RSSAre you on Skype – 2
Tom Evslin from Fractals of Change , Has an excellent series of posts on Skype, more specifically on the business/economic model of Skype, Part 4 & Part 5.
Excerpts:
Skype's success in the eighteen months or so since it launched is so great that the company is being compared to Microsoft and there is worry about Skype "dominance" and serious concern about the implications of Skype protocols being proprietary rather than standards-based. This is an Internet story somewhat reminiscent of Bubble v1.0. Skype's success is not measured by profitability (it is not public so its P&L is not known); its success is not measured by revenue because, until very recently, it had no revenue producing services. Rather Skype's success is inferred from the 100,000,000 copies which have been downloaded, from the billion and a half minutes of voice traffic it carries each month, and from the typically more than two million users online at any given time. These are big numbers even if they're not in dollars or euros.
Metcalfe's Law (which not everybody believes in) states that the value of a network is proportional to the square of the number of endpoints. People are the endpoints of a phone network.
Skype's strategy is simplicity itself; the brilliance has been in the execution. Calls from one Skype user to another are "free" assuming that both users already have broadband connections which do not charge by the amount of traffic transmitted, computers with microphone and speakers, and Skype software. The Skype software is downloaded at no charge. The first Skype users were typically college students who had all the prerequisite equipment and connections. Groups as small as a pair of separated lovers decided together to download Skype software so that they could coo or fight or dream together without having to pay for a phone call. The initial success was in Europe where a greater percentage of calls are international and expensive than in the US.
Skype built its impressive (some would say "frightening") network of users by providing free software for free Internet calls between users. So how do they ever make money? They've begun to answer that question.
Skype introduced its first paid service, Skypeout , in the summer of 2004 and claims over 1.2 million users as of April, 2005. It allows outbound calls from a Skype-equipped computer to ordinary phones at very reasonable rates.
The quality has always been good enough so that, even on a conference call, other participants are surprised to hear what technology we are using. The only flaw, and it's a big one, is that DTMF (touchtones) are not handled well so that is often difficult to check voice mail or do other automated functions with SkypeOut.
Skype now has two new paid services in Beta: SkypeIn and Skype Voice Mail .
Is SKYPE already inside the enterprise or Will it in the near future — Comments Please.Prashanth Rai
I’ve recently discover Skype, everybody was talking to me about it, but I was not convinced to leave Msn messenger. Now that the new Skype 2.0 offers video it has made me decide to give it a try. I found is easy to install and use and the sound quality is clearly better than with msn… Since that day: bye bye Microsoft!