At last month’s CES I had the opportunity to meet with Skype CEO Josh Silverman and discuss various Skype issues that have arisen over the past year as well as where Skype is headed as a privately owned company. At the time I thought this would result in a normal text-based blog post outlining some of our discussion.

However, when I arrived for the interview I realized it would also be a good occasion to try out the HD video recording feature of a relatively new Canon SD980 camera. Over the past week I have been using a new MacBook’s iMovie and found I could edit it down to a fairly succinct outcome, having eliminated much of my own nervous glitches, personal comments and humming and hawing. Most importantly, Josh makes a much better presenter of Skype’s case than I could ever hope to do in reporting on the interview. The result follows.

In this first portion we talk about

• Skype operating as an independent, private company and the role the new board members can play,
• the Canada Pension Plan Investment Board’s participation as an investor (full disclosure – about 17 million employed or formerly employed Canadians have an interest in CPPIB investments),
• what performance numbers can we expect to see going forward
• the prospects for an IPO
• what’s on the CEO’s radar as priorities for Skype
• what’s going to be available for developer partners

(My apologies to fellow Canadians for not asking about Skype Online numbers in Canada but, given there are regulatory issues involved, I’d probably get the standard “we’d love to do it but…” response. For mention of a Skype service that is being expanded into Canada, see the second portion of the interview with Skype for Mobile VP & GM Russ Shaw.)

In the second portion of the conversation we covered issues such as

• the growth of the Skype developer team
• Skype’s evolving mobile presence, including Skype for BlackBerry and video calling on mobile devices
• the launch of a formal Skype for Business program
• Skype’s video calling as a new pop culture
• Skype and the broadcast television market

Complementary to the “pop culture” discussion here, at Josh’s keynote presentation to the CES Innovation Leaders dinner, he spoke about how Skype video calling has brought to consumers the most effective realization of AT&T’s 1964 World’s Fair video calling vision where they introduced a very primitive video calling setup.

Bottom line: what can we expect to see from Skype in 2010?

• a revitalized developer program built around a more comprehensive platform from which developers can, amongst other features, embed Skype into their applications
• Skype access on many more mobile platforms as well as taking advantage of wireless carriers’ recognition of Skype as a mainstream telecommunications environment
• expansion of video calling services, including a strong role in the introduction of Internet services as a feature on a new generation of television sets;
• launch of a formal comprehensive Skype for Business program targeted at small-to-medium businesses
• many more Skype video interviews on broadcast media – for example, Skype video (and voice) calling has been used quite extensively by several networks to facilitate communications with Haiti following the earthquake

This is the third of three Skype executive interviews that took place at CES 2010; the others:

• Skype for Mobile: An Interview with Skype’s Russ Shaw
• Skype for Business: An Interview with Skype’s Matt Jordan

Other relevant posts:

• FREETALK Connect: Liberating Small Business from the Telco Oligopoly
• FREETALK’s New Webcam Product Line: Delivering 720p HD to Skype Video Calling
• Skype Video Calling on Your TV? Maybe, Maybe Not: It’s Your Call

Full disclosure: In Store Solutions, producer of the FREETALK line of hardware for Skype, 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.

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In two separate press releases over the past two days, OnState Communications has broadened the scope of its call center offering and made it more readily accessible to businesses without internal IT and communications support.

In the first press release Monday, OnState announced the addition of the Yuuguu screen sharing service that provides call center agents with a tool that facilitates both visual presentations and resolution of customer support issues. Yuuguu’s screen sharing allows a call center agent to have a real time collaboration tool with:

• on demand screen sharing
• moderator control of adding/removing participants
• sharing of keyboard and mouse control amongst participants
• easy escalation of a chat session to desktop sharing
• no download requirement for callers to participate

One significant point: recall that OnState’s chat service, while originating from an agent’s Skype or GTalk account, can be accessed by any caller with a web browser. Once again, using Yuuguu’s screen sharing, an agent can have a screen sharing session with any caller with access to a web browser. Yuuguu’s service is cross-platform, supporting both Windows and Mac PC’s with Linux support to come soon.

