Microsoft Mustnt Remake Skype in Its Image

By Wayne Rash  |  Posted 2011-05-11 Print this article Print


But this sudden availability of a new global VOIP network will only be successful if Microsoft is careful about how it implements the process. First, the company has to fulfill CEO Steve Ballmer's promise that the current support for a diverse set of platforms will remain. Skype can't be a Microsoft-centric communications system if the company is going to realize the full range of capabilities.

Second, the basic level of Skype has to remain free and offer no less than the feature set it currently offers. Microsoft's success with Skype depends on the numbers, and you only keep those numbers when you aren't making people pay for the service. But Microsoft also needs to make the Skype premium service something worth paying for. Right now, it's not compelling enough to be profitable. This means that Microsoft will have to improve the feature set and reliability while keeping pricing under control.

Improving the profit model for Skype may take some doing, but this is certainly within the company's capabilities. Microsoft has already learned how to make money with free products such as Internet Explorer and Live Messenger. It can do the same thing with Skype. But Microsoft has to resist the temptation to turn basic Skype into a profit center by making users pay for it. Perhaps the company should think of Skype as being like over-the-air television in which the audience is really the product that has the value.

Fortunately, there are indications that Microsoft is intent on leaving Skype alone, at least in terms of it being a VOIP system. Skype will be a separate division; it'll retain its offices in California and in Europe. The current management will stay in place. If Microsoft plays its cards right and is able to retain the current employee population, then Skype will be able to offer Microsoft something it couldn't get any other way-a global communications medium that will give Microsoft's customers much more access than they can get any other way.

Of course, Microsoft could screw this up. It could turn Skype into a Microsoft-centric product, slowly drop support for other platforms and charge more money. If it does this, and there are some who think it will, then the Skype acquisition will indeed be a blunder. But I think Microsoft has learned its lesson and instead sees Skype as the access to millions of mobile platforms and millions more users. If the company does this right, then $8.5 billion may not be the deal of the century, but it will be well worth the cost. 

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazineÔÇÖs Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.

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