Wednesday, April 17, 2013

The other ball Microsoft is dropping: Skype

What the hell is happening to Skype?

Five years ago Skype had an absolutely dominant position in the field of voice over the internet. I am sure it still has a lot of users today but I suspect a heck of a lot of them are over the age of 40. There are several new kids on the block that seem to have pushed Swype completely off the stage for everyone younger than that. My 12 year old daughter is all excited about Viber at the moment because it allows her to contact her friends without using up any precious credit. True but Swype has been doing that for years. WhatsApp also has a growing following. My very unscientific survey suggests that WhatsApp is capturing the 20+ market while Viber is winning the 20- and nobody but nobody is getting excited about Swype. The bizarre thing is that Swype is still probably a better service than either of these competitors. It has more features and is available on more platforms.

Of course competition is a good thing for us consumers right? Well, yes, but ... in the field of communications competition can lead to competing standards. Viber can't talk to Skype which can't talk to WhatsApp. Instead of a connected planet we end up with a series of walled gardens.

Can Microsoft who bought Skype in 2011 do anything to restore their dominance in this market? I still believe they have a superior product but it clearly isn't being positioned properly for the younger generation. Viber and WhatsApp feel like products made for phones (I don't think they even have PC clients) while Skype feels like a product designed for a PC but surely that could be fixed with an interface tweak.

Do Microsoft actually care about losing the voice over internet market? Well I think they should. It is after all growing market unlike the ailing desktop sector even if it isn't a huge revenue earner.  If they continue to sit back while young competitors mop up all the new entrants though and let the competition continue to rob all new customers then they are going to lose it entirely. Even now their smartest move might be to buy Viber and WhatsApp and consolidate them all into Skype.

3 comments:

Stabs said...

"Even now their smartest move might be to buy Viber and WhatsApp and consolidate them all into Skype. "

I don't think that's how marketing works.

If the kids are using Vyper because old people use Skype then consolidating them just makes Vyper an old person's app too and the kids will be forced elsewhere.

Stabs said...

Viber, Vyper, whatever. Get off my lawn!

mbp said...

Good point. Kids can spot grown ups trying to act cool a mile away. MS wouldn't have to consolidate the front ends though. They could keep their individual audiences. it is just the back end needs to be consolidated so everyone can talk to everyone else.