Picked up the three Toronto newspapers Monday morning; each had the front page headline about the executive changes at Research in Motion that were made public late Sunday night, (I was caught up watching the 49’ers – Giants NFC Conference overtime final that ran rather late and had taken time off from the Internet.)

It’s been some time since I wrote a post about RIM and Blackberry. In fact, the last one was about the announcement of the appointment of long-time acquaintance Alec Saunders as Vice President, Developer Relations. Alec has certainly made an impression with developers as shown on Twitter; the comment on the right showed up yesterday morning.

Yes, I caught up with Alec at CES where I was not only able to check out the Playbook OS 2.0 but also got to have a look at the Porsche equipped with QNX firmware and three Playbooks. But more importantly was how attending CES – not at the booth but in discussions as I walked around the show – reinforced my conclusions after watching RIM’s quarterly report last fall, when they announced delays of the launch of the new OS 2.0 for Playbook. At the same time I was reading the Steve Jobs bio and how he made sure that product showed up on time. I also have had a chance to check out the current Playbook – great hardware but lacking in applications that make it a “must have” to carry around. And there’s my own experience over the years not only observing technology business restructurings but also participating at a senior management level in a NASDAQ-listed company restructuring with all the associated performance pressures. The technology may change but the business management issues don’t. The bottom line was that RIM had significant internal operations problems showing up publicly as an inability to execute. It only got further reinforced by the December announcement of delays in the launch of a QNX-based Blackberry.

Here’s my viewpoint:

1. As became really obvious after announcing the delays not only of OS 2.0 for Playbook but also Blackberry phones , the number one priority for RIM is to fix the internal processes for managing execution to deadlines. Reading the Steve Jobs bio at the time of this announcement (and having had my own experience working under a “driven” CEO) brought this point home. Steve simply would not let a deadline be changed; he may have been a bit off the deep end and erratic at times but he ensured that Apple had the execution leadership and team required to meet deadlines.  The first benchmark for the “new” RIM will be the launch of OS 2.0 for Playbook in February; certainly the demos at CES looked promising. And the recent price reduction on Playbook simply became a way to seed 800,000 units in preparation for the upgrade (aside from getting this hardware off the inventory line of RIM’s balance sheet). Those 800,000 users are now positioned to provide their own feedback.
2. The second benchmark was reinforced by the new CEO’s comment made in 2005 while at Siemens about the future of smartphones: “The end user is not concerned with the technology behind the service, they’re concerned with the applications they can get.”  About the same time over six years ago Alec Saunders wrote his “Voice 2.0 Manifesto” where he emphasized that “applications are the value creators”. And I have to say that my experience with the Playbook 1.0 was underwhelming. While it possesses great hardware and there have been some interesting applications, it lacks not only the number of applications but, even more importantly, some critical applications. So my second benchmark relates to application development:
   1. We need to see some critical common applications, starting with Skype which badly needs a mobile platform that supports true multitasking and battery management. Dropbox and Kindle for the Playbook are two others that should easily be able to take full advantage of QNX’s inherent multitasking and multiprocessor functionality. Yes, you can access some of these, such as Dropbox, via a web browser but it’s not the simplest user experience. Skype would make it possible to converse with any of their over 200 million active users on any platform. In today’s communications and social networking world Skype is critical to any communications platform.
   2. We need to see an evolving base of third party applications. As Alec pointed out in his presentation at RIM’s North America developer conference last fall, RIM’s developer program for Blackberry phones has been actually the second most successful smartphone in terms of revenue generated for developers. Other developer conferences in Singapore last fall and Amsterdam next month are indicators of developer enthusiasm; certainly attendance at Singapore demonstrated significant attention in the southeast Asia market – and the Amsterdam developer conference is sold out. But there are several issues that need to be addressed to facilitate developer interest including legal ones (make the agreement short and simple) and having a sufficient tool set in a decent time frame that encourages developers to participate in new product launches. (Alec did acknowledge some of these issues at his presentation last fall.)
   3. BlackBerry App World needs significant improvements. Yes new versions have been coming out but… Having to reboot the device when installing certain new programs or upgrades does not cut the mustard. It must also be able to handle multiple upgrades on a single action. iOS certainly sets the benchmark here in terms of the user experience.
3. Thirdly  there is the expectation that there is some “Messianic” Steve Jobs out there who can solve RIM’s problems as CEO. It ain’t goin’ to happen; there was only one Steve Jobs. Recently we have seen examples at, say, Yahoo and HP, where bringing in “experienced” CEO’s has been a failure. Appointing someone with internal experience also brings along an exposure to RIM’s processes and personnel that allows more rapid implementation of internally required changes (such as execution). Tony Bates at Skype has also demonstrated that it helps to bring along a combination of both technology expertise and running high tech business operations to make things happen; again his focus has been on execution. A priority on appointing the right Chief Marketing Officer will hopefully bring in significant outside experience beyond simply marketing to a key vacuum currently existing at RIM. At the same time, let’s hope the board can recruit a couple of significant “technology company” directors from, say, Silicon Valley to contribute to the experience spectrum and strategic executive networking.
4. Then there’s one other key role for a CEO: Establishing and rebuilding key business relationships is one additional benchmark for measuring the new CEO’s success. One responsibility for any CEO is to build and maintain credibility, especially when it comes to dealing with key business partners, not only major software vendors, carriers and suppliers but also with business customers – all at a CxO level.  While they certainly built a major player in the wireless industry, with all the recent turmoil it became apparent that Mike and Jim had burned themselves out. As shown at Microsoft with Bill Gates becoming Chief Software Architect (in the years prior to his retirement), it is necessary to keep on board the founding visionary in a consultative role for at least a couple of years. Mike Lazaradis can continue to bring technology experience and vision that can benefit the company as long as he remains a reference resource and not an impact on operations.
5. Finally on the issue of break-up. It’s not an option; a breakup would destroy the company. As mentioned when the Playbook was first launched, RIM has a significant portfolio of wireless and handheld device assets. It also has services such as its network operations centres that ensure both security and minimum wireless spectrum overhead. But history shows that one needs to control the entire ecosystem to have a successful product line – need I mention Apple? On the other hand RIM’s technology, especially with QNX and its user base, opens doors for unique applications (as shown with the Porsche demonstration). It’s the integrated options available that can create the true value. The challenge here is to find the “killer” apps or set of apps that can uniquely distinguish Playbook and BlackBerry as real time communications devices and not simply a content delivery device. Thorsten explains it quite well in this video:

http://www.youtube.com/watch?v=6cQyZKukGQ8

Bottom LIne: RIM is turning out to be an interesting business case study. Here’s a company that has over $20B in annual sales, $1.5B in cash, 75,000,000 users, no debt and so far has remained profitable. It has a major patent portfolio and unparalled wireless expertise in areas such as security and efficient data delivery. Without QNX we would not even be having this discussion and RIM would really be struggling – their old OS had outgrown its viability. In  some ways RIM is in a position most “startups” would be envious to be in.

Yet there’s the declining market share in its major market where it can only offer its current product line for another six to nine months; however, it’s still a major market leader in many other markets (U.K., Indonesia, etc.) Yet, by its new CEO’s admission it’s still got “traces of a startup”. RIM is certainly in a reboot stage but … can it re-establish itself with the combination of new market positioning, internal restructuring and a culture change to more disciplined operations? The real focus needs to be on fixing the internal operations as much as on external marketing. Unfortunately this was only buried in one CEO video from RIM whereas the media and analysts wanted to feed on sound bites about “no need to change the overall strategy”.

The only way to really measure performance of a new CEO is to set benchmarks. Presented here are five major ones that must be addressed in the next six to nine months if RIM is to succeed. As mentioned in this interview with a local Kitchener-Waterloo radio station, Thorsten needs time to demonstrate he can provide the team leadership required to pull this off.

Here’s a Financial Post story about a change that’s been in play for the past few months: Ottawa taking centre stage in RIM’s future.

(The Tweet above appeared as i was writing this paragraph. “Porter terminal” is the downtown Toronto airport; Bay St. is the Canadian equivalent of Wall Street.)

Full disclosure: My first interest is in seeing over 8,000 Canadian jobs (not to overlook all those in other countries) preserved but while meeting a market need. But this video also demonstrates the impact of RIM on the Kitchener-Waterloo community.

I have an iPad (and had an iPhone until it was lost recently – yes, I’ll replace it), a BlackBerry Torch 9800 and a Playbook. Having them all is necessary to fully understand the dynamics of the market. (I’ve had some exposure to Android devices and many acquaintances with them.) Apple’s record quarterly performance results announced yesterday certainly reinforce the need for RIM to find a unique market niche; even Tim Cook at Apple recognized that the Amazon Fire is first and foremost an e-reader and not a tablet competitor to iPad.

While in the past I have held RIM shares (since 1998) at the moment my holding is minimal.  I have never worked at RIM nor had RIM as a client. I have frequently visited Waterloo and its university for over thirty years and have attended most of their annual meetings during that time.

My only other bias probably arises from the fact that I also hold advanced degrees in Physics and Business; the combination of a physicist and experienced technology business person can be brutal when it comes to seeking success. You learn to pay attention to details, delegate, set goals and yet understand where opportunities can arise. (And I once worked for 18 months in Germany as a physicist in a business environment.)

Related articles

• Interview with Alec Saunders, VP of Developer Relations and Ecosystem Development (blogs.blackberry.com)
• QNX: RIM’s last hope? (business.financialpost.com)
• RIM CEO: QNX to Be BlackBerry’s Foundation for a Decade (phonescoop.com)
• CES 2012: RIM Pins Hopes on PlayBook 2 Software (forbes.com)

Alec checks out the original iPad while attending eComm 2010

About 20 years ago I was managing the Canadian operation of Quarterdeck, publisher of the very popular QEMM-386 memory manager for DOS. During that period Microsoft decided they needed to upgrade DOS to include some memory management features in DOS 5 and later DOS 6. Somehow the genius developer team at Quarterdeck always managed to stay a couple of versions ahead of the DOS feature set. But the experience also led me to meet Microsoft’s Canadian Product Manager for DOS, Alec Saunders. We jousted about our products but I also came to appreciate Alec as a respected player at Microsoft.

When I went to Los Angeles a year or two later to work with Quarterdeck on a corporate restructuring I needed to have meetings at Microsoft Redmond (don’t ask about the business reason – cause I forgot). I learned that Alec had moved to Redmond. One call to him ensured that I had the meetings I needed; we continued to cross paths as he moved on to become the first product manager for Internet Explorer (yes, Quarterdeck had a great browser – with tabs – but did not understand the Internet culture of beta testing), and we would always meet up at Comdex, amongst other shows.

Alec returned to Canada in 2000 where he worked with a successful Real Time Operating System company, called QNX – a company about which I had learned in the mid-80’s during my frequent trips to Ottawa. A year later he took up a business development position with a telecom equipment vendor. About four years later we met up again as he was considering the launch of a start-up that eventually became known as iotum with a conferencing product called CalliFlower. You will find many posts here about the evolution of CalliFlower. For about a year Alec hosted his daily SquawkBox conference call when a crowd of up to 20 to 30 enthusiasts would talk about IP-communications industry issues, meet several of the players as featured guests and contribute to the development of Calliflower’s feature set. During this time Alec gained experience developing applications for Facebook and the iPhone.