From the press release, OnState Partnership with Yuuguu Provides Total Customer Collaboration For Virtual Workforces:

OnState is the first and only provider to include integrated voice, text chat and screen sharing as part of a cost-effective, on-demand virtual communications service. The addition of Yuuguu into OnState’s solution enables sales and support staff and all virtual workers to collaborate with customers by sharing screens or even keyboard and mouse control to help demonstrate solutions or solve problems.

“With Yuuguu screen sharing capabilities, OnState users can now conduct virtual sales calls – from anywhere in the world – with visual presentations, product demonstrations, and interactive communications,” said Pat Kelly, CEO of OnState. “And using real-time screen, keyboard and mouse sharing, support staff can resolve issues, answer questions, and assist customers more efficiently. Best of all, the combined solution is delivered as a secure, device-independent, cloud-based service that requires no installation or embedded applications on the customer side.”

In a second announcement yesterday, OnState announced a partnership with Bandwidth.com as a complete end-to-end IP-based communications service over which a business can operate its entire OnState call center operation “in the cloud”. Basically, if an end user can plug an RJ-45 jack into an Internet service modem or connection, and plug IP-based phones into a router, they can have all the communications infrastructure required for using the OnState service. And  inherently the network supports additional communications modes such as chat and screen sharing, as well as Skype conversations.

Once again call center agents can be located anywhere geographically and access the service via a phone, softphone on a PC, including Skype or GTalk, or mobile phone. While Bandwidth.com is U.S.-based they provide international access with support for international numbers via Voxbone’s service. From the press release, OnState and Bandwidth.com Deliver the Cloud Call Center:

For companies that rely on call centers for sales or customer support, reliability and quality-of-service are key. Bandwidth’s FlexNetwork is architected with full geographic redundancy, with separate signalling and audio facilities for reliability and flexibility. When this is combined with OnState’s cost-effective virtual communications, the resulting solution is one that is highly available, easily scalable, and encourages customer collaboration through multi-modal interfaces like voice, chat, and web.

OnState’s core competence is call center functionality; having come from a legacy call center operation that was acquired by Cisco, it’s in their genes. But as for the underlying communications services, they are becoming more and more agnostic by giving their customers options to select the underlying service provider as well as the communications clients, whether they be a traditional phone set, a mobile phone or a software-based communications client, such as available from Skype or GTalk. It’s a case of the customer defining its requirements and OnState can provide a solution from a buffet of options while delivering on the economic advantages of IP-based communications.

But OnState’s ultimate advantage comes from making it possible for their customers’ customers to access a call center via a simple call from a phone, mobile phone, Skype, GTalk or a Click-to-Call button on a website. And, where the caller has PC access, adding modalities such as chat or screen sharing requires no customer downloads; it just happens via the browser. As highlighted at this fall’s eComm Europe, the value-add comes in minimizing user friction with intelligent decision making tools that value a customer’s time.

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In a story on VoIP Planet, Gerry Blackwell provides a case study of the implementation of OnState’s Virtual Call Center at CyberDefender Corp., an Internet security software and services firm.

CyberDefender’s new director of customer service, Jose Martinez, investigated a few solutions, including traditional Panasonic and Nortel automatic call distribution (ACD) systems. But in the end, Martinez chose a radical on-demand service from start-up OnState Communications, and coupled it with VoIP service from Skype.

“OnState was very competitive,” he says. “But not only was it priced right—and this was very important to us—they were able to implement very quickly.” It took barely a week to get agents up and running and trained.

Gerry goes on to talk about the cost savings over traditional premise-based and hosted call center solutions, the visibility and transparency of the call center activity in real time and the ability to rapidly scale the service as they add more staff. He then quotes OnState CEO Pat Kelly:

“Conversation management and knowing about people are the most important elements in our application,” says OnState CEO Pat Kelly. “We’re interested in phones, but the problems our customers come to us with are not really about phones.”

“We’re more concerned with understanding the business presence of employees. What can they do—what skills do they have, what kinds of calls can they answer? And what are they doing at this moment. Are they at work today? Are they free? Are they involved in a chat? Are they on a phone call?”

Read the entire article to learn more about how OnState handles calls, its integration with Skype and Google Talk, the competition (such as it is), costs and OnState’s DNA that underlies its legitimacy as a call center solution.

