Real-Time with David Gurlé

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[Originally appeared on NoJitter on October 4 2011]

David Gurlé, most recently of Skype Enterprise, is having a great time in Palo Alto, California. He left Skype last June soon after the Microsoft acquisition was announced, and he is currently taking some time off. He can’t recall his last break. He’s taken up flying, and just got his pilot license this month–he plans to be instrument-rated before the year’s end.

David, a native of France, has spent the majority of his career in telecommunications. He was a Technical Officer with the European Telecommunications Standards Institute (ETSI), and had a stint at VocalTec as a Corporate VP focused on alliances and standards. In 1999, he joined Microsoft, where he founded its Real Time Communication Server business and ran it as the unit manager. He held both technical and sales leadership roles at Thomson Reuters for about four years, and most recently held the position of General Manager and VP of Skype’s Enterprise Business Unit.

Right now, the most stressful issue David is working through is what type of plane to get after he completes his training. He is leaning toward a Cirrus, but is also drawn to the practicality of a larger turboprop.

David and I met in person at Enterprise Connect 2011 where he delivered a keynote presentation. I saw David available on Skype, so inquired what he was up to. As usual, he was happy to converse; it went something like this.

DM: When you joined Skype in January 2010, did you see an $8.5 billion valuation as a possibility within three years?
DG: It is hard to put a number behind a company’s assets, but here is what I saw when I considered joining Skype in January. I saw a company that was becoming synonymous with calling on the Internet: “I am gong to call you” versus “I am going to Skype you.” I saw that happening in the consumer market, and I was hired to bring that experience to business users. When you sit on an asset that has that capacity to transform people’s lives both intellectually and emotionally, and helps people be more productive, you realize the value that you create is truly exponential. That was my first assessment; then I considered how this value translates into revenue. When I saw Skype’s growth, specifically the Skype-in and Skype-out services, I saw impressive performance and growth. The third consideration that impressed me was how Skype was open to new business models such as advertising, and targeting the business market. When you put all this together, you realize you are sitting on a goldmine. I didn’t know the value, but knew it was going to be high.

The Microsoft acquisition was totally unforeseeable; at the time we were heading down the IPO path. I think the acquisition of Skype was great for Microsoft and overall. I think Microsoft got a great asset at a fair price. Additionally, Microsoft had some tax incentives with its use of European funds.

DM: Describe your vision of the future of unified communications.
DG: When I was 10, my mother and I made a video call at a fair which completely amazed me. Here we are in 2011, and that technology is now real. We benefit from it every day. The current wave of innovation in unified communications is to bring various communication modes together into a single interface, such as the instant messaging and presence framework we use on Skype every day.

Over the next 10 years the space will evolve in three dimensions. First, an improvement in quality or I should rather say fidelity. Skype has great quality, but we must go even deeper, with stereo with voice detection and speaker detection with respect to the different participants. There is lots of work taking place to improve the voice and video experience. That will take another 2-3 years to reach the masses. We need to see an ecosystem of hardware devices evolve along with the software. The trajectory could take us all the way to 3D audio in video conferences. This experience will truly obsolete the PSTN.

Secondly, the unified communications model will move to mobile, we will see more and more mobile devices that can do everything a PC can do, with equal or even higher quality. This will occur in a maximum of three years.

The third is what I call Integrated Communications. The focus of UC so far has been to bring together various communication modes. But communications in general is a function of some intent. The intent is what drives the need to communicate and today the intent sits outside of the mode, such as a document, email, PowerPoint, etc. The most natural next step is to bring the intent into the communication tools, or bring the communication tools to where the intent resides.

This is why I think Microsoft made such a great decision in acquiring Skype. Because Microsoft has a number of authoring tools, or a number of areas where there is a need for people to communicate. When you have such a ubiquitous communication tool like Skype and combine it with a ubiquitous productivity tool such as Office, then 1 + 1 equals way more than three. Now, when I am sitting in a document working through something difficult, and see you are available and can assist me, instead of going to a phone I just connect to you from the document. Not only do you know it is me calling, but you also know the context because I typed a few words that identify it. The call happens, and at the same time we see the same document and we begin collaborating. That is what I call Integrated Communications.

DM: What are the biggest barriers delaying or preventing that future?
DG: There are multiple. If you had asked me five years ago, I would have said user adoption, but users have now generally accepted alternative devices and formats for communications beyond the telephone. You have to give credit to the original PSTN engineers for making the telephone so easy that anyone could use it. I don’t think we have reached that simplicity yet in UC. There is still necessary innovation to improve ease of use.

The ecosystem needs improvement, as the Internet is nothing but a best-effort network. As a result, we have a number of associated challenges. If you have poor bandwidth, packet loss, jitter, etc. the calling experience is impacted. We need to see the infrastructure from end to end improved, and to better support real time traffic. Software vendors need to move away from a closed mindset and open up their APIs. Closed interfaces are dangerous and prevent pervasiveness. Product managers need to seriously consider opening up interfaces to allow innovation. Hardware vendors need to optimize their designs for unified communications. I think there is lack of understanding by some hardware manufacturers on how to tune their devices for unified communications with integrated microphone, camera, and video designed for communications. I don’t know what the future devices will look like, but the evolution needs to change directions.

DM: Will consumer technologies continue to drive or influence the enterprise and why?
DG: It will continue, because innovation is happening on the consumer sector faster than enterprises are able to initiate, adopt, and deploy this innovation. As long as CIOs have a desire to control costs and infrastructure, they have no choice but to create a degree of standards in their organization–effectively a firewall. This firewall slows innovation at the enterprise. There is no such thing in the consumer world. In fact, it is the opposite as consumers are willing to ditch prior investments in favor of new technology. The challenge is how to take advantage of this in the enterprise without paying the price of too many platforms to support, secure and manage. I have seen both extremes. Extremes where you can’t add anything to your PC without a three-month approval cycle, and the opposite (at Skype) where you can use pretty much whatever device you want. I think there is a balance, and we need to be moving away from the traditional model so we can benefit more from this innovation.