What I really came to appreciate is not only how well Alec understood the technology behind today’s IP-based communications and wireless technology but also about how well he understood the business and personal communications issues related to building a strong developer program for a platform. The combination of his Microsoft, QNX, Versatel and iotum start-up experience made him a frequent reference point for not only obtaining background on issues but also, often, my posts.

A few months ago I learned that Alec had commenced some consulting with RIM covering business development activities involving developer relations. I also was certainly having my own questions about how RIM was proceeding not only with their BlackBerry partners but also with the Playbook. It was pretty obvious that RIM was struggling on that front, especially when it came to developer relations. Alec could bring a lot to the table for RIM.

Towards the end of July I made a Skype call to Alec only to learn that he was on his first day on the job as Vice-President, Developer Relations for RIM. His initial focus is on the PlayBook, working with the QNX team in his home city of Ottawa (but probably now a frequent commuter to RIM Headquarters in Waterloo). Andy’s post yesterday made this public; the only previous external clues that something had changed were his occasional inquiries on Twitter and Facebook about how to use a MacBook Pro; it can now be disclosed why these queries were arising.

If RIM continues to hire experienced professionals of Alec’s caliber, it only improves RIM’s chances for success built around the QNX platform. Having been aware of QNX for over 25 years I learned that they have the most robust, crash-free operating system available – you can fly an airplane with it. It has several features that support true multitasking on multi-core processor platforms. QNX has a most compelling customer base as exemplified here. The challenge here is to leverage QNX’s key features and RIM’s historical enterprise pedigree to bring about a Playbook that takes off in directions that the iPad cannot touch. Suffice it to say there is a path to follow and it does not rely on being a direct competitor to the iPad. Is this a hint?.

Gizmodo defines Alec’s challenge here:

BlackBerry App World is like the sad broken-down amusement park your dad takes you to because when he was a kid it was the only place that had a log flume. You got behind with devs. You got beat. Get them back. Microsoft’s doing it—slowly, surely—with Windows Phone, and you can too. It’s going to take money, sure, but considering how many wasted investments you’ve been willing to make recently you might as well splurge on something useful.

You’ve got time before QNX makes its phone debut. Use that time to line up as many major devs as you can. Don’t just make BlackBerry a QWERTY storefront for Android apps. We have that already. It’s called Droid.

Bottom line: A strong developer relations program is only one critical component to RIM’s success. While Alec brings a lot to the table, RIM’s biggest challenge is to quickly build a disruptive platform that can become a market leader in its own niche.

CounterPath has long been known for its SIP softphone clients, Xlite and Bria. Xlite is a free PC-based softphone client which provides basic voice calling and instant messaging features.

Bria is their full-feature business grade offering which:

• Provides access to an IP-based telephone system or service from a PC (Windows, Mac and Linux), iPhone or Android
• Can communicate with contacts from multiple sources, such as Microsoft Outlook, mobile phone address books and company directories
• Provides presence status (currently PC editions only)
• Supports a wide range of business standard call management features
• Incorporates support for chat sessions, including group chat (currently PC editions only)
• Has security features that allow firewall traversal

Over the past year CounterPath has released its Bria iPhone (and iPod Touch) edition with several updates (current version 1.2.1) as well as Bria Android edition. Both work over 3G or WiFi connections. A key feature is the ability to use the iPhone or Android as an extension to a PBX. From their product description:

Using the iPhone or iPod’s existing contact list, Bria iPhone Edition facilitates easy and effective communication management with an intuitive interface that accommodates multiple calls. Call functionality includes the ability to swap between two calls, merge and split calls and perform attended and unattended transfers.

Yesterday CounterPath released Bria iPad Edition which basically can turn an iPad into an IP phone for use in business telephone systems that support SIP. Effectively it can replace a desktop IP phone but also allows you to take that phone off the desk and accompany you on your travels. Your extension becomes physically available wherever you have your iPad as long as it has Internet access via 3G/LTE or WiFi. From their product description:

Bria iPad Edition facilitates easy communication with an intuitive interface that includes all of the standard phone features such as call display, call history, voicemail indicator and multiple call support. Multitasking functionality also allows Bria iPad Edition to run in the background while you use your iPad, allowing you to reference other applications while on a call.

And from the press release, which lists in detail several key features:

Unlike other VoIP voice applications marketed for the iPad that were introduced primarily for the iPhone, Bria iPad Edition is designed specifically for all Apple iPads. This iPad-centric foundation means that Bria iPad Edition leverages the device’s large, high-resolution display, providing a richer user experience that enhances the features found in the Bria iPhone Edition.

Bria iPad Edition’s separated navigation panes make it effortless to find contact information and initiate calls. A one-touch popover dialpad is elegantly minimized yet easily accessible at all times, while the iPad’s native keyboard is also available for entering alphanumeric SIP URL/addresses.

During the past year I have set up Bria on a MacBook and iPhone, using it as one of my “phones” that is hooked up to my FREETALK Connect telephone system.  Yesterday I added Bria iPad Edition to my iPad and have done some inbound and outbound test calls through the FREETALK Connect. Effectively my iPad has become one more “phone” when using the FREETALK Connect’s “Find Me” feature where calling my extension rings a Linksys IP phone, my Skype client, my BlackBerry (via an external call) and my iPad.

I made a call with Alec Saunders who also has the same configuration; both iPads were connected via WiFi to our local LAN, each of which included a FREETALK Connect. During the call I was able to record our conversation; the screen had options for transferring the call, adding a third party and either accepting or placing another call.

With all three smartphone/tablet editions, Bria interfaces to the device’s local address book and runs in background to answer calls while running other applications. During a call I also confirmed that you can also reference other applications while the call is handled in the background. As shown in the images from the call screen it also includes features such as multi-call support, call transfer and three-way calling.

My only concern is that it requires some technical knowledge to configure with the FREETALK Connect but that is a one-time exercise. While my experience involved a business telephony system, Bria iPad Editon comes preconfigured to work with several SIP service providers and it can be manually configured for any SIP-based service.

During a call with Todd Carothers, CounterPath’s Senior Vice-President Marketing and Products, , he pointed out that one of their learning experiences with these Fixed-Mobile convergence clients was how to deal with bouncing between WiFi and 3G connections in, say, a multi-level building. Basically they will incorporate into Bria a button that provides control over this situation by moving the call between 3G and mobile at the user’s discretion. Also Bria will soon be incorporating features to support SMS messaging and video calling.

Bottom line is that with Bria iPad Edition, my iPad has become a fully-featured IP phone that can be used through an business-grade telephony system for small business from any location worldwide provided there is a wireless Internet connection.

Bria iPad Edition is available at the iPad App Store at a price of $14.99.

One final comment: I have Truphone for iPad and, now, Bria for iPad. When will we see a unique Skype for iPad? If you use Google’s keyword tool, you’ll find that “Skype iPad” (and variations) is one of the more voluminous Google search requests associated with Skype. Delivering Skype for iPad will demonstrate that Skype is continuing along its path of Skype Everywhere, even after the announcement of the pending Microsoft acquisition. (It should be noted that outbound calls made to try  out Bria iPad Edition were made over a SkypeOut service via the FREETALK Connect.)

Full disclosure: The producer of the FREETALK Connect has previously been a client of the publisher’s business development services; at this point, there is no business relationship. The publisher is opening a business providing consulting to small businesses who want to implement Skype and/or IP-based communications solutions. More details to follow next week. CounterPath’s Bria is simply one of the softphone products experienced over the past year while determining configurations that work with FREETALK Connect.

Related articles

• Bria iPad Edition 1.0 a winner! (saunderslog.com)
• Apple eases rules on iPad, iPhone subscriptions (seattlepi.com)
• Bria extends VoIP phone client to iPad (tuaw.com)

Yesterday Phil Wolff at Skype Journal brought our attention to an “infographic” from the financial due diligence-minded Credit Score Blog for Focus.com. It attempts to provide a history of Skype both from the technology and financial performance perspectives. But, in addition to Phil’s Quibbles, I have found some others.

Click on the graphic to see a larger image.

Research and Design by Credit Score Blog for Focus.com

Accounts and Users – there’s a difference!

Skype now has registered somewhere beyond 700 million accounts, increasing by over 500,000 every day. But, as has been pointed out often over the past few years, this number in meaningless since over 75% of the accounts have not been used for quite some time for at least three months. Users die, they try out Skype and give it up, a business will register new business accounts for employees who resign or are otherwise terminated. The list of reasons for not using an account can go on forever. (Unlike direct mail lists that can lose 20% of their accuracy every six months, users who move geographically can continue to use their Skype accounts provided they have an Internet connection.)

Starting with the IPO filing last year, Skype finally started to give out a more realistic number – the number of users who actually made at least one call or participated in at least one chat session in the previous calendar quarter. Whereas there were about 125 million in the April – June quarter of 2010, this number has risen to over 170 million for the January to March quarter 2011. In other words this is the number of active users.

So while Skype had registered over 100 million accounts in 2006, they did not reach the level of 100 million users until late 2009 or early 2010. It’s those active users whom become interesting to Microsoft as they work with their Skype team to develop plans for Skype’s (and Microsoft’s) growth.

Skype’s history with Video Calling – Sorting Out High Quality Video and HD Video

Yes, Skype introduced video calling in early 2006; it first came of out beta with Skype for Windows 3.1 in early 2007 delivering 320 x 240 images @15frames-per-second . However, in November 2007, Skype showed it got serious about taking the lead in video calling with the introduction of High Quality Video which required a new line of Logitech webcams, new video codecs from On2 (since acquired by Google) and a new version of Skype for Windows (3.6) that could deliver VGA resolution (640 x 480) at 30 frames-per-second and over a 384 kbps upload speed Internet connection.

With its superior quality that delivered in-your-face real time video, Skype video took off to the point where today video calling represents about 40 per cent of all Skype calls.

In 2010, with the launch of Skype for Windows 4.2, Skype announced support for 720p HD video calling; at the time it only supported webcams from two vendors: the FREETALK Everyman HD and Facevsion N1 webcams. HD video was off to a rocky start; it required at least 1.2 Mbps upload speed on the Internet connection (above the upload speed of most broadband connections) and there were call reliability and stability issues. With a firmware upgrade in December (FREETALK, Facevsion) and the release of Skype 5.0 for Windows, HD video calling has become a much more reliable service. Recently Logitech released a line of webcams that support HD Video calling. Over the past few weeks I have received HD video calls from Logitech webcams where callers had only a 1 Mbps upload speed.

With respect to the Infographic:

• Skype released High Quality Video in late 2007; they did not release HD Video until 2010.
• A major milestone for Skype video calls was the introduction of video calling on iPhones at the end of 2010.
• Finally, in early 2011, Skype took Group Video Calling out of beta, increased its capacity to ten participants and offered it as one component of its revenue generating Skype Premium service.

Microsoft Anywhere Graphic – What Happened to Outlook and Office?

The infographic attempts to illustrate all the potential Microsoft products that could benefit from embedding Skype technology and services. But what happened to Office and, especially, Outlook? At the press conference there was, to say the least, a strong emphasis placed on how Skype could be integrated with Outlook for both consumer and business use.

For Windows users, Outlook has become the core resource for managing users’ contacts; many products’ address books and scheduling features rely on the user’s Outlook Contacts and Calendars as the primary source of contact and calendar information. Outlook is critical for synchronizing a mobile phone address book, keeping the user’s schedule current and integrating Outlook information into third party collaboration services as well as many other Microsoft and third party offerings.