Bottom Line: A win for CyberDefender and a win for their customers with improved customer service and an ability to scale appropriately as demand varies over time. And a a Voice 2.0 world application where Skype is contributing to business model disruption.

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Legion are the stories of small and medium businesses who are using Skype for their worldwide communications operations.

• Skype is the cornerstone for keeping Toronto-based  b5media’s worldwide staff of bloggers, editors, developers and executives in touch via both informal and formal conversations.
• SeeWorthy gets an assist from Skype when communicating with their Taiwanese supplier (via an Alberta-based translator), North American and Caribbean agents, and prospective European distributors as well as their customers.
• A Canadian-headquartered resource company is using Skype voice and IM for communications with their operations in Asia; their biggest challenge involves time-zone issues. Skype chat’s inherent asynchronous nature helps to address that issue.

Skype itself claims that about 30% of all its user activity is business related. I often encounter small businesses who have a wealth of stories about how Skype contributes to their business success.

But during a recent conversation with OnState CEO Pat Kelly I learned about how Skype is stealthing its way into medium to large enterprises. Pat discussed two examples (who will remain generic until case studies are available):

• OnState received an enquiry from a major North American parts distributor whose operations involve agents, resellers and business customers spread out across North America. While this company has an internal IT team, the CFO was focused on significant cost reductions for their call center operations. He has now contracted OnState to provide voice, chat and other customer relationship communications activities that do not simply save money but provide additional communications processes such as IM with its inherent presence and chat features. Once the contract was signed, the CFO mentioned he would guide his IT personnel with their role in the implementation.
• A European country manager for a worldwide, US-headquartered business found that he was getting charge-backs for “corporate” communications services that did not meet his particular needs. He had enough autonomy that he investigated OnState’s services, went through not only the technical specifications but also the legal reviews and business process requirements. He is now meeting the communications needs of his business ecosystem using Skype and OnState’s other auxiliary services for call center and virtual PBX requirements. Subsequently other European subsidiaries of the same company are implementing OnState’s services. Yet this is a situation where the U.S. head office has yet to be contacted about what additional opportunities for Skype and OnState may exist within their business.

Pat’s key point is that, in today’s economically stressed environments, there’s a trend where CFO’s and business unit managers are making the key communications services decisions in larger enterprises in order to meet their financial goals. IT personnel are playing little or no role in the decision making although they may be involved to a limited degree in the implementation. What are Pat’s key observations?

• The consumer experience with Skype is stealthing its way into business implementations, not only with prosumers and small businesses but also at the business unit level within larger enterprises.
• Why? Skype just plain works. There are no firewall issues; OnState’s SaaS model eliminates capital investment for PBX’s and related infrastructure.
• It’s relatively easy to implement.
• Economic pressures are driving adoption.
• Where a business partner or customer has Skype also, HD Voice, incorporating SILK, provide for more productive voice conversations.
• It’s not simply about using a technical mashup across multiple services (Skype, Google, and Voxbone, for example) involved in OnState implementations; it’s a “business mashup” involving business processes and employee acceptance.

It’s a repeat of a trend that drove personal computers into larger enterprises twenty-five years ago. I recall one story where a Canadian bank Vice President found an employee with a PC that had a modem attached (with, at best, a 1200 kbps speed). The modem was ordered disconnected! Bank security was going to be upheld despite technology progress. Four years later that same bank ordered over 10,000 PC cards from my employer of the day for inclusion in their new, at the time, teller terminal system.

Bottom Line: Even if it’s not totally free it’s the raw cost savings that are driving Skype adoption, sometimes in co-operation with their business software partners. It’s about not only lower calling costs but also the elimination of capital asset costs. For some business markets Skype is stealthing its way into business communications infrastructure.

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OnState Communications provides hosted communications services that allow any size of business to operate a call center or PBX with low cost worldwide access via Skype, Skype Online numbers or the PSTN, including toll-free and DID numbers. Low monthly fees and service charges (covering inbound numbers and outbound PSTN calling) along with zero capital expenditures are the selling points that have driven evaluation and adoption across a range of businesses.

