consumers from too many choices, network operators must be the gatekeepers of the consumer experience. This is inconsistent with the Commission’s Broadband Policy Statement and a market structure that maximizes choice and innovation.

Let me parse this for you.

• Instead of broadly carrying forward the Commission’s tremendous strides toward open networks,
  
  
  • reminder that you (the FCC) already support "open"
  • the mobile giants are lollygagging and poo-pooing the commission's mandate
• the word coming from the CTIA gathering is that open networks present a multitude of problems for the carriers
  
  
  • they are whining and giving excuses
  • "too complex" is silly since open is simpler
  • despite they are usually slow moving behemoths overly concerned with internal operations
• and that to protect consumers from too many choices,
  
  
  • they say voters are stupid babies, 
  • they want to deny citizens their consumer freedoms
• network operators must be the gatekeepers of the consumer experience.
  
  
  • "we know best"
  • "control is our right"
• This is inconsistent with the Commission’s Broadband Policy Statement and a market structure that maximizes choice and innovation.
  
  
  • market structure = anticompetitive duopoly (Verizon + AT&T)
  • duopolies don't compete fiercely
  • think "OPEC 2.0" power concentration
  • you say you want open networks
  • please verify the oligopoly is acting broadly, quickly, meaningfully
  • the public good is at risk

The letter continues in a similar fashion, full text below.

Skype is asking the FCC to check the carriers who promised open access to their networks.

Please.

Now.

Technorati tags: skype, fcc, regulatory, freedom, netneutrality, network neutrality, liberty, carterphone, us, chrislibertelli, von coallition

 

 

September 12, 2008

ELECTRONIC FILING

Chairman Kevin J. Martin

Federal Communications Commission


445 12th Street, SW


Washington, DC 20554

Re: Ex Parte, RM-11361

Dear Chairman Martin:

Skype Communications S.A.R.L. (“Skype”) writes to respond to various statements made at CTIA’s Wireless I.T. & Entertainment conference in San Francisco. Attached to this letter is a Reuters report on what seems to be a wireless industry theme at the CTIA meeting. Instead of broadly carrying forward the Commission’s tremendous strides toward open networks, the word coming from the CTIA gathering is that open networks present a multitude of problems for the carriers, and that to protect consumers from too many choices, network operators must be the gatekeepers of the consumer experience. This is inconsistent with the Commission’s Broadband Policy Statement and a market structure that maximizes choice and innovation.

Skype disputes the need for wireless carriers to maintain their closed networks not only in the face of consumer preferences but contrary to their assurances to the Commission[1] that the industry had adopted a policy of openness such as to obviate the need for the relief that Skype sought in its Petition in the above-captioned proceeding (“Skype Petition”). [2] Apparently,these assurances of openness led some at the Commission to believe that there was no present need for Commission action. In this regard, the carriers’ apparent change of heart should be a cause for concern.

Despite the carriers’ assurances, when lip service to the goals of open networks is translated into their terms of service, they continue to require their subscribers to limit the applications and devices that can be used on their networks. The attitude of the wireless carriers was perhaps best summed up in Sprint Nextel Corp. CEO Dan Hesse’s recent comment: “The big Internet can be daunting ... There can be too much choice.”[3] This stands in stark contrast to the Commission’s wise policies designed to promote as much consumer choice as possible.

Skype respectfully submits that the wireless carriers continued opposition to open networks — including their restrictive terms of service — raises questions about whether the industry will faithfully implement the Commission’s rules and policies, including the standards set out in the Commission’s Broadband Policy Statement.[4] Skype is mindful of the challenges that wireless operators face moving from a closed model to an open, Internet-friendly business. As noted, despite some recent steps to modify terms of service toward openness, carriers continue to prohibit voice applications that compete with their core business.[5] Consumer choice, competition and free markets, not carriers acting to block competition, should win the day in wireless — now, not later. If the Commission believed that the transition to more open networks was going to proceed quickly, statements out of CTIA’s convention suggest just the opposite.

Skype repeats that the best way for the Commission to maintain the vigilance that is necessary to protect consumers’ interest in open wireless networks is to for the Commission to affirm that the Commission’s Broadband Policy Statement applies to wireless broadband networks. This would be a measured response to the dynamics of the wireless market and would send the correct message to an evasive wireless industry. It would also encourage those in the application development community, like Skype, who have reasonable expectations that applications will run as they were designed on wireless broadband platforms.[6]

Affirming that the Commission will enforce the Broadband Policy Statement and address any violations of the Policy Statement on a case-by-case basis is fully consistent with the Commission approach to constraining Comcast’s abusive practices.7 In this way, the Commission will maintain a policy environment that serves the interests of consumers, carriers and innovative providers of wireless devices and software applications.