Full disclosure: the author’s first association with Skype involved beta testing of the Skype Email Toolbar, an Outlook plugin that allows you to make Skype calls directly from Outlook. However, the Skype for Windows client now incorporates an optional feature for importing Outlook contacts into a user’s Skype contacts, so this plugin has become a secondary offering.

I’ll place my bets on Outlook being the first or second Microsoft product to find Skype embedded into it.

Skype and Its Competition

That competition bar misses a couple of key aspects of Skype:

• Internationalization: Google Voice really only works  if you live in the U.S.; after all these years it still has no offerings for the rest of us around the world. Personally I have set up a Google Voice account during a recent visit to the U.S. but it’s of no use to me when at home in Canada.
• Technology: Over time Skype has developed some very unique technology that delivers a unique conversation experience; for example,
  • the SILK codec provides crystal clear voice on Skype-to-Skype calls, even when calling from/to iPhones and Android phones.
  • Video: Skype is unique in providing 640 x 480 video calling @ 30 fps via a simple user interface. Since its introduction in late 2007, there has been no competitive service with such a large network of users that can deliver this quality of real time video calls. And now HD video capability is starting to penetrate the user base.
  • Network connection: Skype has introduced features that monitor and adjust to the conditions of a call’s network connection such as to minimize the chance of call failure.

Bottom Line: While the infographic is a good attempt at outlining both Skype’s financial background and user experiences, it is missing some key elements that have the potential to contribute significantly to Microsoft’s ability to benefit from a $8.5 billion acquisition.

The key risk lies in how effectively Microsoft’s various product teams can work with the Skype teams to develop world changing communications-enhanced offerings. It’s a challenge to Microsoft’s ability to support real innovation. This represents the best opportunity for demonstrating Alec Saunders Voice 2.0 Manifesto where talk is the baseline, the meter is “off” and communications-enhanced applications are the value creators.

Related articles

• Microsoft Acquires Skype – The “Amber Mac Test” (voiceontheweb.biz)
• Microsoft Acquires Skype – A Most Interesting Marriage (voiceontheweb.biz)
• Microsoft Acquires Skype – Steve Ballmer Does Skype Europe (voiceontheweb.biz)
• Microsoft Acquires Skype – An Investor’s Perspective (voiceontheweb.biz)
• Skype’s Rollercoaster History [INFOGRAPHIC] (mashable.com)

With today’s announcement of Microsoft’s intention to acquire Skype, subject to regulatory approvals, Skype has received the endorsement required to be considered a long term, viable and stable service addressing both consumer and enterprise markets.

From the press conference and press release:

• Skype will continue as a brand and an independent business unit within Microsoft. There is significant value when your brand name has become a verb in the English language (and one that translates readily to all other languages).
• Skype will continue to support “Skype Everywhere” on Mac’s, Linux, iPhones/iPads, Android phones, TV and other devices – a key requirement to maintaining and growing its current base of over 170 million active users. (This was one condition of closing the deal but execution is key; the first test will be the revamp of the Skype for Mac 5 user interface.)
• Skype has a strong basic revenue generating business; at this point it should be profitable but certainly has had good EBIDTA.
• Skype now has 170 million active users (in the past quarter), as many as 30 million online concurrently at its daily peak and growing the accounts at a rate of over 600,000 per day.
• Outlook is a key initial application for integration into current Microsoft products; Microsoft Lync will be taking advantage of Skype’s underlying technology where appropriate and feasible.

My initial thoughts:

• Keep in mind that Microsoft has bought a communications software company; one of the biggest challenges will be the integration of the software development activities across what has to be at least two different product management and software development cultures.
• Microsoft brings to the table a new level of business process and product management expertise from which Skype will benefit significantly.
• Only Microsoft has the resources – technical, product and business – that can be leveraged to justify an $8.5B buyout price (and give the current investors ~150% return on their investment over 18 months). With opportunities to enhance Office products, add technology to Microsoft Lync and complement other collaboration product such as the Sharepoint platform, they can readily get their investment back within a few years.
• Skype has found a permanent home.
• Skype can now focus totally on product and service development without the distraction of seeking financing (and the associated endorsement).

Some questions:

• How will the two companies’ instant messaging services be brought together? Skype chat offers a richer chat experience, especially given the ability to rapidly escalate to a superior voice and video conversation and to provide complements such as file transfer.
• What will happen to the Skype Store and associated hardware? While Skype has supported and sold products from several hardware vendors, Microsoft’s limited hardware offering (of mice and keyboards) is sold via traditional PC hardware retail distribution channels. Yet much of the hardware has been designed, with assistance from the Skype-certified program, to take full advantage of Skype’s inherent technology.
• Skype has been attempting  to address the large enterprise market with its Skype Connect program; yet we have heard of no successes. Microsoft Lync is a large enterprise product that can probably take advantage of Skype’s inherent technology while delivering an offering that meets the concerns of enterprise communications managers. However, what will Skype be doing to support the small to medium business market – where over 35% of its users say they are using Skype in business?
• What impact will the time required to deal with regulatory issues be on the development and launch of upgrades and new products ? We were told at the press conference no road map will become available until these regulatory issues have been addressed such that the acquisition can be completed. Yet innovation, business development and product releases must continue during this period.
• What direction will the developer program take? Will Skykit survive its rather long birthing process or can Microsoft bring in developer program expertise that would finally get Skype an active developer program from which we can see results? (and from which third party developers can benefit.)
• Can we still expect to see evolution of the Facebook relationship in some way that supports real time conversations via Facebook?
• Since Steve Ballmer showed up on stage at RIM’s BlackBerry World event last week and is now deeply associated with Skype, can we expect to see a carrier-agnostic Skype client on BlackBerry devices? Or would that be too much conflict with Windows Phone?

Bottom line: while there have been overlapping products (such as Live Messenger and Skype Chat) there is so much synergy here that it’s going to be interesting to see what product evolution occurs over the next year and how Microsoft integrates an acquisition with what has become a brand onto itself. Steve Ballmer can be thankful that there was no Yahoo acquisition and that the Skype opportunity has come about with so many more obvious benefits.

One other benefit for Canadians: the Canada Pension Plan Investment Board cleared about $500MM on the deal above their initial $300MM investment 18 months ago.

Other thoughts:

• Dan York: The End of the “Skype as Bandit” Era where Dan provides an interesting  commentary on the barriers Skype has overcome, the Skype experience and the people behind Skype. Dan has blogged more about Skype than any other topic; his employer, Voxeo, lives and dies by Skype, especially the Skype chat.
• Alec Saunders: Does Microsoft’s acquisition of Skype change anything? where he talks about the impact on carrier relationships, video calling and handset manufacturers.
• Alec Saunders: Why is Steve Ballmer excited about Skype? where he provides an excellent overview of today’s Microsoft-Skype press conference and his conclusions as to why this is an excellent deal. (Recall Alec worked for several years at Microsoft.)
• Tidbits, Apple News for the Rest of Us: Microsoft to Buy Skype for $8.5 Billion “… Microsoft says it will continue to invest in and support Skype clients for non-Microsoft platforms. If Microsoft really loves us, they’ll throw out the Skype 5 interface as an initial gesture of goodwill.”
• Phil Wolff, Skype Journal: What Skype’s partners can expect from the deal and Why did Microsoft buy Skype?
• GigaOm: Steve Ballmer & Tony Bates Talk About Skype-Microsoft …

Related articles

• Done Deal: Microsoft to Buy Skype for $8.5 Billion in Cash (kara.allthingsd.com)
• Microsoft to Acquire Skype (online.wsj.com)
• Microsoft targets video-calling with Skype (theglobeandmail.com)
• Microsoft’s Plans for an Office-Flavored Skype (blogs.wsj.com)
• It’s official: Microsoft to buy Skype for $8.5 billion (seattlepi.com)
• Why Microsoft Plus Skype Is An Enterprising Idea (informationweek.com)
• Microsoft Brings Skype from Living Room to Board Room (pcworld.com)

Yesterday I wrote about coverage of the BlackBerry PlayBook launch, partially inspired by three pages of coverage in last weekend’s Globe and Mail Report on Business. But I left with the question of whether competitive comparisons with the iPad are valid or can the PlayBook provide new market directions for tablets.

Certainly on content and applications, at the moment iPad has built up a significant following. But RIM has brought together a variety of technologies that could prove to be the infrastructure for a range of tablet-size intelligent devices. As Alec Saunders, who has experience with platform launches as the initial Product Manager for Microsoft’s Internet Explorer, says in Playbook: Maybe just right on target:

No product team has ever produced a fully realized product on version 1.  It’s simply not possible.  Case in point: Apple’s version 1 iPhone was roundly panned as underpowered, with terrible battery life, poor reception, and no applications.  Recall that in the early days, Apple insisted that the only applications that you would ever need on iPhone could be written as web applications.  How wrong Apple was.  To its credit, Apple recognized the flaw, and pivoted quickly.

Alec went on to corroborate my statement about the user experience:

In general the media are having difficulty separating the  technology from the user experience. We have yet to see real user experiences that evolve from the technology behind the platform.

with his statement:

It’s not until a product meets the market that a product team can begin to listen to customers and work on delivering the feature set that customers really want to buy.

So let’s take a look from the technology perspective and RIM’s recent strategic acquisitions:

• Security: in early 2009 RIM acquired Certicom,  the company behind RIM’s robust security that has lead to BlackBerry’s acceptance by government agencies in Canada, U.S. and Europe.
• Robust OS and Multi-tasking¹: The QNX acquisition last year gave RIM a very robust multi-tasking real time operating system (RTOS) that is the answer to “Would you trust this to run an airplane? (or at least your spacecraft)” QNX, with its multi-processor support, is embedded in devices and software worldwide with customers such as Cisco and all the major automobile manufacturers. This is perhaps the most important acquisition RIM has made (I have been aware of the Ottawa-based company and its unique feature set since its founding in the mid-1980’s.)
• Well behaved browser: RIM acquired Torch Mobile in the summer of 2009 and built their webkit-based browser into BlackBerry OS 6. All I can say here is that, with my BlackBerry Torch experience, browsing to websites is no longer a time consuming gamble.
• Last September RIM acquired Dataviz, publisher of the Documents To Go utilities that allow you to easily read and edit Word, Excel and PowerPoint documents as well as read PDF files on BlackBerry, iPad/iPhone, Android and even Maemo devices. Ironically I have purchased their Premium product for not only BlackBerry but also iPad.
• The recent acquisition of Swedish “The Astonishing Tribe” has brought significant mobile device user interface technology and experience into the fold.

Combining these acquisitions technology with the technology behind their legacy wireless and messaging experience, RIM’s challenge is to build devices that can deliver unique user experiences. But that only comes from the combination of developer innovation and user feedback – one reason for a launch today without a complete set of applications (including a native email application). The developers have had their chance to get some experience but now the users can talk back.

In my next post I’ll outline some of my expectations combining my own mobile experiences (BlackBerry, iPhone, iPad) with what I can see these technologies bringing into the picture in the future.

Update, April 27, 2011: RIM continues to buy additional technology. Today it was announced that RIM is acquiring Tungle, the meeting accelerator offering that makes for easy scheduling across multiple time zones and calendar applications.

