I use the “subscribe to a search” feature in Bloglines to turn up nuggets of interest.
Searching for “disintermediation” comes up with an article or two every day. Many of them are mine ;)
Searching for “Skype” hits the 200-article limit every couple of hours.
Anyone who thinks they can roll a VoIP strategy without taking Skype into account has lost the plot.
Some more Skype musings, since I’ve got Skype on the brain at the moment…
Skype reminds me of a consumer packaged good company. It’s more like Coca-Cola or Procter & Gamble than a telco. Their strategic differentiator is their sales and distribution method. Glugging another coke from the machine by the elevators is easier than hunting down a clean mug and boiling a kettle for coffee. P&G work hard to get their toothpaste on just the right shelf at Wal-Mart and 7-Eleven. Anyone can make sugar water and peppermint-flavoured microabrasives. Few people understand how to market and sell them.
Skype is about convenience, and putting new features within easy reach; leading users through small incremental advances in how they communicate.
You can also view Skype in two very different ways. A recent Analysys report talks about the class of “Private Voice Applications”, of which Skype is an example. This is a node-centric view of the world — Skype the PC software application. But looking through the other end of the telescope, you can view Skype as a virtual network — just at the application layer, divorced from transport.
This takes us to a more familiar realm. Suddenly we start to see all those familiar network-centric terms and issues crop up — interconnect, termination charges, roaming, vertical integration — and have some more clues as to how Skype might gain market power and their business model evolve. The word “Skype” has this fuzzy definition that blurs the corporate, product and network identities. Just because we don’t have a snappy buzzword for the Skype Network doesn’t mean it doesn’t exist.
In a similar vein, we lack another word in our vocabulary. A decade ago the Web burst upon us. HTTP as the protocol; Netscape as the user interface; the Web as the network of public HTTP-speaking nodes. SIP is an analog to HTTP. Softphones are similar to Netscape. But we don’t have a word to describe the virtual network of public SIP-speaking nodes. If Mosaic and Netscape spawned the hypertext Web, the equivalent today would be the voice “Vob”.
But the Vob is a failure to date. The number of open SIP nodes addressable via ENUM (or otherwise) is miniscule compared to the proprietary Skype virtual network. SIP has been absorbed by the telecom borg. At Sprint I watched Dynamicsoft struggle for a year to get a SIP push-to-talk engine to work. (Flarion demo’d a PTT app they whipped together in 2 days using standard Microsoft development tools, because they didn’t need to bleed low-level optimisation across various layers of the stack.) Sprint is still probably working on pointless faux-smart network reincarnations on IP and SIP. Next-Generation Voice Network? You must be kidding. Last Generation Voice Network, maybe.
SIP is history as far as the future of voice is concerned. Get over it. The Vob is dead. Shuffled off to join the big pile of dead over-complex standards. DCE, CORBA — please make some space between you, we’ve got company tonight.
Skype isn’t this decade’s Netscape either, because it isn’t substitutable; they own their private Vob — they’ve achieved what Microsoft failed to do with MSN and the Web. Yet they retain the strategic power Netscape had to reverse themselves from the client into various centralised server functions. (Yes my dears, even in P2P voice there’s a pile of trust, directory and routing stuff that some people are going to want to do behind private barricades.)
It would be a tragic mistake to underestimate the potential market power Skype is accumulating. According to Skype’s own figures from VON Canada, they’re sustaining a growth rate of 1000% a year. Just another 2 years of this growth and they would have over 200 million concurrent users online. This is not beyond plausibility given how Skype and broadband are symbiotically driving adoption of one-another; the addressable market is exploding too.
That means even if you’re a mega-telco — a Verizon or a Vodafone — you’re screwed. You can create your own Private Voice Application, and start marketing it to your early-adopter users, but who ya gonna call? Ain’t nobody but Skypers out there. Want some Skype presence in your Vodafone-branded VoIP app? Gonna cost ya!
I almost can’t believe what I’m seeing unfold in front of my eyes. This time last year I was being rapped over the knuckles by corporate security for running Skype inside the Sprint corporate network. Somehow, I don’t think they’ve got the joke yet.
Posted by Martin Geddes at 09:25 PMTrackBack URL for this entry:
http://www.telepocalypse.net/cgi-sys/cgiwrap/mgeddes/MT/mt-tb.cgi/453.
Listed below are links to weblogs that reference The telecom earthquake:
»
Martin Geddes: SIP is the CORBA of VoIP from North American Bandwidth News
Martin, nails it as usual. Skype rules, SIP s*cks, might as well get used to it. The only way to ...
[Read more] Tracked on April 21, 2005 03:59 AM»
http://werbach.com/blog/archives/2005/04/it_would_be_a_t.html from Werblog
"It would be a tragic mistake to underestimate the potential market power Skype is accumulating." So says the always insightful Martin Geddes. He's right, and yet this mistake is still quite widespread....
