Stuart Henshall

Platform Revolution at VON - Impact of the Deal

September 22, 2005 10:31 AM

Topics: observations

Has VON lost its sense of direction? Have two events 1) the purchase of Skype by eBay and 2) the aftermath of Katrina reframed the market... Yesterday I thought so. VON presenters found it difficult to find their footing. Presentations had seen hasty revisions from Jeff Pulver's "Summer of Transformation" to Brad Garlinghouse's reference to "pink elephants". However, there was no answer to what next and what the rallying cry should be. In fact the audience appeared confused as well. We talked to Brad later in the day and I'll write that up separately. His point was "the consumer is the ultimate judge".

In the halls there are few conversations that fail to reference eBay and Skype. Here's my take on how direction and the playing field has changed...

In a nutshell it is a collision of the communications industry and software giants. My take of the shift is that Skype, AOL, MSN, Yahoo!, and GoogleTalk are no longer going to be managed as applications. It's now time to think of them as platforms. (Hey I know MS was already a platform etc.) So it is time to consider the implications of this group developing platforms to win across communications. What are the implications for Telecoms and the communication industry? Is the eBay Skype deal big enought to "shift" thinking to a new field of competition?

First up Skype-eBay has reframed how the IM/Chat industry thinks about itself. The "deal" brings together a market for commerce with a payment system with wallet potential. This creates a new and powerful platform. The downside is that eBay is more closed than Skype. The challenge for the combination is to use Skype as the vehicle to open up and broaden eBay's commerce platform.

I was also told last night that Microsoft has reorganized and folded Messenger into their platform (Windows) division. I found it interesting. Only watching will see whether or not this will result in a more open platform. However, what wins is innovating faster and having more developers. Yahoo is also working to open up API's to their developer network.

We all remain on the sidelines watching Google. How will they assemble the pieces? Too much speculation to add much. Concurrently we find that GIPS Global IP Sound is now in all major IM clients but Yahoo. Is it a new defacto standard?

What we had were IM - instant messaging clients competing for share of eyeballs and chat time. However, "the deal" means this no longer applies. Voice had already become a weapon. All chat clients have been losing share to Skype who's voice client made it more sticky. Now just as the "old guard" IM clients are starting to imitate Skype they find it has a new charter and master to serve. As it changes, everyone's perspective of the competitive playing field also changes.

So lets think about Skype as a platform. Skype's challenge is to bring three groups of developers together and rapidly expand the number working on the platform. Concurrently it must overcome some developer reservations. Thus Skype's next cards are likely to include "enabling" call transfer and working to further open up access to the core client.

Thus imagine a world in which Skype provisions their chat client to enable easy interconnect. Add to this call transfer to stimulate developers to develop SME opportunities. You may ask why do this? The simple answer is in capturing a radically larger share of developer time and innovation capital. Concurrently, when you see yourself as a platform there is no need to be so "controlling" over what the application user interface looks like. If you are Skype, with limited development resources, you can turn over the customization and building of user interfaces to the community. Oh sure you provide some basic versions. However, Skype-Trader, is different to Skype-Wallet, and something else for Skype-Mum.

MS will struggle but also respond. They too need to accelerate innovation. They are already on the back foot. However, they already have more developers. So interconnecting means they capture share for their platform as long as their developers are better. Yahoo should also welcome an interconnect.

GoogleTalk announced they were going to take the high ground and interconnect. Similarly Yahoo has shared with me that they would embrace interconnect.

So this is my call to interconnect the IM clients. It is now doing a disservice to both users and the capability to present the "new communications - conversational platform" story. Let's see the competition between software giants move to platforms. This story is also important to managing the regulatory environment. It's then MS, AOL, Yahoo, eBay countering the incumbent communication stalwarts who's only remaining advantage is "regulatory" influence.

That's something I've been learning here. The future is likely to be held up by regulation. It's a lesson the software giants independently aren't well placed to fight. The E911 and the FCC regulations post Katrina are good examples where VoIP is losing. The future for the software giants may be bleak without the ability to produce a collective story. Interconnect for chat clients is a great first step.




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Comments

Posted by: Jim Courtney at September 22, 2005 6:39 PM

Alec Saunders has made an interesting post on the Microsoft reorganization.

Of particular note is his statement about Jim Allchin's forthcoming departure: "Allchin, while he is to be lauded for his contributions to the company on the Windows front, has always been the protectionist hawk. He is the one who has most vociferously opposed open standards when others in the company have pushed them. As he departs, the flavor of the Windows organization could change dramatically."

If Microsoft opens up their API's (especially for MSN Messenger), watch for the (third party developer) innovation wheels to start spinning furiously.

Posted by: hi2005 at September 22, 2005 7:13 PM

Yes, you are right. the long list of IMs are not only applications. they are platforms, overlayed on the OS platforms, while with more royalty and commercial value. I noted MSFT acquired Groove at April, this year and its re-org a few days ago. MSFT will fight for this kind of novel platform absolutely. but, how about thosee telco's? till now, it seems there are not obvious activities to enter.

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