Other posts:

• Voice On The Web: BlackBerry Playbook: iPad Competitor or Another New Category of Appliance?
• Alec Saunders SquawkBox: Playbook: Maybe just right on target.
• Globe and Mail Report on Business: BlackBerry PlayBook tries to chart a path between work and fun.
• Globe and Mail Report on Business: RIM’s edge: an operating system that ‘kicks ass’

¹RIM has long been a leader in true multi-tasking on wireless devices. Their original BlackBerry was powered by the Intel 386 chip, the same virtual machine processor that gave me an employment opportunity selling a multi-tasking environment for use with MS-DOS. RIM Co-CEO Mike Lazaradis reminds me of this every time we discuss our multi-tasking experiences.

Related articles

• BlackBerry Playbook launches quietly in Toronto (thestar.com)
• BlackBerry PlayBook gets real today; AT&T blocking updates already (zdnet.com)

Yesterday Apple released FaceTime for Mac, making its popular iPhone 4 Facetime application available to all owners of MackBooks and iMacs that are using the Snow Leopard (OS/X 10.6) operating system. Most significant about this announcement was the immediate expansion by several million of the user base who could be reached on FaceTime calls. (3.89 million Macs were sold in Apple’s most recently reported quarter.)

The limitation for video calling (and any real time communications service) has always been how many users can really use the service, given the interoperability limitations. As pointed out by former Skype CEO Josh Silverman in an interview at CES last January, when Skype launches a service, such as video calling, it is immediately available to the over 100 million active Skype users in a quarter.

Other attempts at video calling services, such as Logitech’s Vid, are limited to either other users of supported Logitech webcams or any third party offering using Logitech Vid software but there was no contact base built up to communicate with.  Two or three years ago Rogers attempted to launch a wireless video calling service but nobody had the mobile handsets required to make and receive video calls; the service has at best languished. The launch of FaceTime on the Mac will certainly significantly expand the user base who can experience video calling, even if limited to WiFi or Ethernet connections.

So how does FaceTime for Mac work? Download the application from Apple’s website and install it. It will initially ask for an email address to be associated with your FaceTime for Mac. You then are given your own image along with a list of Contacts, which comes from your Mac Address Book. My initial call was to fellow blogger, Dan York, during which I found he could be accessed on his iPhone 4. I simply clicked on his mobile number and the call was made. Dan then associated his FaceTime for Mac with a personal email address and we then made a subsequent MacBook-to-MacBook call.

Orientation: on the iPhone you can change the orientation of the image simply by rotating the iPhone where its accelerometer automatically changes the orientation. On the MacBook it is necessary to mouse over your own image and a circular arrow icon will appear; click in the icon and the image goes from portrait to landscape (or vice-versa, as appropriate).

Dan has reported on our calls in Hands-On with Apple’s new FaceTime for Mac (Screenshots). He outlines three issues: How do you shut the video off? What about Windows? and the implications for Standards?

My own issue is this. FaceTime is pretty well a stand alone video calling application; it does not even link into iChat. Skype video calling is accompanied by an entire ecosystem of real time communications tools that allows concurrent chat sessions (I always like to ask if someone can take a call), file transfer, or multi-party calling. So it works when the daughter reluctantly wants to show her new braces to her Dad (watch an iPhone 4 TV ad) but there’s no chat session for sending the bill to Dad. Phil Wolff makes some interesting points in Skype beats FaceTime for Mac: 18—13.

Can you use other webcams than the Mac’s Built-in iSight webcam? Yes, I subsequently made a call to Alec Saunders using the FREETALK Everyman webcam on the MacBook Pro; it may be my personal perception but I thought it gave a better quality image, but have no evidence as to how this would have appeared at the other end.

And, as for the use of your Mac webcam for other video applications mentioned by Dan? I made some more calls that beg to differ with Dan’s thoughts on this; but that’s the subject of a separate post.

Bottom Line: FaceTime for Mac will give millions of more users the ability to experience video calling. The market usage is far from saturated and we’ll be seeing ongoing innovation such as multi-party video calling (now in Skype for Windows 5.0) and perhaps more services offering video calling on smartphones. (BlackBerry/RIM – are you following this?). Will we eventually see interoperability?

But the bottom line will be how many parties can you call using a service. The race for users has become serious. One certain call: the next version of iPad will definitely have webcam support. An obvious way to add more millions of end points for FaceTime.

Related articles

• Apple Fights Back In Video Chat With FaceTime for the Mac (newteevee.com)
• Why FaceTime And Not iChat? (crunchgear.com)
• Apple introduces FaceTime for Mac (macworld.com)
• Skype beats FaceTime for Mac: 18 – 13 (skypejournal.com)

Since its launch about two years ago, I have blogged several times about iotum’s CalliFlower Conference Calling service. More significantly I have used it for several conference calls of up to 25 people, including a couple that ran for over two hours. While permitting up to several hundred participants into a conference call, Calliflower’s primary unique feature is the “portal” created for each call along with the long term archiving of a call and its associated “portal”. Other features include:

• access via the PSTN in over 100 cities in 30 countries (using phone numbers supplied by Voxbone)
• ability to display (and share) documents supporting the conference call’s agenda
• a common chat window, often used to share URL’s, provide information complementary to the primary discussion or even ensure all participants have correct spellings of key words used in the discussion
• a complete service that supports the entire conference call process from initial invitations to the final archiving of the call
• an iPhone client for setting up and accessing a CalliFlower session
• sessions can be either private requiring invitations or public; the archived content of public sessions is searchable

Today iotum has announced the addition of Skype as a way to access Calliflower conference calls; from the press release:

Previously, participants could only dial into Calliflower conferences through PSTN access numbers, potentially incurring local charges.  In regions or countries where no such access numbers are available, customers would incur long-distance and even international charges, or use up Skype-out minutes calling access numbers overseas.  Now callers can access Calliflower through a Skype ID – CalliflowerSkype – or via a web button in the Calliflower UI, overcoming this disadvantage.

“We’ve had many requests from potential Calliflower customers who had no local access numbers, especially from  parts of Africa, India, China and the Middle East,” said Alec Saunders, iotum CEO. “Now, as long as they have Skype, that doesn’t matter anymore.”

In addition, users gain from the better audio quality they will enjoy through direct Skype access¹, as well as from all the visual information, documents and presentations that are shared through Calliflower’s interactive dashboard. These tools go a long way toward improving understanding on international conference calls.

Available on PC, Mac and iPhone, Calliflower makes organizing and participating in multi-party calls simple and engaging.  It allows participants to see the status of other callers and raise hands to request the floor, while also providing interactive chat, document sharing, intuitive conference controls, call recording, invitations and reminders, integration with calendars, and more.

On your initial access to a CalliFlower call you will need to add CalliFlowerSkype as a Skype Contact. But then recall that Skype allows you the option of using your Skype Online number or a designated mobile phone number as your caller ID for SkypeOut calls. When accessing a CalliFlower conference call on Skype, CalliFlower will look at your callerID in place of entering a PIN number to provide authentication for your access. iotum is looking at adding the ability to use your SkypeID as a participant identifier.

As with access in over 30 countries via the PSTN, Skype Access in CalliFlower is included in the monthly Premium service with a monthly charge of $50 for the first two moderators or organizers within a company and $25 per additional organizer.

Bottom line: Skype Access opens up lower cost access for participation in a CalliFlower conference call in every country where Skype is available. Incorporation of Skype access also fits into Skype’s “Skype Everywhere” goal. In this case calls can be accessed not only via Skype on a PC but also from any Skype offering on a mobile platform. This is enhanced for iPhone users where they will also find an iPhone client for setting up and managing a CalliFlower conference call.

¹I asked iotum CEO Alec Saunders to clarify the statement re improved auido quality; his response:

1. Better quality hardware. Skype users tend to be using better quality equipment than POTS callers.  In particular most PC headsets have a better microphone than the cheap microphones in telephone handsets.
2. 2. Fewer transcoding losses. Internally, Calliflower is VoIP.  When a user calls Calliflower from the PSTN, those calls transit a media gateway where the media is transcoded and presented as G.711.  Prior to the direct connection we’ve initiated, media coming from Skype would be transcoded at least twice – from Skype to the PSTN, and then PSTN to G.711.  The result was a noticeable degradation in quality.  Now Skype presents the media to us directly as G.711.

Other posts:

Check out Tom Keating’s post over at his VoIP and Gadgets blog on TMCNet where he interviews iotum CEO Alec Saunders about how CalliFlower implemented its Skype access via Skype for SIP, involving Skype for SIP’s addition of IP address authentication.

Full disclosure: the author has followed the evolution of CalliFlower over its three year development process, and was a frequent participant in iotum’s SquawkBox calls where not only did we discuss technology news of the day but also contributed ideas and suggestions for improvements and enhancements to the CalliFlower service. You can access the archive of the SquawkBox call discussing the FREETALK Everyman headset at the time of its launch here.

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• HiDef Conferencing Relaunches as a Service of Citrix Online’s Audio Services Group (voiceontheweb.biz)

So it’s finally resolved. The Skype spinout from eBay will involve Skype’s founders as investors and board members while contributing a cash investment. Skype finally owns the core intellectual property required for Skype to operate at its current cost levels. eBay gets the cash they were looking for but 5% less of the new Skype. Canadians still get to invest $16.75 each through the government operated Canada Pension Plan. Marc Andreesen gets involved with another major Internet play. Mike Volpi and Index Ventures are out of the picture. Lawyers and consultants are probably heftily rewarded for all the litigation activity leading to the final resolution. Incessant speculation on Skype Journal’s Skype 5.x Public Chat about how to get around JoltID’s Global Index software will finally cease (well, maybe).

While I have put links to several posts leading up to the resolution below it has been most interesting to read various bloggers comments on the resolution and the future direction for Skype:

Phil Wolff at Skype Journal sums up the numbers in his post, Sold! The Bullets and values the JoltID intellectual property at $275 million. (Phil gets credit for the graphic above, by the way.)

Om picks the winners and losers on My Thoughts on the Skype Settlement: Winners & Losers Scorecard. He points out the “great spin quote” from Silver Lake as a leftover from the “PR spin” days prior to the transparency that comes with social networking. Come on, guys. We’ve all seen the depositions and emails. As for the future, Om comments:

No Silver Lining?: One person who I totally feel for is Silverman, the current CEO of Skype. He gets to run a company which will have the looming presence of its founders.

Whatever the press spin might say, the new investor group is like a poisoned well. It will be a polarized group, always looking over their shoulders. Silverman is going to need to keep a lot of people happy, and those board meetings with nearly two-dozen people aren’t going to be fun, either. But as Biggie Small once said:

“It’s like the more money we come across, the more problems we see.”

Both Kara Swisher at All Things Digital, in All Is Forgiven: “It’s a Clean Slate,” Says Andreessen About Lawsuit-Mad Skype Co-Founders, and Dan Primack at PEHub, in 5 Skype Questions for Marc Andreessen, interviewed Marc Andreeson of Andreeson Horowitz. The common statement about his relationship with Niklas and Janus:

We have not been in business with them before, so we don’t have any baggage at all. Our view is that they’re two super-creative founders. We’ve known lots of legendary founders, and they are all different and have things that make them unique. We include ourselves in that from past experiences. We view ourselves as a pro-founder firm, so we like the idea of founders being involved. It’s a net positive.