During early May OnState will be upgrading their services to add:

• a “My Account” dashboard that tracks credits and charges for services such as toll-free numbers and SkypeOut charges in real time
• OnState Mobile allows employees to use their mobile phones (such as iPhone and BlackBerry) to participate as part of a call center operation, either directly receiving customer calls, transferring to another employee in the company, or acting as a secondary support resource to a business’s core sales and support teams
• Warm Transfer and Conferencing for OnState Anywhere — A warm transfer allows an agent to speak with a new caller before transferring the original caller to provide a better calling experience.
• Outbound calling with Caller ID in OnState Anywhere. Enables calling from any device (Skype, SIP soft phone, etc) with a unique Caller ID displayed to your customers.
• Support for SIP Phones. While most calls are handled via softphones, such as the Skype client, OnState services now support selected Polycomm and Grandstream SIP phone sets.
• Several other service tweeks and modifications; check out the OnState blog post for the details.

OnState will be upgrading services to all their current clients over the first ten days of May. As with many other players in the economically challenged Voice 2.0 world, I confirmed in a recent interview with OnState CEO Pat Kelly that they are finding increasing demand in the small-to-medium business market for their SaaS-based services. The key selling point remains offering a disruptively cost effective way to communicate across an enterprise ecosystem comprising employees, customers and suppliers.

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OnState’s Virtual PBX incorporates Skype as a contributor to lower cost, yet more productive, small business communications management activities.

A mainstay for communications in any office with at least a few employees is the need to accept incoming calls, determine who is calling, what is their general need and getting the call to the right employee. In the interest of effective and productive customer and supplier relations, calls need an automated way to reach sales personnel, customer care, accounting  or technical support or “the boss”. Preferably this call management should be handled without any human intervention; over the past twenty or more years this has resulted in the evolution of increasingly effective Private Branch Exchange (“PBX”) offerings from telecomm equipment suppliers. And it traditionally required a reasonably demanding capital expense, from $15,000 up.

The basic functions of a PBX include:

• Receiving and answering a call from an external caller
• Offering a menu of options to determine to whom the call should be connected
• Transferring the call in response to answers provided either by entering alphanumeric or dialpad information or by using speech recognition.
• Accepting, recording and managing voice mails if nobody is available to take a call
• Ability to make a subsequent call transfer if deemed necessary

However, IP-based communications technology along with web 2.0 tools provide opportunities for enhancing the PBX to build more productive and effective business processes when it comes to managing relationships with both suppliers and customers. For instance:

• An individual agent portal for overall conversation management
• Intelligent call queuing would permit an “occupied” employee to either put a caller into a queue for answering when available or transfer a caller to another employee with the skills to handle the call
• Chat sessions can be offered as either an alternative or complement to voice conversations
• Building a searchable call archive integrated into an email system such as GMail.
• Making call transfer destinations independent of the recipient’s geographical location, whether “in the office”, at a home office or out “on the road”.
• Reducing and minimizing the costs associated with various PBX services.

Building on its Call Center experience OnState has launched its Virtual PBX which provides all this functionality as well as:

• Receives calls via Skype, SkypeIn as well as Local DID numbers and toll free numbers in over 20 countries
• Call transfer to employees, agents and other designated recipients on their Skype-enabled PC, landline phones or mobile independent of geographical location
• An extension-based agent/employee/representative portal for managing incoming calls, including call waiting notification, queuing and redirection
• Integration into GMail, Zimbra and Salesforce.com

A few weeks ago, OnState CEO Pat Kelly was our guest on a SquawkBox conference call where he provided more details about OnState’s Virtual PBX, including a sharable slide show presentation accessible as a Google document.

Bottom line; for as little as $15 per month per seat and no capital investment, small to medium enterprises and organizations as well can establish an enhanced PBX capability to facilitate both more productive business processes as well as more cost effective communications.

Definitely a business model disrupter.

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OnState has been the pioneer in providing full service call center solutions that not only employ Skype’s various conversation modes but also use Zimbra to offer a complete multi-modal Unified Communications suite that incorporates conversation recording and archiving, email management and call back capabilities. Call center agents can be contacted via live chat, free inbound Skype calls, toll-free inbound lines as well as traditional PSTN lines and email.

