Alec Saunders SquawkBox

Today is my first full day of dog fooding Iotum’s software.  I’m going to crow a little bit!  I’m pretty excited to be writing this, and for all kinds of reasons.

The first is the obvious reason.  Our product is one step closer to being ready for the market.  It’s been a long route to get here, but every day I’m seeing significant progress.  Soon, you’ll be able to try it too!

The second reason for crowing is our team — the guys who are bringing you this software.  I’m going to single out Noam, because he’s the most recent, but by no means the only, example of what I am talking about.  Noam is a newly minted software grad from McGill.  Yesterday he watched over my shoulder while I installed our software for the first time.  There were some problems. Problems that would stop a customer dead in their tracks.  Problems that would result in lengthy tech suport calls if we let the software go out like that. 

Thirty minutes later, Noam was back in my office.  "If we don’t nail setup, nobody is going to use our stuff", he said.  "I talked to the team, and this is what we’re going to do."  And then he proceeded to tell me what the development team had decided to do, proactively, to address the issues I encountered, and to smoke out any new problems. 

The remarkable thing about this is that Noam is the most junior developer on our team.  He saw a problem, and chose to act.  No hierarchies, no asking permission, no waiting to be told.  Just go fix the problem.  Along the way, he enrolled the rest of the team in solving the problem too. 

We actively cultivate an environment where people feel empowered to just do what needs doing.  During our hiring process we reject a lot of candidates, most often because we don’t think they’re action-oriented enough.  Yesterday I saw tangible evidence of the value of creating and fostering that culture.

The Economist uses EBay’s acquisition of Skype as a jumping off point to discuss a number of issues, including the vulnerability of traditional telecoms pricing models to VoIP.  According to the Economist, Niklas Zennstrom’s vision for Skype is "to become the world’s biggest and best platform for all communications—text, voice or video—from any internet-connected device, whether a computer or a mobile phone. So it is the fact that his ambition is not nearly as ridiculous as it sounds that should make incumbent telecoms firms everywhere break out in a cold sweat."

It’s a great article.  They position the Skype phenomenon as a destruction of old pricing models, rather than an old industry, and go on to talk about which of the incumbents are most vulnerable to that shift in pricing model. 

It is thus altogether wrong to call this phenomenon the end, or death, of telephony. “Calling it the death of telephony suggests people aren’t going to make calls, but they are,” says Sam Paltridge, a telecoms guru at the OECD. “It’s just the death of the traditional pricing models.” In short, all this is great news for consumers and awful news for telecoms operators. “VOIP will destroy voice revenues faster than most analysts’ models predict,” says Cyrus Mewawalla, an analyst at Westhall Capital. “Voice will very rapidly cease to become a major revenue generator for all telecoms operators, fixed and mobile.”

Incumbents that are most dependent on voice, are naturally, the ones most vulnerable (see the chart below).  It’s no wonder, for instance, that the Chinese are so eager to block Skype.  From where I sit, in Canada, it’s also clear that our incumbent, Bell Canada, is one of the better managed telco’s, globally, with a clear quad-play strategy already in progress.

Stuart Henshall at Skype Journal has written a must-read piece about Skype futures and lessons learned. It’s a mini VoIP Whitepaper on the state of the industry before and after Skype.  If you are a Skype Competitor,  either an incumbent telco, or one of the other IM companies, Stuart offers these observations:

Lessons for telecom landline and fixed

• Audio quality – as if you were there
• Multi-modal – interruptions, context, topics,
• Free – Always on – intercom – push to talk
• Presence – online status, real-time directories, “in-a-call”
• Voice messaging not Voice mail (failure case – didn’t connect)
• Social networking – share contacts, broker introductions
• It’s not about SkypeOut and SkypeIn, it’s about connecting anywhere, anytime.
• Piggybacks on the network – P2P no infrastructure.

Lessons for IM clients

• Ring centric… Voice centric – stickiness – escalation of intimacy
• UI – particularly round the call… will translate to the phone format more effectively.
• Easy to set up, no firewall issues
• Ad hoc conferencing
• Multi-chats – Topic
• Skype’s distribution strategy (devices is different)
• Skype API - Hardware, software, and web enabled solutions
• New decentralized economics

He observes that most of the IM clients being rushed to market implement some, but not all of the important enablers.  Google, for instance, missed the boat by leaving out conferencing.  At Iotum, we use Skype conferencing a lot.  It’s probably the primary reason for us using Skype rather than another IM client. 

He also observes that the telco competitors have really missed the boat by focusing on call control, rather than on features that allow socialization.

It’s difficult to disagree with any of this.  Good work Stuart.  You’ve convincingly argued that Skype is much more than a softphone.

The folks at VoIP software provider Skype don’t let the grass grow under their feet.  Four hours ago, Bill Campbell of the Skype Journal messaged me to tell me that Skype Groups had been released. SkypeJournal has tested this new portal, and "it works!".  It’s just what the doctor called for for small businesses - a way for multiple people to be billed on one account.