How can Skype avoid becoming obsolete?

[More about Phil Wolff and this guest post below.]

Skype’s been disappointing some of my friends.

They bemoan missing features available in more enterprisey tools, a real Skype for the web app, a platform for coding Skype into our own web services, and a passion for design simplicity that makes Skype clients feel dumbed down. They long for a Skype that’s feature rich, sophisticated, customizable, part of the rest of our onlives, and as exciting as it was when we made our first call.

I relate to that ache. Skype doesn’t seem to be building its next products for me.

Perhaps it shouldn’t.

It comes down to defining what “winning” is in Skypeland. At its core, Skype is a network effects business. Winning is when everyone and everything (groups, orgs, corps, govs; bicycles, cars, refrigerators, homes) has Skype access and uses it for everything. And that Skype has a way to monetize participation in the network by users and partners.

So in a perfectly Skypified universe, seven billion people would use Skype every time they talk or write with each other.

Today, Skype has a quarter of a billion active users, and they only use Skype for a fraction of their communications.

So Skype is focused on three things:

  • more active users (which includes reducing churn and increasing acquisition virally and through partnership),
  • more activity (through better usability, features, touch points, persuasion), and
  • risk management (surviving the next waves of tech/business/social disruptions).

How can Skype avoid becoming obsolete?

Skype will be 10 years’ old in a few months. They’ve been sold a bunch of times but seem to have found their final home. They started with one version of the client, like the black Model T Ford, one for everyone.

Now they make dozens of clients on many devices and operating systems. The next ten years will make the current mix seem archaic as WebRTC and other technologies make the Skype clients just one of many to offer Skype-like services. Every app and every site will offer voice/video/IM to the people and services you connect to through them. Pocket Planes will let you chat with other gamers. Blogs will too, thanks to WordPress plug-ins.

So when the technology for making a pipe between a few endpoints is ubiquitous, the services surrounding the conversation become more important. Directories for finding people. In-chat and in-call augmentation. Archival and sharing of recordings and transcripts. Anonymity and other identity protection. Integration with other services. Integration with commerce through advertising, vendor relationship management, and customer relationship management.

Exactly how well will voice as a phone service, with phone numbers, prosper in this context? I had dinner on Friday with people trying to enable HD audio at the PSTN interconnect level, where your phone call travels from one phone company to another on its way to the callee. This is introducing wideband audio in 2013, a decade after Skype made wideband audio a free and expected service. In turn, Skype as we know it is about to become like PSTN unless it responds well to major threats.

Can Skype design a new architecture that people can trust in the surveillance-state era?

Can it find new cash sources as SkypeOut becomes less valuable to consumers?

Can it adapt to or fend off regulatory pressure in major markets to offer expensive 911 services, to collect taxes/fees for a hundred governments?

Can it make a reliable developer platform that makes basic things easy while inspiring innnovation and diversity?

Can it become invaluable to the other Microsoft divisions?

Can it help you talk to people even if they aren’t using Skype?

Can it embrace technology challenges like wearable computing and WebRTC without losing its brand?

Can Skype rebound from the trust-shattering scandal or crisis that hits every uber-large network at some point?

Can Skype do all this fast enough to keep Apple, Google, and other big players from offering migration destinations for disaffected Skype users? From small players from stealing big chunks of the userbase?

Can Skype do all this while paying attention to everyday operations and customer service?

It’s a big agenda.

[Editor’s Note: Phil Wolff formerly managed  Skype Journal, an independent blog covering Skype and IP-based communications. He still hosts a sporadically active group chat that discusses Skype and related issues. Recently he expressed on this chat a draft of what follows; I invited him to post it here.

Phil always challenges and gives you something to think about. In this case, it’s Phil’s perspective on what he thinks Skype’s challenges and opportunities could be as a Microsoft business unit in a world where IP-based communications is becoming more and more “generic”.

It was Phil who introduced me to blogging via Skype Journal; all pre-February 2009 posts on Voice On The Web were originally published on Skype Journal. Jim Co.]


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About Phil Wolff

Phil Wolff is a product manager with OpenOakland. He was strategy director at the Personal Data Ecosystem Consortium, a Small Data NGO. Phil's been involved in realtime communications as a blogger, reporter, industry analyst, technologist, and entrepreneur. Phil's an alum of Skype Journal, Bechtel National, LSI Logic, Wang Laboratories, Compaq Computer, and the U.S. Navy Supply Systems Command. skype:evanwolf,

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