Thank you for your continued vigilance in this matter. Please do not hesitate to contact me if you have any questions or concerns.

Respectfully submitted,

________________________

Christopher Libertelli

Senior Director, Government and Regulatory Affairs – North America


SKYPE COMMUNICATIONS S.A.R.L.


6e etage, 22/24 boulevard Royal, Luxembourg, L-2449 LUXEMBOURG

Footnotes:

1. Ex Parte filing by CTIA — The Wireless Association, RM-11361, April 14, 2008, at 1 (“Wireless carriers, reacting to the demands of consumers in the competitive market, already have begun implementing a variety of openness initiatives designed to expand consumer access to new and innovative wireless devices and applications. . . . Because both Commission action and the wireless marketplace have addressed the concerns raised by Skype, the Petition should be dismissed.”).
2. Skype Communications S.A.R.L., Petition to Confirm A Consumer’s Right To Use Internet Software and Attach Devices to Wireless Networks, RM-11361 (filed Feb. 20, 2007).
3. Allie Winter, Embracing an Open Network, RCR Wireless News, Sep. 10, 2008.
4. Appropriate Framework for Broadband Access to the Internet over Wireline Facilities, CC Docket No. 02-33, Appropriate Regulatory Treatment for Broadband Access to the Internet Over Cable Facilities, CS Docket No. 02-52, Policy Statement, FCC 05-151 (rel. Sep. 23, 2005) (“Broadband Policy Statement”).
5. See Letter from Robert W. Quinn, Jr., Senior Vice President-Federal Regulatory, AT&T, to Commissioner Robert M. McDowell, WC Docket No. 07-52, July 25, 2008, at 1, n.1 (noting that all major wireless carriers do not permit the use of peer-to-peer VoIP applications like Skype).
6. A wide array of industry and consumer groups agree that the Broadband Policy Statement should apply to wireless broadband networks. See, e.g., Comments of the Information Technology Industry Council, RM-11361, at 1 (Apr. 30, 2007); Comments of the Consumer Electronics Association, RM-11361, at 2 (Apr. 30, 2007); Comments of the VON Coalition, RM-11361, at 2 (Apr. 30, 2007); Comments of Mobile Industry Executives, RM-11361, at 6 (May 1, 2007); Comments of Consumers Union, Consumer Federation of America and Free Press, RM-11361 (Apr. 30, 2007); Comments of the Ad Hoc Public Interest Spectrum Coalition, RM-11361 (Apr. 30, 2007).
7. Formal Complaint of Free Press and Public Knowledge Against Comcast Corporation for Secretly Degrading Peer-to-Peer Applications, Memorandum Opinion and Order, File No. EB-08-IH-1518, WC Docket No. 07-52, FCC 08-183 (rel. Aug. 20, 2008).

Skype Journal Interviews Josh Silverman: The Way Ahead - Righting the Ship

This is the second in a series of posts resulting from in interview last Friday with Josh Silverman, Skype's recently appointed President. In this post we talk about the key issues Josh found necessary to address and establishing a framework for employee motivation and empowerment.
Over the past couple of years I have written many posts lauding Skype, largely for its conversation infrastructure technology; I have also, from time-to-time written posts about the need for Skype to address the business infrastructure surrounding the deployment and use of the technology. With 300,000 new registrations daily, 30 to 50 million active users within a given day, and demand in the small-to-medium business market driven by its inherent cost advantages, Skype needs to right the ship when it comes to all aspects of turning Skype into a business that delivers customer satisfaction while sustaining profitable growth..
Some have thought that Phil and I are Skype Cheerleaders and, in their simplistic world, want instant solutions to problems. Doesn't happen in a business that has become as large as Skype. To take maximum advantage of Skype's technology, Skype needs leadership at the top that delivers a sense of mission, a set of inherent values and and a management structure suitable to a business that has grown as large and as rapidly as Skype. Business processes need to become readily scalable. Within such an environment, the Skype team needs to execute; employees need to know their responsibilities, to be held accountable for them, and, most importantly, to be empowered to act in their area of responsibility.
When we asked Josh Silverman, who took over as Skype's President five months ago, as our first question, :"What has changed at Skype in the past year (since Niklas' departure)?" he replied that he could only speak for the past five months. He then confirmed my suspicion: he has used this time to delve into all aspects of Skype - involving internal team and individual employee meetings, learning more about customers and their needs, examining market differences worldwide, reviewing both current and archived Skype forums and websites and even surveying media, all as input to determine what management structure and what cultural environment were needed to right the ship. What follows is a high level view of his action plan. (Note: where appropriate he has already discussed these moves with the Skype team, so there are no surprises here for them.)