Martin Varsavsky. CEO of FON, a company partially financed by many of the same players in the Skype sale, restricts his comments to his thoughts on the future of Skype – where is Skype vulnerable?, where are its strengths? – in Why it may make sense to buy Skype back. His overriding statement:

Skype is simple. Michael Arrington and all of Silicon Valley may find Google Voice amazing but is the average global citizen ready to use it? Massively use it? You download Skype, you find your friends on Skype, you talk. And, if you don’t find them, you Skype out. And when you talk you can also do video. I LOVE video calls on Skype. I used to use them for people I really cared about, relatives, close friends. Now I even do business calls on video with Skype. It just gives you more of a sense of what is going through the other person´s mind. And Skype is the leader on video quality. So simplicity plus video may be a good way to beat flat plans from telcos and avoid being Tivoed. If the video services can migrate to mobile phones Skype is on to something.

Andy Abramson, in The Skype Suit Is Settled-Now Business Can Get On, comments:

I’m just glad the suit is settled between eBay and Skype. Now a lot of things that have been held back can finally move forward. In many ways the settlement is a good thing. The return of the original founders means disruption will continue, and new ideas will flourish. It also means Skype as a business or brand will now have a chance to prove its worth.

Alec Saunders, in eBay’s big mistake; Why the JoltID license was inevitable, concludes:

The lesson in all this? Deals involving technology licenses and acquisitions are common in business. When acquiring a technology asset, buyers must acquire the necessary control needed in order to protect the business.  Either buy, or license in perpetuity, what you need to prosper. Unless your intent is to immediately begin work on a substitute technology, a license for core technology that needs renewal is a sure way to find yourself caught by the short-hairs in a future negotiation.

The bottom line is that Skype is now in a position to focus on building future communications software and services without the distraction of depositions, legal wrangling and media curiosity. Provided he can navigate through a 23-member board with diverse interests and experiences, Josh Silverman can build the real communications software business of providing infrastructure for conversations while having a wealth of technology and business connections available in an advisory role.

Previous Posts:

Om’s trail:

• Skype, Founders Settlement in the Works (Nov. 1)
• Further Details Emerge As Skype & Its Founders Close to Settlement (Nov. 3)
• Skype Founders Fight Their Way Into the New Skype (Nov. 5)
• My Thoughts on the Skype Settlement: Winners & Losers Scorecard (Nov. 6)

Kara Swisher (All Things Digital):

• Volpi and Index Ventures Out of Skype Deal, the Lawsuit-Happy Founder Twins In (Nov. 3 with lots of links to related stories)
• I Love the Smell of Settlement in the Morning: Skype Founders Set to Get 10 Percent, Option to Buy Three Percent More and Two Board Seats (Nov. 3)
• All Is Forgiven: “It’s a Clean Slate,” Says Andreessen About Lawsuit-Mad Skype Co-Founders (Nov. 6)

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• Skype soap opera ends as founders set to regain stake ahead of $2B sale (dailyfinance.com)
• Lessons From the War Over Skype (bits.blogs.nytimes.com)
• Skype Cofounders Will Be Part Of Buyout Group; Index Ventures Is Out (paidcontent.org)
• Skype Founders Re-Found in Settlement (marketingpilgrim.com)
• Skype founders win back share (guardian.co.uk)
• Andreessen On Skype: “This Is One Of The Most Important Companies On the Internet.” (techcrunch.com)
• eBay’s Skype sale gets go-ahead with settlement (news.cnet.com)
• Confirmed: Skype Founders Settle With eBay And Others, Get 14% Stake In Skype, Not 10% (techcrunch.com)
• Skype Settlement: Zennström And Friis Have Won It Again (paidcontent.org)
• 17 Million Canadians Will Have an Interest in Skype’s Success (voiceontheweb.biz)

Building on Skype’s recent announcements of its evolving Skype for Business activities, Chief Strategy Office Christopher Dean gave a keynote address yesterday at a joint VON/Channel Partners Conference session. Three posts have followed up on the session:

Khali Henderson, in Skype Not Just Telecom’s “Bad Boy”, CSO Says, reports Christopher’s overview of their approach to business markets:

“Skype is no longer just sort of the ‘bad boy,’ disruptive influence in the telecommunications market,” he said. “What we offer is strong opportunities to leverage these trends for operators and their customers.”

The company, he said, is actively seeking partnerships with service providers – wireless and wireline operators and MSOs – as well as OEMs and ISVs and applications developers, to be part of what he calls an “emerging ecosystem.” Skype’s role is to be an overlay of services – audio conferencing, video, desktop sharing, presence, IM, file sharing and more – that drive demand.

Khali reports that Christopher went on to discuss the success of Skype’s partnership with the Hutchison 3 Group and the services offered involving 3’s Skypephone as an example of how Skype has helped a partner successfully build their business.

Alec Saunders reports on the session in Skype counters critics, embraces ecosystem:

…. Skype CSO Chris Dean began his remarks at VON by saying that there is an ongoing sea change in the telecom market, and it’s only accelerating.  The macro trends are around wireless, wireline, emerging applications and service models, the economy and the regulatory environment.  And he warned that there are immense risks to operators that don’t adapt.

Jon Arnold, in VON – Final Day/Skype Keynote – Seeking Channel Partners, reports:

Most of us know this [the business market] is a top priority for Skype, and the most newsworthy item from the keynote was their new focus on channels, which of course ties in nicely with both events here – VON and Channel Partners. The main idea here is that Skype will be launching a service provider VAR program later this year. Christopher provided a URL about the program for reference, but as you’ll see, there’s not much there yet.

So, in the course of a few minutes, the audience heard about how Skype is looking to cross the chasm and partner with service providers. That creates all kinds of interesting scenarios, and Christopher pointed out how this is part of their bigger vision to be more open and partner-friendly in the post-eBay world. On that note, he didn’t have much to say about the Extras program other than they understand how important it is, and are overhauling it now. So, it’s not quite dead yet….

Getting out a message differentiating the Extras program as a partner marketing program, which is coming to an end, from the evolution of any forthcoming Skype developer program has been difficult challenge for Skype. I suspect Christopher was really referring to Skype understanding how important a well-articulated and effective Skype developer partner program is. Reference to the Skype Service Partner Program was made in yesterday’s post: Skype for SIP: Getting Legitimization, Endorsement and Traction.

Bottom line: Christopher’s keynote is one more sign that Skype is getting serious about its approach to the business market, building on the recent launch of Skype for Asterisk and Skype for SIP. A significant challenge will be, once Skype is embedded within business communications infrastructure as a voice calling option, to evolve such that this infrastructure can then take advantage of its presence, chat and video infrastructure.

But perhaps more important: For over six years consumers and many businesses have experienced Skype as a lowl cost or free voice, chat and, more recently, video conversation service – with minimal support from Skype itself. Skype is finally gaining acceptance, certainly now at the communications vendor level, as a viable and reliable alternative to legacy PSTN services. And Skype finally appears to be building the resources and programs required to properly support business communications operations.

This trend recalls the early days, 25 years ago, of the PC itself when adoption of the PC as an enterprise resource only came about because employees were bringing PC’s into their offices on an individual basis and demonstrating the resulting productivity and cost effectiveness to their management. Been there; done that!

Skype VON 2009 Keynote Presentation – Christopher S Dean

View more documents from SkypeConversations.

Thanks to Jon Arnold for providing the pictures, with permission.

Saunderslog.com:  Virgo’s first VON a solid outing

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• How Skype Plans to Dominate Business Telephony (gigaom.com)
• Why Skype maybe right about killing its Extras developer program and being careful with APIs (goebel.net)
• Skype for SIP: Getting Legitimization, Endorsement and Traction (voiceontheweb.biz)
• Skype for Asterisk Release Marries Skype Calling into Popular Asterisk PBX Platform (voiceontheweb.biz)
• The Future for 3rd Party Skype Developers: Bloggers Speak Out. (voiceontheweb.biz)

The recent announcement of Skype’s decision to drop its Skype Extras (marketing) program initially caused much anguish across the blogosphere; however, more sober commentary has been appearing in the past few days. To recall the announcement:

1. Immediately: No new partner programs or upgrades will be placed into the Skype Extras
2. Going forward: Skype Extras will remain available via the Skype for Windows client until their certification expires (which may be up to a year).

Alec Saunders whose developer program experience crosses many platforms, in What Next, Skype?, reviews the “swift and brutal” reaction around the blogosphere, puts a perspective on the characteristics of good ecosystem programs and then measures up where Skype stands today. He concludes with:

17 points out of a possible 30. Even so, the only real killer flaw in the Skype developer program is co-marketing.  Since Skype owns the customer, they are the only cost effective channel by which a developer reaches the customer.

Without addressing these flaws, especially the co-marketing issue, Skype’s developer ecosystem will die.  It may take time, but developers will leave and go elsewhere.

Skype knows all of this, however.  The smart money is on Skype developing a new program, and judging by the recent spate of announcements around Skype in business, and the beefed up Skype for Business team, it certainly looks as if they’re going that way. It’s no coincidence that that’s where the money is too. [Author’s italics]

In No Skype Extras Anymore, Scendix CTO Christoph Buenger, a veteran at developing applications for both the Skype and eBay ecosystems, outlines in a PamNews blog post  why their products are not impacted by the shutdown of Skype Extras:

So how does this affect Scendix/PamConsult products? The simple answer is: not very much.

He goes on to review how Pamela only uses the Skype API’s; how the new upgrade of PamFax to Version 2.0 made the product totally independent of the Skype Extras system (they were the only developer who had incorporated Skype Credits into a product but they also use other payment services) and their “standalone” version of Pamela Call Recorder. He concludes with:

We believe that some changes are always a good chance to make something much better than it was before. For us, this means finding more ways to market our software and the opportunity to change the pay-as-you-go payment process in PamFax will be a great step forward in making our products even better.

So: R.I.P. Skype Extras System. Let’s find something better out there!

In Skype Says Next Generation Platform Will Embrace Developers Michael Arrington reports on a couple of weekend conversations with Jonathan Christensen:

Christensen says that the Extras announcement is not about Skype backing away from a robust developer platform. Rather, he says, Skype is focusing on a next generation platform that will hopefully address the deficiencies of the old program and open many more opportunities for developers to build on Skype services.

They went on to discuss third party applications that can make Skype calls directly and future web applications “leveraging Skype as a service”. But there are two reasons Skype has to continue to run on a client today:

• Maintaining high quality calls via their current audio/video encoding
• Skype’s p2p architecture which not only impacts latency issues but is also the major cost factor allowing free Skype-to-Skype conversations.

Read the post to see why Michael feels we’’ll first see desktop applications integrate Skype as a service first and how “the real win is when you can initiate Skype voice and video calls via web applications”. He concludes with:

Anyway, we’re looking a ways into the future with all of this. But one thing seems clear – Skype, which is happily soon to be under new management, will someday open its doors widely to developers.

Bottom line: Support for Skype developer activities is not dead; it’s evolving. No software partner’s business has been significantly impacted by the closure of the Skype Extras [marketing] program. Lots of suggestions about how Skype developer support should be executed going forward but it’s probably going to be an evolution rather than a “revolution”.

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• “Skype Extras” Is Dead; Long Live the Skype API’s! (voiceontheweb.biz)
• Skype for Asterisk Release Marries Skype Calling into Popular Asterisk PBX Platform (voiceontheweb.biz)

This week about 50,000 people have gathered in the northern Nevada desert for the annual Burning Man ritual. You really have to visit their website to get a feel for what it is about and the principles that guide this annual one week experience.