DM: What’s next for David Gurlé?
DG: There are two opportunities I am considering. One is my own start-up codenamed Pilatus, to help managers become better managers. The role of managers is among the most critical in a company, yet they are the most under-served in terms of advice, training, help, decision management, etc. Even when you work for excellent companies with great management programs, you are left on your own to deal with day to day issues such as reference checks, reviews, hire decisions, business plans. These are difficult areas and many people find it awkward to discuss them with their peers–so they refrain from even asking. My thought is to create a platform that helps individual managers get to the right answer. I am also considering some opportunities that leverage my skills, experience, and reputation with real time communications. There are some companies and VCs interested in my experience that deserve serious consideration.

DM: How was it to work with Silver Lake as a private equity organization?
DG: I was introduced to them as part of my Skype hiring process. I worked closely with Charlie Giancarlo, and ever since my first interviews to even today I was impressed. I can tell you, the Silver Lake Value Creation Team is staffed with some of the brightest and nicest people I’ve ever had a chance to work with. They have a genuine desire to create value, and we worked hand in hand. If I look at Skype from eBay to the present, I think Silver Lake deserves a lot of praise. The board, led by Silver Lake, was there to help Skype management do their best. This was much better than some previous employers where the board took a hands-off approach–placing all the burden on management.

DM: Were there any strategic opportunities with Skype and Avaya being under common ownership?
DG: I think there were some benefits. If we needed an introduction they would help us with that. They helped us to get introduced to Avaya and vice-versa. Silver Lake was always willing to create the introduction, but said we were on our own and that deals had to make sense for both organizations. We created some good synergy for both of our customer bases.

DM: Had Skype built a UC PBX interface for voice, video, and IM it could have positioned the company as a next generation carrier. But all the enterprise got was SIP voice trunks from SkypeConnect. Why?
DG: The SkypeConnect program started with the desire to address voice interconnectivity and then evolve to other communication modes such as IM/Presence, video, etc. This takes time, even with a common interface such as SIP.

When we talked with all the different PBX manufacturers–that were looking to interconnect their equipment to Skype to save on toll charges–it was clear that the priority was to standardize with SIP. Our effort with Skype For Asterisk was highly customized and didn’t scale. We spoke to the Asterisk team and they also supported SIP, so we made a decision to go with standard SIP and use that signaling for all PBXs. SIP is just the signaling, the experience can be either narrowband or wideband. We learned a lot from Skype for Asterisk, and it helped democratize the experience by opening up connectivity to all PBX systems.

DM: As telecom equipment turns into services and software–what is your advice to channel partners selling telecom products?
DG: They have to reinvent themselves. There is always going to be some sort of hardware and reseller opportunity. But there is a shift occurring toward services. The knowledge necessary is not difficult to acquire. They should not assume that all these services and software will be easy to consume. It won’t be easy, organizations will continue to need experts and handholding. Channel partners need to look at where things are evolving. They need to see how to develop their skills to assist with network quality, user experience, troubleshooting. The channel actually represents the last mile, and it’s a crucial piece. The channel will continue to have a strong value, and a bright future for those that understand this transformation.

DM: What needs to change with SIP?
DG: I suggest you ask Jonathan Rosenberg as I have not been following SIP so closely. My impression is that it is becoming very complex. This enables more features and capabilities, but complicates inter-connectivity. An increasing challenge for standardization.

DM: What is your advice to carriers?
DG: That’s a tough one. The carriers will always try to move to a world they control end-to-end. I don’t want to be too tough, but they are not on your side. The Internet didn’t come from the carriers even though they had the ability to create it. They had the vision with ISDN but didn’t have the business case to take it to the mass market.

The carriers have to earn the right to own the application. If we had developed Skype for just one carrier, it would not have been nearly as successful. Applications must be universal. All of your calls won’t be in one network. Defined balance for differentiation, but only so much. Either you know you can’t be in the application space, and be the best at being open to applications (the people that move first have the advantage). Or, if you want to be in the application space, it is universal and follows different rules that build beyond the core network.

DM: Do you think it really makes sense for the enterprise to run its primary communications over the public Internet? Without an SLA or QoS assurance?
DG: Yes, no question. Forget about penalty-based SLAs, that time has passed. It is far cheaper to solve the problem with more bandwidth and more processing power than to use an SLA approach. That is my advice to any company.

DM: What are your thoughts on Android versus iOS?
DG: The question really is which approach or philosophy is better–a horizontal or vertical approach. Both operating systems come from UNIX and share the same characteristics at the core. What is different is how Apple and Google are approaching the creation of their ecosystems. Android is too open and too permissive and falling prey to the same issues that prevented UNIX from ever becoming a de facto standard. I think Google now understands this and they are slowly becoming more proscriptive about the way Android should be deployed, installed, used, and supported. If they don’t, their huge investment in Android will bite them back. I don’t know what they will do with Motorola, but those are no doubt very interesting conversations.

With Apple, it is hard to argue with their success. I don’t see me switching from my iPhone to an Android device because the Apple ecosystem is serving all my needs. Apple created the right balance between the platform and development community. I believe the market will catch up to what Apple does. Apple may have to give-in on some its terms and conditions as a response to competition. But right now, I think Apple is winning. Even if Google has the market share numbers, Apple has the profit–and the right model.

However, no one wins forever and there will be industry shifts. It is hard to say what or when, but the current direction is toward an integrated cycle between hardware and software. As Apple does.

Dave Michels