1. Define a mission statement
2. Establish a set of values
3. Restructure for business success
4. Improve the user experience
   
5. Evolve the business model
6. Develop a technology roadmap.
7. Establish a framework for effective customer and partner relationships
8. Build market awareness

In building out on his response, Josh identified as issues to be addressed:

• clarify Skype's mission and strategy going forward
  
  
  • be clear about what Skype is trying to accomplish
  • be clear about decision making
• maintain an ongoing sense of momentum around building great products
  
  
  • the Skype 4.0 beta program
• understand their customers and bring their voice into the company.
• a big issue: organize the company structure to clarify roles and accountability for people
• establishing employee accountability: define who owns what internally
• add people skills and resources consistent yet scalable with the level of customer growth
• grow internal talent while adding experienced management leadership
  
  
  • bet on the people who brought Skype to this point
  • bring in experienced outside help to scale

On the core subject of building employee responsibility and accountability Josh responded:

We need to clarify accountability and roles for employees ... I'm a big believer that, if you take a small cross-functional team, give them a mission, a lot of room to innovate, they're going to come out with fantastic products. So we're moving our organization more in that direction.
Skype, I don't think is different [from] a lot of hypergrowth companies, in that the business grows so fast that it is very hard for the organizational structure to keep up. What ends up happening is people just take on extra responsibility here and there as the needs come up. And pretty soon you find yourself in a place where it's really not clear who owns "this" ... there are some really important things that nobody owns and some things that two or three people all think they own it.
So we need to step back and say, ok, lets' take a fresh look at this and make sure everyone is really clear about who owns what, what are you accountable for, and what resources do we have and then let them go forth and empower them. So that's what we're doing right now and I think in the coming months we'll be in a much better place for everyone. ... I've been very public with my team about it and they're all very supportive .... and they're quite excited for us to do that.

On building the right mix of people, skills, capabilities to execute:

I'm a big believer that, when a company is growing as fast as Skype, just keeping up with the scale and evolution of the company is a major promotion every year. So what we want to do is grow a lot of our internal talent and take bets. I'm also a big believer in taking bets on a lot of the people who have been with you from the beginning, who understand the business and culture. But I also believe in bringing experience from the outside ... who have seen this before and had to scale this way before and can help us to figure out how, as we inevitably get a little bigger, to stay agile and, in fact, I think we can get even more agile as we get bigger, if we're smart about it.

On getting employee empowerment right:

Everybody needs to know what their accountability is. I'm a believer that empowerment doesn't mean everyone can do anything ... because then everyone starts overlapping and, actually, you end up with a big mess. What empowerment means is everyone is really clear about what the company is trying to accomplish, everyone is really clear about what they're accountable for and, within that accountability, they have the scope to make all decisions. It doesn't mean they can make any decisions they want but they're really clear about where their decision making begins and ends. If you do that everybody feels empowered and we grow much faster. By the way I also believe that the best decisions you make are almost always made at the level of the working team. So I aspire to a world where very few decisions flow up to the executive ranks other than "what are we trying to solve for?" and "how much resource are we investing in any given initiative?" and "do we have the right talent?".

Next post: Managing the Skype team culture

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Skype Journal Interviews Josh Silverman: The Way Ahead - An Introduction

This is the first in a series of posts resulting from in interview last Friday with Josh Silverman, Skype's recently appointed President. In this post we provide an overview of the range of topics discussed and some background to the interview.

On Friday Phil and I participated in a one hour wide ranging interview with Skype's new President, Josh Silverman. Having listened to both Skype's team and the market over the past few months, Josh is starting to take the high level measures required to grow Skype from a technology "marvel" into a full-fledged conversation infrastructure business that is "just there" when you want to converse ... anywhere, anytime. Having personally participated in a corporate restructuring over a decade ago, suffice it to say that, while technology has been rapidly changing in the interim, the basic requirements for growing a business from a "wonder" into a sustainable, world class enterprise have not changed. After all, you're dealing with human interactions and we're all still emotional beings who need motivation internally (to build a functional employee team) and a "wow" level of excitement externally (to build an appreciative user base). Some background facts that have led to the issues that Skype must address and the action plan Josh has determined to be necessary:

• Skype, in its first five years, has grown to its over $500MM annual run rate faster than either eBay or PayPal
• Skype has about 500 employees worldwide with over 150 joining in the past year
• Skype delivers about 6% by minutes of the world's international calling traffic

Recall, that during Josh's interview with Om Malik, he outlined three key growth initiatives:

• product innovation: making Skype easier to use and more reliable; the video opportunity
• paid services and their marketing:
• Skype as a platform: embedding Skype as the conversation infrastructure for devices and services.