Started in the mid-1980s, Burning Man is designed to generate a society that connects individuals to their creative powers, participation in community, civic life, and the world of nature. Gathering on an ancient lake bed, about 140 miles north of Reno, participants decide how and what they’ll contribute to the community.

But one guarantee – neither AT&T nor Verizon, neither Sprint nor T-Mobile had a cell tower within the horizon of the Black Rock City playa. As a result, working with Voxbone’s iNum service, up to 10,000 participants can receive SMS messages or, within capacity limitations, receive voice calls at country code +883, iNum’s worldwide country code accessible for free from many partner service providers and via local access numbers in 45 countries worldwide.

So, with no coverage by the commercial wireless carriers, how does this connect? Voxbone has worked with the Open BTS Project:

…. an effort to construct an open-source Unix application that uses the Universal Software Radio Peripheral (USRP) to present a GSM air interface (“Um”) to standard GSM handset and uses the Asterisk software PBX to connect calls. The combination of the ubiquitous GSM air interface with VoIP backhaul could form the basis of a new type of cellular network that could be deployed and operated at substantially lower cost than existing technologies in greenfields in the developing world.

In plain language, we are working on a new kind of cellular network that can be installed and operated at about 1/10 the cost of current technologies, but that will still be compatible with most of the handsets that are already in the market.

The OpenBTS team has constructed a cell tower at Black Rock City, that, in the “leave no trace” principle of Burning Man, will be taken down at the end of the event on Labor Day (next Monday). Effectively working together, Voxbone and the OpenBTS project have demonstrated how to set up and install at a low cost a complete GSM-based wireless service in remote and otherwise unserviced regions of the world. Full details are here but it is interesting to note:

• Who is doing this? This is an activity of the OpenBTS project. The entity legally responsible for the test is Kestrel Signal Processing, Inc.. The actual on-site engineers are David Burgess and Harvind Samra.
• Is this legal? Yes. We have an experimental license, WD9XSP, and a consent letter from Verizon authorizing us to operate in their KNKN224 block A cellular spectrum. We are also coordinating operations with Commnet Wireless to prevent interference.
• How much does the service cost me? Nothing.
• What do you do for emergency calls? Nothing. We are an experimental service and do not support emergency calls.

and

• My phone shows service but I can’t make a call. Why not? Only the first few hundred subscribers will get full speech service. Everyone else will just get SMS. There are two good reasons for this:
  1. We don’t have enough equipment for everyone to get normal speech service.
  2. Widespread speech service would change the nature of BRC in ways a lot of people would not like.

• Will my carrier charge me for every text message I send or receive on the Papa Legba network? No, the Papa Legba network is a separate isolated network from your normal carrier’s network, and no charges will apply as no SMS is being sent or received through your normal carrier.

Note that “Voxbone is providing funding and most of our VoIP connectivity”.

OpenBTS Chronicles: We Loaded the Truck Today and co-founder David Burgess reports on getting it going:

So we turned on the PA for the first time today and immediately got swamped with registration requests, which is actually normal and a good sign given our operating conditions. We also got a report of someone receiving a text message at Center Camp. That’s only about 1 km, but the impressive part is that the guy with the phone was in a
sealed shipping container (the BRC NOC) at the time. We were delayed seriously by high winds that made tower work dangerous, so a 4-hr tower job took just over 11. But it’s up thanks to the heroic efforts of the rigger. It was a little scary to watch.

From the Voxbone press release:

Voxbone worked with the OpenBTS Project to automatically assign iNums to cell phone users at Burning Man, making them instantaneously reachable from networks such as Skype and Google Talk.

“We are showcasing how iNum can be used to connect remote or unconnected areas of the globe with the rest of the connected world, using cell phone infrastructures such as OpenBTS,” said Voxbone CEO Rod Ullens.

“In addition, we are demonstrating to people attending Burning Man that they can receive voice calls and text messages from services like Google Talk on their cell phones at the festival. Burning Man is a great event at which to highlight these types of services because the attendees are open to new ideas and new experiences, and we are enthused to be a part of that.”

The iNum service is provided free to users at Burning Man. At the same time, it will enable users to spread the word about how valuable iNum is when it comes to connecting the unconnected.

“In partnerships like this one for Burning Man, there is an opportunity to demonstrate a technology for quick and cost-effective connectivity to regions that urgently need it,” said OpenBTS Project co-founder David Burgess. “In this case, the connectivity is a convenience to Burning Man participants, but iNum also can play a critical role when war, natural disasters and other emergent situations require quick communication.”

Alec Saunders, in OpenSource Meets GSM at the Burning Man, asks “Why do this?”

Naturally it’s a nice showcase for VoxBone’s iNum technology.  More to the point, OpenBTS believes that by making inexpensive mobile base stations available built around open source solutions, telephone service can be made affordable even in the remotest parts of the world.

Would be interesting to hear how it turns out in terms of number of cell phones connected and conversations handled. but the project is certainly a contributor to the overall spirit of innovation and creativity encouraged by the Burning Man ritual.

Question: while Skype for Asterisk was just released this week, can we expect the OpenBTS Project to add a Skype for Asterisk channel to their PBX next year?

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The initial feedback post, FREETALK® Everyman: The Bloggers Speak Out, is getting a bit long for a single Internet post. But feedback continues to arrive, not only in blog posts but also via Twitterville where we find, searching on “FREETALK Everyman” and “Skype Everyman”:

And Michael Graves (@mjgraves), in his post Skype’s FREETALK® Everyman Headset, walks through some of his past experiences with headsets, especially in his recording studio work. He had some initial scepticism when he received his evaluation FREETALK Everyman headset; he first came to appreciate its flat-fold feature as a frequent traveller in his day job. And once he arrived at his destination:

Kicking back in my hotel room that evening I donned the headset to listen to a couple of podcasts. My initial reaction to wearing it was… it was fairly comfortable. Perhaps a bit bulky compared to my usual gear, but not bad at all. The microphone, mounted to a flexible metal tube, swung easily out of the way for the purpose of pure listening. The headset sounded like it had decent, large diaphragm drivers. That is, it sounded very full, not obviously lacking in frequency response.

and concludes with:

No doubt you can tell that my opinion of the FREETALK® Everyman headset has softened over time. I was predisposed to dislike it for being merely cheap. However, there’s more to it than that. It does what they set out to do. It sounds good and it’s convenient. It’s not my favorite headset by a long stretch, but at just $22.88 it’s the most affordable good-sounding headset that I’m aware of. It raises the bar in the low-end of the marketplace, and maybe that’s a good thing for everyone.

Alec Saunders has finally found time to put up a post, SquawkBox August 13 – FREETALK Everyman, that features the SquawkBox conference call where he interviewed me about the FREETALK Everyman headset and we took questions from over twenty participants that resulted in a very lively discussion.

Luca Filigheddu, one of Italy’s VoIP veterans and an active reviewer of all things Skype, mobile smartphones and Twitter, in Here Is The Best (and Cheapest) Skype Headset Ever, concludes with:

In conclusion, a very good deal for anyone shopping for a new headset. I tried lots of great headsets in the past 10 years but I can assure you this is the one with the best balance between price and quality.

As for my own personal experience: Last week I was on a trip where I needed to move between a business office and my accommodation twice daily. Talk about how to learn to appreciate the flat-fold feature.

Full disclosure: In Store Solutions has become a client of Denali InterConneXions, publisher of Voice On The Web, building on the author’s previous business development experience with establishing partnerships that can assist with the promotion of a primary vendor’s offerings. A more complete statement will follow shortly.

On a recent trip to Spain, where I turned off my BlackBerry Bold’s and iPhone’s  mobile carrier network connection except when really required, I was able to use WiFi connections at my various hotels quite effectively to keep up with my “data” activities on these devices. (Except in a situation mentioned below I used Skype on my PC for voice calls.) But there were two situations I encountered during this trip which really hit home the message that WiFi is becoming as important as mobile carrier offerings for wireless smartphone communications:

• In one instance, two Canadians, who had stealthed Skype for iPhone onto their iPhones, used a Spanish hotel’s WiFi service to make Skype voice calls between each other, almost as if their iPhones were “walkie-talkies” while on the hotel’s grounds. No roaming charges for these calls.
• In another case, I spent one night in a hotel room, in a recently renovated 8th century building, that had no landline. But it had a WiFi service available; I used Truphone on my iPhone to make a couple of voice calls. (The price of staying “legal” in Canada is not to have Skype for iPhone installed.)

The trip, combined with my WiFi experience during a March vacation trip to South Carolina, significantly reinforced my belief that WiFi is becoming the potential “stealth” carrier in the smartphone communications business. But what does that portend for the future?

Friend Andy Abramson, in a post Rumored New Apple iPod Touch Will Be Huge for VoIP, Multimedia, has pointed to the rumors of a new iPod Touch that will include a camera, a built-in microphone and 64GB of memory:

This is awesome news for the likes of Skype and client Truphone and will likely start a flood of “me too” applications from the likes of Cablevision who operates a WiFi hot zone in the New York area, Clearwire and Comcast who are chasing customers in the Portland area with WiMax and elsewhere as the WiFi capability of the iPod touch means its a mobile phone without the mobile phone bill and contract connected to it, something Jeff Belk, the former Senior VP of Strategy at Qualcomm discussed in Unstrung in February of this year.

And where does he see the disruptive uptake?

…. Within two key categories:

1) Pre-teens who need a phone but can’t afford a contract

2) Travelers who don’t need to be “always on” but want to stay in touch cost effectively.

Who benefits from this? Anyone with a travel router to sell, including Apple. Toss a travel router in your bag, and stay in a hotel with wired broadband to your room, and logging on is a snap.

As pointed out in the introduction to this post, I think I was already well into Andy’s category 2 during my Spain trip. Alec Saunders, in Will the new iPod Touch unleash VoWiFi? I’ll wait and see, sees WiFi as a “backup” to 3G network but pipes into the road warrior discussion with:

Travelling, however, is a different story.  As Andy notes, you can talk for free on WiFi when you’re travelling, versus whatever the outrageous roaming rate that your carrier might charge.  Savvy travelers use products like Truphone and Skype to avoid roaming charges.

Bottom line: users will continue to look for the combination of access and cost that serves their immediate need. While in Canada, I never run over 1GB of data on my BlackBerry Bold and have a reasonable cost voice subscription for voice calls; thus my mobile carrier costs are not a particular concern. But when I leave Canada, I will look to use any wireless service that avoids the last bastion of excessively high mobile calling costs: roaming charges.

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It all started when I attended the June 2 Android launch on Rogers Wireless. During a scrum I had asked “Fringe” actor Joshua Jackson if he had made a call from Paris, France to his wife in Vancouver using Skype for Android (Skype Lite). Rogers Wireless CMO John Boynton interjected that Rogers allows all applications to run on their networks; the inability to run Skype was an issue that required Skype’s initiative to resolve (there’s a regulatory issue). Later during a demonstration of the Android when I had noticed the Skype Lite beta icon on one of the HTC Android phones, a Rogers marketing person volunteered that Rogers does not block any applications.

