MS Skype

By

“MS Skype”
Does that sound weird to anyone else?

The MS Skype thing is big for a lot of reasons. One obvious BIG reason is the valuation – $8.5 BILLION for a company that is losing money and the vast majority of its “customers” don’t pay a dime. It’s big because it may actually be worth it. At a time while so many VoIP vendors are hurting – the Skype investors are laughing all the way to the bank by giving away free VoIP.

I’ve been writing/talking about MS Skype now for a few weeks.

Things were just beginning to settle, when this Skype Asterisk thing broke loose.
Skype For Asterisk Was Already Dead.
That story is much sadder – because killing off Skype for Asterisk is a step backward.

NoJitter.com asked for a Skype for Asterisk piece – and I ended up taking an approach that surprised me. The post was titled Skype, Asterisk, and Microsoft and reflects an evolving perspective toward the value of Skype. I really feel that killing off Skype for Asterisk is a tragedy, not just for Digium, but Microsoft as well and I hope Microsoft resurrects it as well as other rich interfaces to enterprise communication systems. More on that separately.

Here are some general conclusions regarding the deal:

  • Microsoft isn’t dead. They’ve been easy to dismiss with their arrogance and misfires – but there are some very smart people there, they have a lot of cash, and Office is a powerhouse.
  • The acquisition will be remembered as the clearest indication of a major transition in technology. Microsoft became a huge vendor by selling software – the tech giants today don’t sell software – Facebook, Twitter, Google, Amazon, Salesforce – either rent software or give it away. This is not a trivial transition.
  • VoiP isn’t dead – far from it. Skype posted a $7 Million dollar 2010 loss and still fetched a premium valuation. The term VoIP isn’t so cool – but real time communications is where it is at.
  • Skype executed magnificently on mobile – multi-platform, multi-carrier, multi-national, multi-modal.
  • Skype is about to experience radical change – new owners should be enough, but I think Microsoft’s plans for Skype are very different than its current plans. I also think Government scrutiny and regulation will be turned up on Skype – little upstarts are one thing – mega corps are another. It won’t be just here in the US either – Skype is going to be hiring a lot of lawyers and lobbyists over the next few years.
  • The media keeps saying the success of the transaction won’t be known for a couple years… I disagree. The success and brilliance of the transaction is known now – I applaud it. Microsoft buying Skype took vision and courage – that’s why it was so unexpected. Over the next two years we will judge the execution and reaction – that may or may not be a success.

Dave Michels