In many ways our discussion expanded on those themes. Because of the range of topics we covered and given short posts make for easier and more readily absorbed reading than one long post, we'll cover the interview content in several posts over the coming week. But our topics will include:

• Restructuring and reorganizing with new focuses while delegating responsibility
• Skype's platform strategy and the infrastructure required to execute
• Skype's approach to the business market
• Geographical markets
• Generating broader awareness through marketing
• Tech support

Since Om had already asked the questions about Skype on iPhone and the eBay relationship, we left those out of our interview in the interest of using our time with Josh to learn more about Skype's internal evolution and the direction in which Josh sees driving Skype as a publisher of conversation infrastructure software and services.
Next: Righting the Ship

Josh talks with Om

Om Malik wrote up his interview with Skype CEO Josh Silverman today. Here's his 19 minute interview.

Factoids:

• 6% of all international calling minutes.
• $136 million revenue last quarter.

What follows is a very rough and partial transcript of the first half of the interview, starting after generic introductions. Spelling, typos, omissions, and other errors are all mine. Corrections and additions welcome. 

Om: eBay Synergy?

Josh: "Our mission is enabling the world's conversations. We aspire to be is the world's leading communications software company."

Josh: "I think that the communications industry is going through one of the great sea changes of our time. And we'll look back ten years from now at this moment in time and say this is the time when communications transitioned from being hardware to being software.

What i mean by that If you cast your mind back ten years ago, you'll remember that dedicated appliance you had called the telephone. and it was purpose built for voice and it was tied to a network that was purpose built for voice.

if you think about the world we live in today we use these multipurpose computing devices, i don't know about you, maybe 5% of my time on this is spent with voice communications. i do all kinds of other communications with it. if you look at the iPhone, it's not even a communications device. you're checking stock prices or the Internet, watching movies and listening to music. one of the applications you use on that device is around communication.

so communications moved from hardware to software.

it's now part of every device and every device is connected to a multipurpose network called the Internet.

so what that means for consumers is massive amounts of innovation, making communication richer and fuller.

again, going back to when communication was embedded in the hardware, it was only voice. now, if you think about the spectrum of communications, it goes all the way from very short twitter-like communications, in our case we call them mood messages, to chat, to voice, to video, to file transfer and online collaboration; a whole set of different modes you want to talk in, all tied together by some common services. for example one common address book, a common set of presence. and what consumers want and need is that core set of services to follow them from device to device everywhere they are.

we think Skype is uniquely well positioned to capitalize on that. in fact we think that is the future.

just like the train industry did not invent the airplane, the telephony industry is not going to invent the communications business of the future.

Om: I wrote about ten of the telephone companies getting together and building their own client. What do you make of that?

Josh: We welcome competition from all sources.

Om: If you were a betting man, when would you bet will they release a product like that?

Josh: the phone companies have not been known to be world class at building software. when ten of them get together the odds go down a lot.

the great thing about communications being in software is this is going to be a massively competitive industry. and when it's massively competitive the consumer wins.

what we need for that to happen is we need open networks.

and the world that North America lives is in today, where the carriers control the device you can use and the software you can load on the device, consumers are losing big time.

Om: I wouldn't go that far. That's Skype's argument. I don't buy that. Although I agree we're are living in a country where competition is scarce, and where it's almost like an emerging economy as far as broadband and IP networks are concerned.

Being married to eBay seems like a big mismatch.

 

...

Josh: One of the interesting things about the communications space is that it is very balkanized. cable providers against the fixed line against the wireless. and any camp you join makes as many foes as it does friends. one of the really unique things about eBay is within eBay umbrella I'm a totally neutral camp, i can work with everybody.

Om: why not just go public? spin it out of eBay? you are profitable, you've got revenues, you have customers, your are growing business like crazy. why not a standalone company?

Om: What should we as consumers be excited about?

So there's three things we're focused on right now at the highest level. Product innovation, paid services, and platform.

On the product innovation side I'd highlight a couple of things.

Skype was not the first company to do voice over the Internet, it was just the first one to make it really easy. while Skype is very easy to use, it's not easy enough. and so a lot of the innovation you should expect from us is making it even easier and even more reliable.

Another big area of focus in product innovation is going to be around video.

Video is going to be the dominant form of communication. now i don't mean that that all calls will be video calls. i think voice and chat will be table stakes and people will make the decision around which application to use based on who delivers the best, most reliable, highest value video experience. so we think video is a great source of differentiation for Skype.

On the paid services side, we have some great paid services. They're just not particularly well marketed. A lot of our users don't know we have them, we haven't named them well, we haven't described the what the value proposition is well. When people find out about them, they're delighted. We just haven't done a good job. So I think there's a lot we can do just to market our current products and services better and bring some new and exciting ones to market.

The last thing I talked about is platform. Skype has historically been a relatively closed community. now, we have created an api that has about 15000 partners working with Skype to build their capabilities into Skype. there's a massive ecosystem of people who want to build Skype into their products and services, from hardware providers who want to build Skype into flat panel televisions or cordless phones to software providers and web sites who want to build Skype in. and we should be working with all of those, we can't win if we're working with all of them one off, so we need to have a really robust platform. obviously, the within platform the area of most importance needs to be mobile.