Fast forward to the Canadian Telecom Summit two weeks later when recently appointed Rogers CEO Nadir Mohamed made similar points about Rogers policy on network management during his leadoff keynote presentation. But it was during a Net Neutrality forum presentation the following day by Rogers Chief Strategy Office Mike Lee that we got to the meat of the topic; three of his slides articulate the story:

followed by:

followed by:

In his commentary, Mike pointed out that the focus of Rogers’ network management policy is on optimizing the behavior of the network such as to give customers the response they expect. Other points Mike made:

• In today’s world a service provider needs to deliver the best possible experience for the broadest range of customers.
• Rogers primary business is providing Internet access in a market that has a focus on speed and accessibility.
• Rogers is not in the business of managing applications or specific customer uses.
• Rogers’ traffic management is designed specifically so that Skype works well.
• The only throttling of traffic relates to p2p file sharing traffic (i.e. BitTorrent) to which a dedicated channel is assigned so that p2p traffic does not swamp the network and interfere with other customers’ access to the network.
• In response to query from the audience, Rogers only provides network management for their retail customers. Any MVNO using the Rogers backbone via a wholesale arrangement gets the “raw” Internet and must establish their own network management practices.

Mike’s presentation was followed by Skype’s Christopher Libertelli, Director of North American Government Relations, making Skype’s usual pitch supporting network neutrality. The final forum participant was Dave Caputo, CEO of Sandvine, a provider of network infrastructure software focused on improving the quality of customer experience. Dave’s main point was that an unmanaged network does not equate to network neutrality; however, Internet service providers have the most to gain from permitting the diversity that attracts the most customers.

In the end all three agreed that a focus on the customer experience, while managing the network only to the level of protecting the network’s integrity while achieving customer satisfaction, will make a sustainable win-win for both the network operator and the end user.

But the Rogers’ approach to network management really hit home when, the day after the forum, I found a post by Skype’s Director of EU Government Relations, Jean-Jacques Sahel, “’You touch my Skype, you touch my freedom of expression and communication’ – access to the Internet recognised as a fundamental human right (at last)” where it appears the European Parliament is at odds with individual European governments over net neutrality issues.

EU law should ensure that citizens can exercise their freedom of expression and communication and can benefit from Internet access that is open, taking into account the requirements expressed by users to make use of, and distribute, content, applications and services on the Internet. Access to Internet content, services and applications, as confirmed by the French Conseil Constitutionnel, is an explicit part of the fundamental rights of citizens to hold opinions and to receive and impart information and ideas without interference and regardless of frontiers. Additionally, unrestricted Internet access to content, services and applications is also a necessity for the preservation of the effectiveness of European and national policies designed to combat social exclusion, promote education, training, employment, etc.

Seems like some European carriers have not quite yet got the message being put forward by Rogers – these operators can’t quite deal with the gradual shift in power from the carrier to the consumer.

My own experience: When I am able to run SlingPlayer for BlackBerry over Rogers 3G service, whereas AT&T feels that this application would overload their network, I am getting the response I expect. When Skype video calling runs such that, on full screen mode, I feel the other party appears to be “across the desk” I am getting the response i expect. When Rogers is offering WiFi-based services that complement their 3G network service I get the response I expect (hello Verizon!).

Bottom line: Under new CEO Nadir Mohammed Rogers’ focus is on the customer experience as their ultimate sustainable advantage. Their network management practices address network integrity issues: spam, viruses, denial of service attacks and ensuring that p2p file sharing does not deprive others of their expected service level. They simply do not have the time nor resources to worry about “limiting” or manipulating access to Internet traffic based on applications or offerings.

Certainly there are still issues outstanding at Rogers with respect to, say, roaming charges and length of contracts. But, in response to my question to Nadir about roaming charges, he stated there is currently a disconnect when there is such a disparity between local and roaming “per MB” data charges. However, he continued by saying that this is an area that Rogers is reviewing. In fact, Alec Saunders found a “customer service fairy” when he called Rogers this past week in anticipation of a forthcoming trip to the U.S. On the other hand, Alec would like to see increased upload speeds for the coming flood of video applications. (DOCSIS 3.0, anyone?)

In summary, Rogers appears to be establishing a world-leading benchmark for adhering to application-agnostic net neutrality policies in practice; they are not simply mouthing the network neutrality message but also executing on it.

Footnotes:

• My thanks to Rogers CSO Mike Lee for providing me with a copy of slides used at his Net Neutrality forum presentation at the Canadian Telecom Summit.
• Rogers WiFi-based services include participation in the Canadian HotSpot Network and Rogers TalkSpotTM service that allows one to make voice calls via any WiFi access point in Canada for a fixed monthly fee.

(As for the issues Skype is facing with respect to offering SkypeIn, Skype To Go, Skype for iPhone and Skype for BlackBerry in Canada – that will be the subject of another post. But they are NOT Rogers issues.)

Full disclosure: the author is a full paying Rogers customer for all their services: wireless, cableTV, high speed Internet and Home Phone.

I first met iotum CEO Alec Saunders as a competitor in the Canadian PC software market back in 1994. I was Canadian Country Manager for Quarterdeck whose QEMM-386 memory manager had been the tops-selling utility for DOS-based PC’s; Alec was Microsoft’s Canada’s Product Manager for DOS where they were introducing some memory management techniques into DOS 5 and DOS 6. (All to deal with the violation of the Bill Gates’-attributed memory maximum statement “640K is more memory than anyone will ever need.”)

But Quarterdeck’s development team kept coming up with ingenious ways to move drivers and other small utility programs outside the “640K” limit. QEMM-386 allowed users to, say, connect to networks while running multiple programs in this memory constrained environment using Quarterdeck’s DESQview. With the introduction of DOS 5 in 1991 and DOS 6 in 1993, QEMM-386 sales actually increased as awareness of memory management as a resource issue increased. Of course the introduction of Window 95 in August 1995 killed the need for a memory management utility altogether. But the point here is that Alec and I participated in a competitive environment that was actually mutually beneficial to us both; thus defining “co-opetition”.

We both moved on – Alec to Microsoft headquarters to become the original Internet Explorer Product Manager, myself to Los Angeles to work with a restructuring team at Quarterdeck. We would meet at conventions (usually Comdex) and occasionally exchange emails and phone calls for whatever business reasons. Alec returned to Ottawa in 2001 to take up product management and marketing positions with a couple of startups.

In April, 2004 I received a phone call from Howard Thaw, another acquaintance from my days involved with distribution of PC hardware and software in Canada, asking me to have a coffee with him during one of my trips to Ottawa on another project. He presented me with documents supporting his and Alec’s proposal to start up a new venture involving “applications that take advantage of the opportunities opened up by the emerging IP-based communications space”. The philosophy behind this goal is summed up in Alec’s Voice 2.0 Manifesto, pointing out that the value-add going forward in the communications space will be the applications.

After several iterations and developing some unique software, as well as winning a DEMO God award in 2006 iotum launched in the fall 2o07, initially as a Facebook application, Free Conference Call, a multi-party conference calling service which evolved over time into supporting the complete conference call process; the outcome then relaunched as CalliFlower in June, 2008. Through all this time I have also been privy to many of the financing trials and tribulations Alec and Howard have encountered as a startup.

Fast forward to the fall of 2008. iotum had decided there was an business opportunity in making an iPhone application for participants in CalliFlower conference calls.

Update, April 22, 2009: The posts previously linked here related to an issue that has subsequently been resolved satisfactorily with the developer who was the subject of the posts; the posts have been removed. However, I leave the remaining content in this post as it does make a point about how any outsourced service or outside contractor needs to be viewed as a team member even though they don’t have full “employee” status.

However, Alec sums up the situation very succinctly in the third post:

The lesson to be learned here is pretty simple.  When you bring a contractor into your organization you’re adding that person, albeit temporarily, to your team.  You expect to be able to work with them, through good and bad. To do that demands a certain generosity of spirit from all members of the team.

All across America, businesses are waking up to the reality that in this economic environment, team work is the key to getting through this crisis.  Whether it’s GM and their unions, the banks and their mortgagees, or the tech start-ups in Silicon Valley, businesses are learning that accommodation, flexibility, and sacrifice, not egos, are the formula for success.

When [a contract developer] failed on his first deliverable as part of our team, we simply worked through it with him.  But when we asked him to return the favour, he refused.   That’s why, in my opinion, he [was] not [at the time] much of a team player.

And that’s the reason I couldn’t [at the time] recommend [developer name] to my friend.

We had a similar experience at Quarterdeck when developing a Voice Over IP application called WebTalk in 1995. We needed additional resources beyond our internal development team, including a developer company to develop the codecs. Part way through the project, they tried an “extortionist” play. They quickly learned that, if you take on a development contract, it’s not about just delivering code; it’s also about demonstrating that you have the business smarts to realize that, even when you’re not an employee, you – as a contracted developer – better be prepared to play as a member of the team contracting your development expertise. And, as a team member, you work through the problems, including the financial issues, with from the perspective of being a team member.

There are many opportunities arising for developers in today’s communications markets, not only in the smartphone app store space (Apple, BlackBerry,etc.) but also with other platforms such as Skype and WordPress. If you’re a contract developer with this expertise, ensure you are comfortable, not only with the thrill of technical development but also the ride of working with startups who may be otherwise resource challenged, including financially – especially in today’s economic environment. You never know when your co-operation may result in having been a participant in that breakthrough “brass ring” opportunity.

In my thirteen years of running a consulting business, my clients have occasionally been challenged financially. Yet, in all circumstances, they brought their issues to me, we worked out a payment or compensation plan and I eventually was paid. (Some careers died in the process where a management change was involved.) But without that flexibility, I would never have received in one case, about two years later, funds that I needed to help my oldest son complete his medical degree at Stanford.

In today’s environment, rife with both opportunities yet significant economic challenges and barriers, it’s about building relationships for the long term, not burning bridges for short term gain.

Yesterday’s announcement of Grand Central’s rebirth as Google Voice drew a lot of attention from both the mainstream media and blogger world. In following the IP-based communications world over the past three years, I have come to believe that the only potential real time conversation service provider challenger to Skype could come from Google. It has huge user registration numbers at a world class scale; however, its primary business is built around how many ways can one drill down within Search and then offer contextually relevant advertising. On the other hand, they appear to be looking to complement search-embedded activities, such as Search within GMail, with real time conversation capabilities.

For instance the recently launched GMail Voice and Video chat allows users to migrate to real time conversations directly off an email message. Great in the context of building a dialogue out of an email’s subject and content. I’ve tried it and it works but have not had reason to use it in my everyday activity; on the other hand, if I  find reason to use it, it’s there and easy to launch. A great example of voice-enabling a conversation in the context of an ongoing dialogue.

Show me a platform that is not supported by Google’s GTalk chat offering. Almost every PC and mobile device I receive for evaluation is supported by GTalk. Yet, I only have about ten contacts on GTalk and may get a message once every week or two. There’s a reason Alec Saunders came out recently to say “Ditching all IM Systems except Skype!”. On the other hand, GTalk is there; it’s handy if someone contacts me via GTalk.

While Google Voice lists its entire feature set here, Kim Peterson’s post, “Free long-distance? Oh yeah, Google;s going there”, on the Topstocks blog at Microsoft’s Money Central, highlights the the top ones:

In a nutshell, here’s what you’ll be able to do with the free program:

1. Get a single phone number that routes calls to your cell, work and home phones simultaneously.

2. Call numbers in the U.S. for free. And call internationally for ridiculously low rates — I’m talking 2 cents a minute to China.

