Apparently the Skype-Nokia partnership announcement has irked some legacy European carriers such as Vodafone, O2 and Orange according to Mobile Today:

A rift has emerged between Nokia and operators over its plans to incorporate Skype onto its Nseries handsets, Mobile has learned.

O2 and Orange responded furiously to Nokia’s declaration that it will equip its upcoming flagship Nseries device, the N97, with Skype.

If the row is not resolved the two operators may refuse to stock the N97 – or any future Nseries handsets containing Skype – unless Nokia strips out the Skype client. The two operators are understood to have vented their anger in high-level discussions, which involved group level executives from Nokia.

However, Hutcheson’s 3 has seen great success in providing access to Skype for calling Skype contacts, making SkypeOut calls, exchanging presence information and holding text chat conversations. For the past year I have been making calls to Skype contacts from my BlackBerry 8820 and Bold via iSkoot and IM+ for Skype over my Rogers subscription. And I have been beta testing Truphone for BlackBerry.

Unfortunately for these carriers they did not attend last year’s eComm conference where iSkoot CEO Mark Jacobstein made a presentation “Operator Friendly VoIP: No Longer an Oxymoron”.

So what’s the background and where can having Skype access as a carrier offering be of a win, not only for Skype and its partners such as iSkoot, but also for the carriers:

The background:

• A scalable, robust channel for handling voice over wireless already exists. The data channel can transmit text plus information related to setting up a voice call.
• Device resource issues, especially battery life but also processor speed, memory resources and display issues, challenge the ability of current smartphones to handle calls using a VoIP client at a sustainably satisfactory level of reliability.

Recall the basics of the architecture and voice call process:

1. Use the data channel for handling text messages and the information required to set up a Skype voice call session
2. Use the existing voice channel for making the voice connection from the mobile device to an iSkoot/Skype/etc. server via a “local” point of presence.
3. The client on the device is designed to handle Skype IM over the data channel; however, when a voice call to a Skype contact is initiated, data for setting up the voice call is sent to the server. The server then triggers a wireless call from the server back to the mobile device while also calling the party on Skype from the Skype session on the server. (Effectively the Skype session on the server uses a variant on Skype’s inherent multi-party calling feature.)

Why is this architecture carrier friendly?

• Carriers continue to obtain revenues for local minutes
• Data plans are required to handle text and the call setup information
• There are NO termination charges for calls to Skype contacts
• Carriers can share in the revenue for SkypeOut calls
• The ability to advertise “free calling worldwide” is a very attractive marketing message for customer acquisition.
• At least in the case of the Skypephone, actual hardware costs eliminate the need to subsidize the handset. This advantage will obviously vary by device vendor.

AT&T eventually recognized that the iPhone presented a significant market share grab opportunity for recruiting customers away from its competitors. 3 accelerated its rollout of Skypephone once it saw the market response in the UK. New carriers launching in Canada and the U.S. will be looking for programs to attract customers from the incumbent wireless carriers. Thinking outside the traditional business model is necessary for carrier survival; cost effective innovation, for both the customer and carrier, will always win out in the long term.

Vodafone, Orange, O2 and others will have to succumb to the market reality that the Skype offering is a win-win for those carriers that adopt phones incorporating this implementation of Skype mobile software and architecture, whether Nokia, Android, BlackBerry, Palm Pre or any other smartphone with an inherent multi-tasking capability.

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• Skype Integration On Handsets: Threat Or Opportunity For Mobile VoIP Startups? (techcrunch.com)
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Josh Silverman joined Skype as President early in the spring of 2008; since then he has been reviewing Skype’s opportunities and building a team of experienced executives who can bring to Skype the products, programs and team building expertise required to operate a business with a run rate of $600MM per year, 20% contribution margins to eBay and growing at 380,000 new account registrations per day (with “real user” growth also increasing significantly).

Summarizing the past executive appointment announcements we can clearly start to see the evolution of a business structure, along with each unit’s responsibilities:

• Operations: Product, Marketing, Customer Care, Support
• Technology: Engineering, Platform, Development Community
• Strategy: Partnerships, Strategic Alliances, Acquisitions
• Administration: Global Communications Human Resources. Finance, and Legal round out the top executive team.

During our interview at CES 2009 with Skype COO Scott Durchslag, he outlined details of his restructuring of Skype’s Operations team along two axes: product and geography under the mantra of providing “Skype Everywhere”.