As an initial target market, they have built a full service solution for technical support operations such as that operated by B4 Consulting, a SAP Channel Partner. B4 Consulting needs to provide 24/7 support as they are involved in SAP Business One installations across enterprises with worldwide operations. As a result they have implemented OnState’s Call Center for Skype to deliver real-time customer support. From the press release:

The OnState CallCenter for Skype™ is integral to B4 Consulting’s delivery of its global Application Management Services for the SAP Business One application, SAP’s affordable business management solution for growing businesses. B4 Consulting’s Web-integrated call center capitalizes on the full range of OnState’s multiple communications modes and customer contact options. This includes concurrent Skype chat and voice,Skype voicemail, dynamic call recording, and callbacks. Customers can initiate contact with agents via live chat, free inbound Skype calls, toll-free inbound lines, as well as non-Skype traditional landline and email. Additionally, the OnState CallCenter is integrated with B4 Consulting’s customer relationship management system.

It is interesting to note B4′s observation that “most customer conversations begin with voice and evolve to other communication modes, principally chat.” And once communications with their customers have commenced, live chat is the favored communications mode. All customer contact, conversations, email, and chat exchanges are easily recorded in B4 Consulting’s CRM system for historical reference.

Two quotes from the press release help to put this into perspective:

“To deliver technical support services on a global basis, B4 is leveraging nearly every feature within OnState’s portfolio of customer contact solutions,” said Pat Kelly, president and CEO of OnState. “And, they are using them in a completely integrated manner and sometimes simultaneously to deliver highly-responsive support services to their customers using SAP Business One.” Moreover, as call center and support portal functions are Skype-based and Web-enabled, support can be delivered from anywhere at anytime. Therefore, B4 Consulting’s support customers can rely on call center agents who are subject-matter experts in SAP Business One.

“When we launched our Application Management Services [AMS] for SAP Business One, we couldn’t afford the time and resources to establish a traditional call center – yet we wanted to provide premium, enterprise-level services on a global basis,” noted Frank Paetzold, vice president of delivery and AMS at B4 Consulting. “Establishing a sophisticated call center was quick, easy and affordable with OnState. The beauty of OnState, however, goes beyond affordability. Implementing OnState requires no server hardware or software and minimal agent-based client software installation. OnState eliminates barriers to communication, enabling us to give customers the freedom to decide how and when they want to communicate with us as well as the option for self-service through our online knowledge portal.”

OnState’s three executive team members each bring over 20 years’ experience with call center requirements. It is a prime example where, while Skype can provide the real-time conversation infrastructure, unique experience, knowledge and resources are required to deliver a full call center solution with both the connectivity infrastructure and back office functionality required to deliver a fully operational solution.

Tags: OnState, OnState Call Center, Unified Communications, Skype, B4 Consulting, SAP Business One, Pat Kelly, Frank Petzold, SAP, SAP Channel Partner

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Previous posts have discussed OnState’s Call Center for Skype and its ability to manage customer enquiries by voice and/or chat. A conversation is launched via a website with three options (Skype, Callback and Chat) or via a SkypeIn number (where available). This week OnState added to their portfolio of communications options with the availability of toll-free services for Skype which can be integrated into the OnState CallCenter solution.

What this means is that an OnState-enabled business simply obtains a toll-free number in the U.S. or Canada and the customer enquiries can be directed to any Skype-enabled agent worldwide. Ideal for, say, the European business that wants to take enquiries from the U.S. and/or Canada using agents based in Europe or for Canadian businesses who cannot get SkypeIn numbers. From the press release:

“Skype changed the communications industry with its software and global calling rates,” noted [OnState CEO Pat] Kelly, “Now, OnState continues to challenge the call center market by providing integrated toll-free service at an industry-redefining price. All a customer needs to do is fire-up an OnState toll-free number in the US or Canada and that number can go anywhere Skype can go – this is revolutionary for traditional call centers.”

The service will soon be expanded to include European toll-free numbers.

Bottom line is that businesses can invoke OnState’s CallCenter service and take advantage of Skype’s low operating costs regardless of whether the customer comes via a website or is attracted by a print or broadcast media advertisement or press item. Adding toll-free numbers simply tells the customer “we care about your interest” in a product or service.

Tags: Skype, OnState, OnState Call Center, Pat Kelly