3. Get your voicemail transcribed into e-mail or text messages.

4. Make free conference calls.

5. Get your voicemail on the Web.

Mainstream media, however, could only focus on how Google Voice would provide competition to eBay’s Skype. New York Times’ Miguel Helft starts out with:

“Google stepped up its attack on the telecommunications industry on Thursday with a free service called Google Voice that, if successful, could chip away at the revenue of companies big and small, like eBay, which owns Skype, telephone companies and a string of technology start-up firms.”

Ryan Singel at Wired’s Epicenter:

When Google announced its integrated phone service called Google Voice Thursday, it said something very loud.

Google is saying it wants to be the world’s communication hub, and hundreds of companies — ranging from mobile phone operators to Skype to Microsoft better be listening.

Further down the same article, Ben Lilienthal, now general manager of audio services for Citrix Online – and a Skype partner for full service audio conferencing, “isn’t convinced that businesses will move to the service very soon”, Ben went on to say:

“For a consumer, it is a pretty compelling service,” Lilienthal said. “But I think if you are a business user, it’s not necessarily a road you would want to go down. There are a bunch of things business users worry about that consumers don’t. If it doesn’t work, can I get a live person on the phone? Is it reliable? What kind of quality of service can I get?”

Many reporters and bloggers had a chance to upgrade their Grand Central service to Google Voice yesterday. However, being a Canadian I never acquired a Grand Central number for the same reason as fellow Canadian and Fonolo CEO Shai Berger:

….. this problem is not unique. Many similar services don’t extend into Canada. It’s still hard to get a Canadian Skype-In number for example. Ooma has the same problem and when I spoke to some senior people at Ooma last year they cited complicated regulatory issues (including a word I hadn’t heard before: “homologation“. Always like learning a new word). I don’t expect Grand Central/Google Voice to address this any time soon and I don’t hold it against them — the extra hassle is probably not worth it in the early stage of the game.

But Shai also gives a more generic reason for not being a user of Grand Central:

That 2nd item is a bigger issue because it effects everyone, not just Canadians. Our mental model for interacting with phones is that “if you called me from number X” I can hit redial to call you back. (Or I can store that number in my address book for later.) To fix this we either have to change user behavior (tough) or spoof the caller-ID (technically doable but quasi-legal). The only Voice 2.0 company I know of that has solved this problem is Truphone, which does transmit your Truphone number as to the destination. [Author’s note: SkypeOut also provides callerID using either your Skype Online number or your “Skype registered” mobile phone number.]

But there’s also a user interface issue when you look at how a call is placed. Further down in Kim’s post (and similarly described in the NYT post referenced above):

Here’s how it works: You call into your voice mail on Google Voice, and from there you get transferred to a dial tone. You can call any number at that point [author’s italics]. You also have a central Web site that will show your voice mails and manage your account.

So I have to call one number in order to call the number I want (and, at that point, there’s probably no linkage to my device’s native address book), eh?

And, finally, Om Malik points out a few issues, including how users will pay for international calls:

Just as a warning, the upgrade to Google Voice won’t allow you to take your Grand Central address book with you, since the new system uses Google Contacts. In addition, the service doesn’t work with those of you who have Google Apps accounts; you’ll need Gmail accounts. Lastly, they make you use Google Checkout to pay for international minutes. No thanks — I am happy paying with PayPal and/or credit cards. [author’s italics]

Let’s go back to Skype (and iSkoot):

1. I want to locate a phone number (or SkypeID) in my native mobile handset address book, hit the green “Call” button on my mobile phone and launch a voice call. Real simple UI here. On a mobile device, such as BlackBerry or Nokia N-series, I can do this with iSkoot for making both Skype-to-Skype or SkypeOut calls.
2. I have 14 years invested in my current office and mobile phone numbers. I’m not ready to make any changes. iSkoot, on my BlackBerry, and Truphone on both BlackBerry and iPhone work with each device’s existing phone number.
3. SkypeOut (and iSkoot, when making SkypeOut calls from a BlackBerry or Nokia N-Series S60 phone) provides my mobile phone number as a callerID. A party who needs to return my call can simply click on the number and reach me. (and, if in my native address book, readily see who has called).
4. With Skype I can make payments via PayPal or directly on my credit card.

While I will try Google Voice once they expand to supporting Canadian numbers, its modus operandi certainly does not come up to Skype’s standards for a truly user friendly calling experience. On the other hand its call screening, call management and voicemail handling features certainly provide some new challenges for Skype to watch out for.

Bottom line: today we all look for competition in the wireless carrier and mobile smartphone markets. But there are key differentiating features. It’s healthy to see two players such as Skype and Google, both with world scale user bases, in the real time conversation space. But there are differences, in the individual end users will adopt whatever provides the most convenience for his/her individual needs.

Full disclosure: the author has Bell Canada lines for his home office, including fax, requirements while using Rogers Home Phone for family voice calling. He also uses Skype for most of his business conversation requirements, especially long distance and international calling. Just as different smartphones meet different user needs, we’re probably going to find that many of us need multiple services for all our real time conversation needs.

Finally let’s look at one more slide from Skype President Josh Silverman’s analyst presentation earlier this week:

Google has a little bit of work to do to round out an equivalent ecosystem.

Check out Kim’s post for links to several other bloggers’ comments as well.

Andrew Hansen: Skype makes a small ripple, but no Splash with new VM features.

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• Google Launching GrandCentral As Google Voice (searchenginewatch.com)
• Run YourOrganization.com with Free Google Apps (blogs.harvardbusiness.org)

At the BlackBerry  Developer Conference last fall, RIM announced that they would be launching their BlackBerry applications store in March, 2009. While it’s early in March, RIM last night provided significant details leading up to the launch of BlackBerry App World later this month. Rather than doing a launch at some big event, in these times where all costs are under surveillance, they had given several weblogs a “heads up” about a URL which readers could visit after 10 p.m. EST to learn about “an exciting BlackBerry announcement”.

So what did the announcement contain? Links to:

• register as a user at BlackBerry App World (to find the requested IMEI number go to Options |Status on your BlackBerry; this is NOT the more familiar PIN number)
• signup for a PayPal account, should you not have one. Since PayPal is a “trusted” payment system that readily and easily handles multiple currency issues, it will be the sole App World payment channel initially
• get the latest version of BlackBerry firmware (BlackBerry OS 4.2 or later required, note that carrier-specific BlackBerry OS 4.5 upgrades are now available for all 8xx0 BlackBerry Pearl, Curve and 88×0).
• learn more about the BlackBerry App World application submission process

On reviewing the revised Developer FAQ and reading other blog postings, Alec Saunders points out two new details:

• Pricing Tiers: while Tier 1 represents Free applications, Tier 2 starts at $2.99. Obviously RIM expects applications to be of appropriate value in order to start charging.
• Potential for additional RIM revenues related to transaction-based activities within an application: Is RIM putting out market feelers on this subject?

Alec says, “Both are smart moves”. Stop by his post his observations.

The real market action starts once we get to download and install some applications. At eComm 2009 yesterday, we witnessed a very innovative application for the iPhone. Smule’s Orcarina establishes a benchmark, not for the application itself, but for how far developers can bring “out-of-the-box” thinking into taking smartphones to a new level of entertainment and business acumen.

James Kendrick, jkontherun: BlackBerry paid apps to start at $2.99, require PayPal

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• BlackBerry Names App Store, Gets Ready to Launch (appscout.com)

With the launch of Skype for Windows 4.0, Skype delivered its first client incorporating Skype’s new superwideband SILK codec providing a new user experience in voice calling. For example, Alec Saunders in “Skype 4.0 audio: smooth as SILK”:

Perhaps the biggest improvement, though, is audio quality.  We all thought that Skype audio was great, right?  Skype’s internally developed SILK codec slipped into the final release, despite not having been in prior betas. A wideband codec that delivers the goods at half the bitrate of prior codecs, SILK makes talking on Skype a pure pleasure.

The SILK codec will be rolled out with the final release of Skype for Mac 2.8 (currently in beta but without the SILK codec) in April and in the next Linux release (no date given). The coding was designed to allow easy embedding into hardware devices, such as sound cards, headphones and Skype phones. But this still limits the SILK experience to Skype-to-Skype calls. So they looked at the question of how can Skype most readily advance the deployment of this high quality codec  and the resulting user experience at billions of additional voice conversation end points?

At eComm 2009 this afternoon Skype announced, during Jonathan Christensen’s keynote presentation, that the SILK codec will be licensable, royalty-free, to device manufacturers and others; it has been designed independent from Skype signaling protocols such that it can be used in voice streams incorporating the SIP protocol. Jonathan mentioned that there is no requirement to use the SILK codec in conjunction with a Skype implementation.

From an interview with Jonathan Christensen, Skype’s GM for Audio and Video, with Alec Saunders in Skype’s SILKen bear hug: “Further, SILK media streams pass unchanged across Skype’s own media gateways, meaning that SIP endpoints have suddenly become much more compelling in the Skype world”.  Alec goes on to discuss two reasons for Skype’s strategy: (i) to spread superwideband audio everywhere and (ii) to give existing carriers a bear hug. Read the post for details.

In his post on this announcement, Jonathan pointed out what the three year Skype SILK development process focused on:

• • improving audio bandwidth going from 8 kHz to 12 kHz, meaning that a SILK conversation sounds like you are in the same room as the person you are speaking with
  • providing real-time bandwidth scalability to deal with degraded network conditions
  • balancing codec optimization between voice, music and background noise, each of which can have an impact on the overall user experience
  • delivering a robust solution that delivers a more consistent audio experience, regardless of network conditions and an individual user’s voice signature

I have watched as a wireless carrier attempts at new video calling services are introduced and subsequently fail due to a lack of adoption – the primary reason being there are too few devices out there supporting video calling and thus, there’s nobody to whom one can make a wireless video call. Skype’s announcement today overcomes a major barrier to allowing a much broader user base to take advantage of superwideband audio. It’s a first, but key, step towards a broader goal than “Skype Everywhere”, namely, superwideband audio on all voice calling.

Finally, this afternoon I had a chance to meet many members of the SILK development team who attended Jonathan’s presentation. They deserve kudos and congratulations for all their ground breaking efforts and success in setting new standards in voice call quality.

Developers can find more information at Skype’s SILK website.

Phil Wolff, Skype Journal comments on the SILK performance slides shown at the presentation: SILK performs better

Update: The transcript of Jonathan Christensen’s Codec Evolution and Industry Proposal presentation.

Since its launch Tuesday, Skype for Windows 4.0 Gold has received some interesting coverage:

• David Pogue, New York Times: in addition to his column discussed here yesterday, he has produced an amusing video: Skype 4.0: The Cheapskate where a video starring Mr. Cheapskate shows a Skype video session with his daughter, Kim Cheapskate, obviously a student. But it also serves as a humorous introduction to Skype for Windows 4.0′s features.
• Alec Saunders: Saunderslog.com: Skype 4.0 audio: smooth as SILK:

Perhaps the biggest improvement, though, is audio quality. We all thought that Skype audio was great, right? Skype’s internally developed SILK codec slipped into the final release, despite not having been in prior betas. A wideband codec that delivers the goods at half the bitrate of prior codecs, SILK makes talking on Skype a pure pleasure.

• Tom Keating: Skype Launches 4.0 with Super Duper Weenie Wideband Codec. Images conjured up when a new codec is lauded with reduced network bandwidth. Obviously Tom has his favorite food hangouts.

Have a good weekend.

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