This is a great start. Let's explore this further.

tags: skype, gigaom, ommalik, joshsilverman, strategy, competition, differentiation, positioning, marketing, partnering

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Josh talks with BusinessWeek

Catherine Holahan interviewed Skype CEO Josh Silverman. Notable factoid: Fully 10% of Skype users buy a paid service.

tags: skype, businessweek, stats, trends, financials, ebay

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Silverman says Skype targeting telecom profits

In an interview with the Mercury News, Skype CEO Josh Silverman says Skype...

plans to offer consumers and companies less expensive options for conference calls and 900 numbers

Skype...

is targeting some of the most profitable "niche" businesses of telecommunications companies.

Big profits "probably means there's significant market inefficiency," Silverman said. "Skype can come and make things more efficient for consumers and build a reasonable business for ourselves along the way."

See also:

• eBay Appoints Shopping.com's Josh Silverman as New Skype CEO, February 2008
• Skype CEO Josh Silverman -- Thoughts After the First Four Weeks, April 2008
• Josh Silverman on Skype's next five years, August 2008

tags: skype, ceo, joshsilverman

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The Bush/McCain economy is good for Skype

The U.S. misery index is up. Unemployment is at a five year high. The US dollar is at a generational low. Home loans are hard to get and usurious if you get them. College is out of reach for millions. Petrol so expensive that people aren't traveling, are rethinking location decisions like where they work and live, how often they visit family, are cutting shopping trips and buying more online.

This is good for Skype adoption in the United States.

Cheap is Skype's gateway drug.

We substitute onlife communication for costly local and long distance travel. Telecommuting, conference calling, and team chats replace hauling your sorry atoms to meetings. 

We reinforce relationships with family and close friends as financial threats loom large. Safety in numbers, strength in tribes, even at a distance.

We look hard at our monthly spending. Compared to PSTN landlines, $5/month for 10,000 minutes in the US & Canada and a SkypeIn number looks like a lifeline. Hundreds of dollars kept in your wallet. Small businesses, also feeling economic pain, are setting up Skype and Vosky PBX-to-Skype gateways to save. Good feelings in bad times can bank loyalty money can't buy.

Will next month's 2008-Q3 numbers support the theory? We'll see.

tags: skype, economic geography, economy, trends, marketing

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Does Office 2.0 include Voice 2.0?

I'm stopping by the Office 2.0 Conference Thursday and Friday. When it started, Office 2.0 was document centric, bringing Microsoft Office to the web. Last year it became more metawork (work about work) and project/workflow oriented.

Realtime talk remains off topic.

There are a few contrary examples. Plutext.org enables live collaborative editing of Microsoft Word docs.

So where do Office 2.0 and Talk 2.0 overlap?

Simply, you have...

Talk with Office features might look like Skype plug-ins for document co-writing. Call centric with talk experience enhanced by office tool.

Office with Talk features might include collaborative spaces that add live chat room.

There's room for service-to-service interop, but we haven't seen much.

Three dimensions affect the uptake of this union:

1. Time structures
2. Engagement
3. Packaging

Time Structures

Nearly all Office 2.0 services are mostly asynchronous. While most Talk 2.0 services are nearly synchronous.

But we're seeing some blending. For example, Blackberries turn email into instant messages. Persistent IM chat rooms keep history so you can catch up on a conversation.

The other structure to time is that Live Talk is an event. It takes place in time. Divide each conversation into periods before, during and after a call. 

Before a talk, you have to discover people to engage, using a namespace, group affiliations, authentication of ID, permissions, white/yellow page directories, etc.

You'll also want to schedule your conversation using calendars, project deadlines and services that find common time windows.

If you're exceptionally lucky, someone has tools that map to-do lists to agenda items and reminder services.

During a conversation, you can augment the experience. For example, adding live chats or conferencing backchannels to desktop sharing or collaborative writing exercises.

After, you can add the conversation's debris to a team/project/process/transaction workspace. Or publish it to a blog/vlog/wiki/microblog, becoming part of your team's institutional memory, searchable, attributable.

Degrees of Engagement

You are more than an email address or Skype name. The more you share digitally, the closer your experience comes to feel like face-to-face contact. The higher the fidelity (wideband audio, high quality video) the higher you climb the ladder of engagement.

Engagement brings people into a call, make it more real, vivid, increasing focus and participation. When embedded in an Office application, that engagement improves the quality of the work experience.

Embedability

OK, so you can design solutions that exploit Talk's time, engagement, and modality attributes. How do you add talk with as little effort and as much reliability and scalability as possible?