[Read more]
»
Skype & Telco Disintermediation from Zmetro.com
Martin Geddes:It would be a tragic mistake to underestimate the potential market power Skype is accumulating. According to Skype’s own figures from VON Canada, they’re sustaining a growth rate of 1000% a year. Just another 2 years of this g...
[Read more]
»
Skype & Telco Disintermediation from Zmetro.com
Martin Geddes:It would be a tragic mistake to underestimate the potential market power Skype is accumulating. According to Skype’s own figures from VON Canada, they’re sustaining a growth rate of 1000% a year. Just another 2 years of this g...
[Read more]
»
SkypeOpen service from noirExtreme
I've always been an admirer of Skype. I track the progress of the company since the launch of their first beta in 2003, praise their product in every occasion and yet I haven't adopted Skype.
Skype is about reinventing telecommunications, not ju
[Read more] Tracked on April 22, 2005 10:14 AM»
"SIP is history" from NQR: Quickies
"SIP is history"
[Read more]
»
Martin's Skype Stirring from Skype Journal
Martin Geddes wrote two posts that are must reads for those not shy about thinking, promoting, or strategizing on Skype. Down under we used to say just "stirring" like stirring the pot. He's doing a little more than that. In the first post he points ou...
[Read more]
»
SIP is Dead...Huh? from James Seng's Blog
Okay I admit I have been slow in the catching up with my blog last week. Tomorrow.sg is taking quite a bit of time (which btw, is coming along pretty well). But in my semi-absent last week, is taking quite a bit of time (which btw, is coming along pretty well). But in my semi-absent last week, [Read more]
Tracked on April 24, 2005 03:16 PMYou know, I still don't think I'm quite up to the level where I can post here, but if I don't try I don't think I'll ever get there :) You've done a lot of really considered thinking on this topic, I'm just starting.
I wonder if you aren't missing the allure of SIP to telcos. To me SIP isn't about VOIP, I think you are correct in that the real value of VOIP is effectively 0. I think SIP is going to be about services, and offerring as many of them as possible to as many people as possible. Call it the long tail, whatever term you want, the money is in abundance, and I think SIP can be leveraged to extract that in a way that Skype cannot. 3G specs have that advantage, and they continue to evolve.
I haven't personally used Skype, although from what I've read it's extremely good at what it does. But as a platform for service delivery from carrier's telcos, I have my doubts that it is attractive to the telcos. SIP also has started to work on what has to be the only issue for telcos in my mind, charging. If you can combine infinite service with selective charging, I think you've got a formula that telcos can sink their teeth into.
I also don't buy into the thought that ISP's will always allow unregulated access over their lines for Skype. Federal regulators here are also requiring E911 access for VOIP, if that becomes the rule here then life for Skype will become that much harder.
Like I said, I feel a bit underqualified on the topic as yet, but that's a start. :)
John.
Posted by: at April 21, 2005 01:23 AMSkype is freaky: your comment that it's pure application divorced from underlying layers is dead on. I wasn't much interested in Skype, but five minutes with it completely changed my world view. Even though I also have an unlimited VoIP long-distance line (through my local DSL provider, so the quality is ensured through packet shaping), I call my dad a few hundred miles away via Skype. A recent day, I talked to a friend in Ireland, a colleague in New Zealand (a week before, we used Skype's IM while he was on a Connexion by Boeing equipped plane), and a colleague in Germany.
Nobody made an extra cent from us. The quality of the connection was better than voice: they use a wider frequency range so the sounds really sparkles on good Skype-to-Skype feeds.
I've bought both SkypeIn and SkypeOut services, too: they work better than cellular in my office. I guess my cell phone was listening to Verizon's CEO the other day.
Posted by: at April 21, 2005 04:13 AMLooking a current growth rates and extending them indefinitely into the future is dangerous (remember Internet traffic growth forecasts).
Keep in mind that talking on PCs is destined to be a small portion of overall usage. Your parents may do that, but mine certainly won't. Skype's current flaw is not technology, its human behavior.
Watch the change in growth rate of peak online users. If its decelerating, the peak is near.
Posted by: at April 21, 2005 05:20 PMGlenn Fleishman:
5 minutes with many voip apps change many's world views on a daily basis. You just happened to find skype before another,,,,in other words, its not the only one that works as well as it does...its not the only one that makes a newcomer say "Holy @$@$, I'm talking for free!
they (skype) have some strong viral shiyat happening...thats 1 story.
The other story here is: will skype last?
Too early to tell, but keep this in mind...this aint the same as kazaa. No free reign here and even that little project made the US a no fly zone for Niklas (of skype fame).