Global product offerings will encompass three divisions: consumer, business and mobile, each responsible for developing products. Each of these groups will be interacting with members of CTO Daniel Berg’s technology teams to convert their technology developments into marketable global product offerings and to adapt the technology to meet product marketing needs.

• Consumer will involve the current Skype client desktop offerings along with hardware, such as Skype phones.
• Business starts with the current Skype Business Control Panel but intends to expand well beyond this starting point into a range of offerings, such as Skype for Asterisk and the recently announced IBM LotusLive developments, addressing the small-to-medium business market.
• Mobile involves current products such as Skype for Windows Mobile, Skypephone (in conjunction with iSkoot), the recently launched Skype Lite (including Skype for Android) as well as any upcoming offerings for the iPhone and BlackBerry

In addition each of these divisions will be responsible for developing appropriate customer care and support programs appropriate to market demands. For instance, the business unit will come up with ongoing support programs relevant to supporting sustainable business operations of its products’ users. Ideally these programs would follow the model of Red Hat for Linux or Digium for Asterisk and build up a network of resellers and VARS who would provide relevant and timely end user support. While Dan Berg’s technology team will be responsible for third party developer partner support, an additional challenge for the Business products group will be to assist with marketing of business applications offered by these developer partners.

While Skype veteran Stefan Oberg is heading up the Business unit, announcements re appointments to head up Consumer and Mobile are pending.

Along the geography axis is a recognition that, while the Products divisions have a global mandate, there are different market needs within different regions of the world. For instance, in many Asian market wireless carriers do not subsidize mobile phones as is the North American practice. This requires a differentiated approach to these markets with respect to how easily innovations, especially around reduced calling costs, can be introduced to these markets.

The geographical market responsibilities are:

• Americas: Don Albert becomes General Manager, Americas. Don has had North America responsibility for a couple of years and will now be responsible for both North and South America. With respect to the latter he is looking forward to building on all the Skype activity in Brazil, for instance. (And, yes, once again at CES Don was made aware we are awaiting SkypeIn and a Skype Store for Canada)
• Europe, Middle East, Africa (EMEA): appointment pending
• Asia/Pacific: Yesterday we saw an announcement of the appointment of Dan Neary as General Manager, Skype Asia Pacific. One of Dan’s initial responsibilities will be to build and monitor closer relationships with partners such as TOMSkype to avoid embarrassments such as that created by the TOM Skype privacy breach we have reported on last fall.

Outstanding executive appointments are expected shortly; at this point it’s becoming all about execution. The next six months will tell the story.

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This is the fourth post in a series summarizing the current state of Skype’s ecosystem and providing a perspective on the assets in place for a new CEO to run with.

Getting to the Present

Alec Saunders’ Voice 2.0 Manifesto talks about Applications as the value creators in a Voice 2.0 world. Once again Skype differentiates itself through a two-year-old Skype Developer Partner program as evidenced by Skype’s Extras Gallery. But getting to this point was not easy; in fact:

• Developer Partners had to be true entrepreneurs who kept their vision of a value-generating application above all the obstacles encountered in not only developing their offering but also in initially marketing it. Close communication with many players at Skype was a key to resolving many issues.
• Skype needed to develop experience with all the subtleties of a developer program from building a roadmap and a viable API set to communicating where Skype would play and where they would let their Partners play in the overall market space.
• Skype’s API set has evolved over time to the point where only over the past summer, as evidenced through the Skype Mashup competition, it provides a more complete set of developer tools, including many, such as Call Transfer, that have been clamored for by developers. (But Skype is by no means finished yet with delivering API’s.)
• Skype has also developed a publishing platform, Publishing Studio, that lets developers focus on their application while providing the infrastructure to bring the application to market and generate transactions associated with the application
• To provide standards for quality assurance, Skype is in the process of certifying its partners’ software applications.

The Voice 2.0 Challenge

The Voice 2.0 Manifesto talks about three flavors of applications:

• Voice applications such as conferencing, enhanced voice mail, audio hosting.
• Voice enabled IT applications: collaboration tools, Salesforce.com, Outlook integration, call centers — all designed to assist the knowledge worker
• The voice web: mashup of voice and the Internet. Here the combination of voice and web services offers the greatest opportunities. From the Voice 2.0 Manifesto: “Examples include: spoken word real estate descriptions from the MLS coupled with mapping, voice enabled matchmaker services, customer service coupled with inventory / ordering / availability. The mix of text, web, voice, and programmatic access to data is a heady brew.”