I started off saying few Office 2.0 companies have Talk 2.0 features in their products. It's a little failure of imagination. Mostly, though, it's the companies that offer Talk 2.0 components haven't made them very embedable.

What does it take to make Talk readily embedable?

Web services. Web services let my servers talk to your servers. To start, you want access to a metatalk command language, creating accounts, groups, sessions and getting statistics, status, and reports. More, you want access to the content of conversations; the better to index and repurpose them. A startup can't force a customer to download 20MB software clients and keep them running on a desktop; they rarely have that sort of power.

Browser clients. Flash and JavaScript downloads are small and cached. So you can access your Office/Talk service from nearly anywhere. Side benefit: you aren't tied into a Talk supplier's UI, you can adapt and adjust it to meet your changing needs and your deep understanding of the workplaces you support.

The customer's name spaces. Skype commands the Skype user namespace, Microsoft Microsoft's, and so on. As an infrastructure provider, you have to go beyond that; you no longer control the customer relationship. Each Office 2.0 service will either have their own namespace ("thank you for registering at Octopz") or administer an enterprise's namespace ("set up the call using your company directory or org chart").

Security. Your security must be better than your customers' and much better than their customers' security.

Commerce. Office 2.0 companies will charge for many services, so accounting, billing, automatic payments, and revenue sharing must be part of any Talk 2.0 service offer.

Fidelity and Immediacy. Skype's been spoiling people with amazing audio quality. Skype sets expectations high. Wideband spectrum, noise reduction, echo cancellation, high resolution, fast frame rates, deep color depth, smart compression and other techniques are expected in rich clients like Skype. Thin/browser clients suffer from comparison but are in demand anyway. The same applies to the problems of latency, compute demand, and network connectivity. Skype makes it all seem easy but it isn't.

Media access. Many services don't let you manipulate IMs, audio or video during a live session. Others won't let you get them after a session. Your Office 2.0 application may have excellent reasons for touching those streams or files, solving real customer problems.

Widgets and other user-facing components. I'm still surprised at how many Voice 2.0 vendors don't make it simple for designers to add talk without knowing three programming languages and four APIs. Delivering Talk in ready-to-install UI components expands reach and embedability. 

How does Skype fit in?

Skype doesn't. This is an architecture Skype cannot deliver today.

Should Skype strive to? I believe so.

Skype's downloads earn a measure of customer lock-in. But downloading is a barrier to adoption, a problem as people use multiple devices in their onlives, and an inconvenience. Browser-based talk solves these problems for Skype's own customers.

Should Skype offer white label talk?

Others are quickly filling that gap. Jajah has 9 white labeled users for each Jajah branded user. SightSpeed is very successful in private labeling and co-branding its services. Jaduka only delivers wholesale talk. BT/Ribbit has embedding as its charter. Voxeo is years ahead of Skype on its voice platform.

An embedding strategy is within Skype's reach.

The theme of 2009's Office 2.0 conference?

I'm betting on talkification.

tags: skype, jajah, sightspeed, jaduka, ribbit, voxeo, talk, talkification, talk 2.0, office 2.0, talk20, office20, embedding, embedability, voip

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Josh Silverman on Skype's next five years

Skype CEO Josh Silverman wrote Five Years of Wow, reflections on Skype's history and promise. About the future...

When I think of the future, I think of Skype as liquid communication. Instead of being condemned to a frozen shape like the telephone, it will flow into any device whenever you want and wherever you are. And, like water can turn into ice or steam, Skype can shift its form to match what you need at the moment: from voice to video to IM to SMS to filesharing.

Skype blurs the line between the real and the virtual. It bends space and cuts through time. Today, when a conversation wants to be had, technology is not the bottleneck. But technology isn't the goal either. There's no question in my mind about what stands at the heart of the communication revolution. So, as we celebrate the first five years of Skype, let's raise a toast to the human desire to connect.

tags: skype, josh, silverman, joshsilverman, liquid communication, future

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Three big milestones in Skype's fifth year

Skype's fifth birthday is 29 August. As we count down, two huge milestones changed Skype's future in the last twelve months.

The bad one happened last month.

29 July 2008

BT buys Ribbit
natural monopoly
talk for all onlives

1. BT purchased Ribbit.

Ribbit is the platform play Skype might have been. They are ready to start scaling. And now they have the money, customer base, telecom core, and international operations to reach their potential.

Ribbit seeks to become a natural monopoly for the web's talkification.

Like Skype, Ribbit worked for years to build a software and network infrastructure that combines user computers, phone networks, commerce, social networks, and the Internet.

Skype treats voice like an application, where you control the user experience to control the end-customer relationship.

Unlike Skype, Ribbit thinks of voice as a feature. Features belong in other applications. Developed by the six million people who design and code software. People who solve problems in every country, in every culture, for every situation.