Story 3 is that this is one hell of an industry unfolding here,,,I dare say that some blog creators will be either "made" or "unmade" by the comments they make in regards to the subject;-)
I like my odds on this bet much moreso than the odds of skype being the be all end all of voip as we know it.
craig
Posted by: at April 22, 2005 02:23 AMI'm sorry. I don't get all the Hype. Before Skype, I was able to find apps that let me talk to to another computer over IP. I seem to recall doing it with YIM, AIM and MSN all before trying Skype. Net2Phone predated SkypeOut by how long? Yes, what Skype does, it does well. I had to bag the SIP phone and use SkypeOut on the last trip to Europe. Was glad to have it. But to say SIP is dead is to ignore the larger picture. What protocol do you think Skype uses to connect to Level(3) voice gateways around the world? Do you see Cisco, Avaya, Lucent, etc all clamoring to incorporate the Skype protocol into their VoIP products? No. It's H.323, SIP, MGCP and a host of other vendor centric protocols. To say "SIP is history as far as the future of voice is concerned" shows a lack of understanding of who controls the future of VoIP. It's the standards committees and the vendors that make the equipment and software needed to build VoIP networks. It's about open standards and interoperability. Using voicemail from CompanyA and call control from CompanyB with CompanyC's PSTN gateway and tying in CompanyD's desktop application to the voice call. And that's where SIP trounces Skype as Companies A-D can use an agreed upon protocol to exchange the needed information to make it all work seemlessly.
Posted by: at April 23, 2005 02:50 PMThe future looks extremely bright for VoIP.
But what nobody sees is that we are slowly passing from one monopoly to the other.
It is true, it is wonderful Skype Ip to Ip is free, but if you want to call an IP number on Skype's network, YOU MUST BELONG to the Network.
If you belong to the Vonage family you can call somebody on the Skype family, but you HAVE TO USE A TERMINATION, that is, you must at the end pay what they now call the "Roaming".
Yes, it is cheaper, it has another name, but it is still the same business model as before.
Do we really want this?
Do we really want many proprietary Networks or wouldn't we prefer a real FREE market, where everybody can call everybody, because everybody is using a STANDARD CODEC which not only is understood by his gatekeeper, but also by another gatekeeper using the standard codecs.
People should be aware when they buy a Hardware that they will be able to use it JUST with that provider and will be chained for life (or at least for the life of the hardware) to that.
This is a most important issue that nobody wants to discuss.
Because it is not convenient.
When you want to change a system YOU MUST PROPOSE something different.
Not only a CHEAPER copy of the existing one.
VoIP is not a "new telephone service".
The infrastructures are already there, they belong to the customers.
The customer doesn't need a "new Network", he already has a Network, it's called Internet and if he buys an IP phone, he just needs a gatekeeper to direct his calls and nothing else.
But he needs a Standard codec, he needs to call people who connect to his gatekeeper and people who connect to any other gatekeeper.
He doesn't need to pay "in" or "out", he wannts to stay IN THE NETWORK from a to z.
It is true, in the meantime, not all are connected, but do we need to connect to Skype?
Is everybody blind?
SIP is not dead, H323 is not dead and they will be more alive than other proprietary systems.
We began the war against the dinosuarus and slowly are replacing the old with news (even bigger).
VoIP is a big chance to build another world, where millions of small providers will take the place of a few big corporations.
Let's not loose the chance.
Patrizia
The real problem is, that there are very few publicly addresable SIP URI.
But Skype is definitely not the right answer - because it's just another telco-like proprietary SERVICE.
Users will find out (sooner or later) that the whole Skype boom is just another clever marketing of the same old principles.
At the very beginning of Web, there were also only few servers providing very limited content probably not interesting to the general public. But as time went by, the number of Web servers exploded dramatically and the content has changed to exactly what users expect and need.
The same needs to happen with "Vob". The lack of publicly available SIP URIs could and would not be fixed by Telcos, ISP, Skype and the like. But it doesn't mean that Vob is effectively dead. Instead, the companies offering products and services to the general public have yet to realize, that it's in their interest to provide a public SIP URI to be reachable at no cost by their customers. I.e. what they are currently doing with freephone 0800 numbers (which cost them money every month) is also doable via public SIP URIs at no cost. The same principle could be applied by public institutions (schools, cities, etc.) giving them the opportunity to call each other for free using their "normal" phones and PBXes. Once the number of public SIP URIs increases, Vob will become reality and Skype will be dead.
Posted by: at April 27, 2005 01:23 PMMartin,
I'm late to the party but as usual find what you have to say compelling. From reading the comments, some agree, some disagree, and some plainly are at too low a level to understand.
I tend to agree that the growth rates can't continue, that the fuel of early adopters is burning up rapidly. But I also know how companies evolve and grow. Skype has many examples to follow in holding onto and building share as they cross the Chasm.
You say Skype isn't Netscape, that they own their own Vob. You're absolutely right. Skype is AOL.