To date we have seen several offerings in the first two categories with initial steps taken, such as with PamFax, into the last category. However, this category’s true potential will only be realized when web services API’s are incorporated into the Skype API set. (The first one is on their recently released roadmap.) One other challenge for the SDP is to extend this program from Windows to the Mac platform.

Skype Publisher Studio

In the course of judging for the Skype Mashup Competition and checking out some newer Skype Extras, it became apparent why the Skype Publishing Studio is a valuable asset and differentiator, not only for Skype but also for, especially, the Skype Developer Partners:

• provides complete install/uninstall infrastructure
• includes Digital Rights Management that allows the publisher to determine the licensing terms for the software including free trials and offerings; tolled, monthly or annual subscriptions, etc.
• connects to a transaction processor that provides mechanisms for payments via Skype Credtis, which, in turn, can be purchased via PayPal or a credit card.

Basically the Publisher Studio relieves Extras publishers of the need to worry about overhead that would be common to them all and allowing them to focus all their resources on the actual value-creating application. Along with the Publishing Stuido, the Skype Developer program is requiring adherence to standards for usability, robustness and overall quality assurance through the Skype Software Certification program.

PamFax, worldwide winner of the recent Skype Mashup competition, demonstrates the full power of the Publishing Studio through its use of all features, including transaction handling. My quote to the Share Skype blog post about PamFax’s award:

“As I judge I found many excellent entries that demonstrate the value of various aspects of the Skype ecosystem. However, the winners have gone beyond the normal “just add Skype” and taken a broader advantage of the entire Skype ecosystem to turn their Skype Extra into a full business opportunity. For instance, PamFax demonstrates that the Skype Extra program not only provides API’s into Skype but also provides a flexible set of licensing terms and a unique means to quickly collect revenues via the Skype Extras transaction engine.”

Essential Reading: Phil’s post yesterday (Russell Shaw also thought so): Why Skype and Vonage Must Live:

Skype is still evolving how to work in the hundreds of network and compute environments in hundreds of millions of situations. Those situations are challenging and evolving on their own. How you cross firewalls, scale p2p, and adapt streams for mobile conditions aren’t ready to be locked down.

Bottom line: Along with Skype’s provision of a complete suite of real time conversation tools, the Skype Developer Partner program is the other big differentiator from other “VoIP” services. This program:

• positions Skype outside the traditional “legacy telephony replacement” space
• opens up significant sustainable revenue generation opportunities for both Skype and its Developer Partners
• brings reduced communications costs and increased productivity to its business users

And somebody must like these Extras: over 21 million downloads. Another success story: WebDialogs (publisher of Unyte) recently became a division of IBM’s Lotus SameTime Group.

Reference posts:

• Unyte’s Tale: Pioneering and Persevering as a Skype SDP
• On Being a Skype Software Business Solution Partner
• A Banner Day for Skype Development Program
• Desktop Collaboration: The Skype Ecosystem Expands
• Skype Partners Answer Jeff’s Challenge for Innovation in Voice Services
• The Dawn of the Mashup World: – Part I: Challenges, Why and Expectations

Business Solutions Extras:

• Voice Recording and Archiving Applications: Pamela, Skylook
• Voice Services: Evoca, HighSpeed Conferencing.com.
• Call Center: OnState ACD for Skype
• Collaboration: Convenos, Unyte Yugma Skype
• Animation: Crazy Talk
• Miscellaneous Utilities: MyToGo, PamFax

For Skype Journal posts on these Partners, enter the Partner’s name into Skype Journal’s Search box and you will get a list of all posts related to that Partner. The complete set of Skype Extras, including games, entertainment and personalization Extras, can be found here or by going to Tools | Do More | Get Extras on the Skype for Windows client.

Other posts in this Skype Primer Series

• A Backgrounder
• Enabling Real Time Communications
• Skype Hardware – If and When Available

Tags: Skype, Voice 2.0 Manifesto, Skype API, Skype Extras, Skype Developer Partner Program, Skype Publishing Studio, Pamela, Skylook, Evoca, HighSpeedConferencing.com, OnState ACD for Skype, Convenos, Unyte, Yugma, Crazy Talk, MyToGo, PamFax, Phil Wolff, Russell Shaw

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