And those people don't work for Ribbit.

Or BT.

They are in the wild. Out of control.

Both BT and Ribbit are happy with that. 

Happy not to control the user experience.

Happy not to control the customer relationship.

Once upon a time (a few world wars' ago) the phone company provided your phone. One model. And it was black.

Then the phone company became a carrier. And you could use whatever phone you liked. Even pink ones for princesses.

Today you can get your Skype any way you like it, so long as it is Skype's user interface.

Ribbit will let you get your phone any way you like it. Period.

Made by anyone who can code.

That's what it means to have a public platform culture.

And Ribbit is bringing that culture to BT. And BT is grooving on it.

The race to add talk everywhere heated up.

The frog is no further ahead in the race, but Ribbit now has the fuel to execute on its vision.

And Skype is catching up but remains far behind.

Ribbit/BT is far from the only company building and selling web talkification infrastructure, but they are one of the few with customers, with funding, and a with a compelling architecture.

Exactly how many talkification infrastructure APIs will programmers learn? That's how much room there is in the market.

 

3 March 2008

"Thank God for Skype!"
-- Oprah Winfrey

2. Skype Sponsors Oprah's "A New Earth" Web Event.

Some people are more influential than others. And then there's Oprah Winfrey.

"Thank God for Skype!"

You can't believe what Oprah's unpaid endorsement and personal enthusiasm has meant to Skype in the United States.

Name recognition is up.

Anxiety is down.

Use is up.

Producers Skype speakers into the studio.

Reporters Skype from the field, including the Democratic and Republican conventions. 

People drag their social networks onto Skype. Friends and family and workplaces don't want to be left out. 

No mention of VoIP, not even of voice, just video calls. Video became the reason you use Skype.

This was a breakthrough moment in Skype's last hold-out market. The ice has been broken.

How will Skype continue the conversation with the United States and Canadian publics that Oprah started? 

 

1 October 2007

free from buyout cuffs
visionaries innovate
skype breathes free again

3. Niklas Zennstrom Steps Down as CEO of Skype.

This was a great thing for Skype.

It broke the bonds eBay put on Skype.

They didn't mean to, but when eBay offered Skype's founders US$1.7 billion if they hit sales and census targets, eBay forced a myopic tunnel vision on the company.

Any new hire, new feature, new product, new partnership needed to advance sales, to advance user adoption. Any new idea or opportunity, no matter how strategic, that didn't meet that payout test starved for management attention and resources.

So the Skype products didn't change much for two years.

eBay paying off the founders and writing down the purchase left Skype with a fresh start. Free to innovate and reengineer. Free to respond to competitive threats from phone companies (like BT). Free to experiment and examine Skype's underlying purpose and value.

Proof?

Look at the new Skype directory. Hybrid web service and rich client.

Look at how the new Skype 4 beta client is running on top of a Skype for Windows 3.8 engine, further separating UI from services, the way you must to deliver talk via browser. 

Look at Skype hiring leaders from outside the phone carriers with street cred at Evite and Motorola.

Look at the coming Skypecasts service retirement.

Each of these decisions speak to a company liberated. A company becoming decisive and thoughtful in its direction.

Very good for Skype.

 

To recap:

A bad day: Skype isn't even in the paradigm-shifting race to talkify the web

A good day: Skype's US and Canadian markets are warming nicely in Oprah's glow

A great day: Skype freed from golden shackles.

 

Doesn't year six look interesting?

 

See also:

• Video of Ribbit's Crick Waters describing the Ribbit platform ("the voiceware economy") at the Emerging Communications Conference earlier this year. 20 minutes.
  
• Video of Trevor Baca of Jaduka at eComm. Jaduka offers much of the same infrastructure.
• CNN Joins Oprah; Puts Skype in the Picture

tags: skype, ribbit, ebay, voiceware, bt, telephony, voip

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Blogger interviews Julien Decot, Skype's director of strategy

This is a candid interview of Julien Decot by Jeremy Berrebi. Here are the questions, with some help from Google French-to-English translation.

1. What's the secret to your success in working at the world's leading net jobs?

2. Some figures on Skype?

3. Version 4.0 has been released. What are the main objectives?

4. What about the quality of Skype? Is it possible to further improve the quality of voice and video?

5. How will Skype be in 3 years?

6. What is the main competitor of Skype? Which one can take more shade to Skype in the coming years?

7. What is happening with Skype on mobile? Will you offer a Skype application on iPhone?

8. Do you think cell phones will be integrated into VOIP offers from three major french operators in one year? If so, obviously must we expect a minor webmobile revolution, be it in Blackberry or other iPhone?

9. If I remember rightly, one of the objectives of the acquisition of Skype by eBay was the integration of Skype on eBay ads and using Skype as a means of payment for small transactions. What about these two projects excited you at the time?

