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10
May
2011

Microsoft Skype tie-up: Game-changer for the Voice Market?

POSTED BY Global Administrator
Software giant Microsoft’s decision to buy the VoIP and Mobile VoIP operator Skype for $8.5 billion represents an important tipping point for the voice communications industry and will accelerate changes that are already afoot in both the fixed, desktop and mobile voice markets. Here are some implications of the deal.

First, “traditional” operators, particularly in the US, will have to move quickly to avoid their revenues being cannibalised by VoIP and mobile VoIP services which bypass their networks. This is happening already, accounting for Sprint’s decision to form a tie-up with Google Voice in the US earlier this year, but the unequalled reach of the Microsoft operating system is likely to make it happen a lot faster and in all markets all at once.

(At the moment, incidentally, the US is ahead of all other regions in terms of both the technical ability to provide advanced VoIP services (such as faultless mobile VoIP and mobile Video) and in terms of the competition that operators face.)

Next, the lines between applications such as gaming or social networking and voice services-which until recently has been a stand-alone service in its own right- will become more and more blurred. Microsoft will use Skype to integrate voice services into its email and gaming platforms, Outlook and Xbox Live respectively.

Others- rival Vonage and T-Mobile US, for example- are already focussing on providing voice services to Facebook users. Indeed, the integration of voice services into applications has become a fertile market in the last eighteen months or so: VoIP company Vivox, for example, calls itself a voice platform for the Social Web. The company claims over 50 million (white-labelled) users in over 180 countries, reaching call volumes of 3 billion voice minutes each month. Customers include T-Mobile, CCP Games, Linden Lab, Nexon, Sony Online Entertainment and Wargaming.net.

Other implications? Well here are two: the acquisition could well have a positive impact on how the business voice market develops, with the extension of PBX functionality to the mobile device (through Windows Mobile). Skype, interestingly, launched a business VoIP product about a year ago called Skype Connect 1.0 to offer IP-based private branch exchange (PBX) also called Unified Communications (UC).

Video functionality, whereby users are all linked via video feeds at the same time (known as telepresence), is also likely to be on the cards from Microsoft, now it has Skype’s video-calling expertise, bolstered at the beginning of 2011 for the mobile platform by the acquisition of the mobile video calling company Qik.

From a practical perspective, the best way of seeing how the market might develop is to imagine a cross between Skype and Outlook which allows voice and video calling, the ability to forward video calls to others, all integrated into the desktop. That may sound futuristic now but one company, ooVoo, does most of it already.

One further thought: though the devil is in the detail, if one considers the Skype acquisition in the context of its recent alliance with Nokia, it could put Microsoft firmly on the mobile map, a position it has been wishing to create for itself since it launched Windows CE, its first mobile platform, some 14 years ago.