10. What's up with the payment between accounts via PayPal? Is this function properly used?

11. When will you be creating Skype shops powered by Zlio [an ecommerce service]?

12. Is there an advantage for Skype to be part of a group like eBay?

13. Is the future of Skype in the enterprise?

14. When will we see premium services such as "Call Management Center" in Skype?

15. Why does Skype not open its source code? (thus easing integration with professional CRM applications)

16. In newer versions, can a company deploy Skype without risk of using its full bandwidth (supernode)?

17. Why is Skype green?

18. Is Skype is ready to sponsor "blog words" podcasts by Presse-Citron made via Skype conference?

19. My feeling (purely an impression, I do not know the facts) is that Skype cruised for a number of years now, especially with the democratization of the "box" (that Free pioneered). Is the company aware of this phenomenon and how to account react? What is the future, what are the new challenges for VoIP?

20. Why not integrate (stop me if I say silly things if it is already) a function of recording audio conversations directly in the software without needing to use plugins (paying…). To make Interviews, for example, I remember having encountered this problem some time ago. Is this a legislative problem?

21. What is the real business model and how does Skype think it will monetize these future products / services?

22. The turnover of Skype must move from 60 to 200 million dollars [quarterly] (says the press). What areas of development have you chosen to achieve them?

23. Will Skype move to "free" calls to fixed lines (in France, Europe and other countries) as the free ISPs currently offer Skype with 60 minutes free per month? SkypeIn free?

24. What do you think of Loîc Lemeur's Seesmic project and do you see an advantage? an opening?

25. What's going on with the integration of video platforms into Skype?

26. Will we soon be able to post a video conversation on YouTube immediately with a single click?

Just a select few answers.

Stats...

It was officially 338 million users around the world.

The last quarter, about 29 million people across the world opened a Skype account.

It represents more than 5% of any long-distance communications throughout the world

Last year it made income of approximately $ 400 million. The last quarter, our turnover has increased by 51% over the same quarter in 2007 while generating a double-digit profitability.

Good to be in eBay?

Absolutely. Skype is now much more professional thanks to its integration into eBay. And at multiple levels: IT, Systems, HR, Legal, Finance, eBay has enabled Skype has become a global company with process, a world level team, while retaining the agility of a large startup. For example, PayPal has been a crucial partner to help us improve our system of payment on a global scale. In the same way, eBay has enabled us to attract top level talent at all levels. Our CEO is from eBay, for example, as are many members of the team Skype at all levels. Finally, and most importantly for us, eBay provides us with its unwavering support in this period of expansion and investment that we live at this time.

About Skype and enterprise bandwidth...

I can tell you that we have deployed Skype through eBay, or about 17000 employees throughout the world. At Skype, we rely almost 100% of our communications on Skype. From this point of view, we think Skype can already apply in the field of business, it's so secure. Each day we learn that large new accounts seek to deploy Skype on a large scale.

Competition...

We think firstly that the growth of Broadband is a good thing for us. From a strategic point of view, the rise of "triple and quadruple plays" will also push us to differentiate ourselves faster and not content ourselves to be less expensive. Hence the importance of video in our strategy, and to provide Skype beyond the computer on the mobile and other platforms. For example, we are already integrated on the Sony PSP and we are working with Intel in their Mobile Internet Device (IMD) platform.

My questions, following up...

1. How do you reinvigorate Skype's five-year-old brand?

2. How has Skype changed as a company since the founders left?

3. What capabilities might Skype buy through M&A?

4. How do you frame the opportunities for cooperating with legacy telcos (like the Skypephone alliance with Hutchinson/3) vs. competing with them (like US telcos lobbying congress for protection against Skype)?

5. Skype's technology architecture has built-in strengths and weaknesses which let it grow to this stage. What technologies must change for Skype to grow ten times in active users and usage?

6. What is Skype doing to talkify the web?

7. Are Skype's underlying technology prerequisites for (midband access, fast cpu, multicore cpu, desktop OSs that reserve resources for media apps, high end webcams, consumer routers that enable vs. hinder Skype) growing fast enough to support growth?

8. How are web services and platforming (think Ribbit) changing consumer VoIP?

9. Enterprise IT has a long checklist of features they demand, features they see in Cisco/WebEx and Microsoft products. Will Skype comply, increasing product complexity, integrating into enterprise telephone, billing, and identity systems? Or will Skype remain a team-level product?  

10. Skype rose to fame on an instant messaging design. Which post-IM UI metaphors make sense? How many designs can one team support?

11. Human customer service is expensive. Does Skype have a paying customer service problem?

12. If Skype picked up 29 million new users in the last quarter, how many existing users stopped using Skype last quarter? Beyond the 29 million, how many people used Skype in the la