2005

[jbond]

In your article "One Look Back, Two Steps Forward" under Looking forward, I think you've got 2 exactly backwards and 4 is the reason. Skype is already the market leader in VoIP and continues to grow and add features. It's up to the SIP world to match Skype's ease of use and interoperate, not the other way round. And until SIP implementations work out how to "just work" around NAT and firewalls, they'll never match Skype's market penetration.

In addition all the SIP implementations I've tried on the PC need a lot of work on the UI. Frankly they suck, setup needs a sysadmin, and the SIP world as a whole desperately needs a common identification scheme.

This is not to say that Skype is perfect or anything like finished. Skype Out needs some serious work on voice quality. And Skype In isn't launched yet. Until we see how that works, we don't know if they will be serious competition for Vonage as a complete replacement for POTS.

Interesting that in the whole article you never once mentioned MSN, AIM or Yahoo. They are all responsible for significant VoIP traffic. In reality, they're all poor quality, centralised systems. And you can bet they're all watching Skype closely. My guess for 2005 is that at least one of these makes a bid for Skype and that Microsoft announces a VoIP solution that almost interoperates with SIP but not quite.

[mberlant]

You hit the nail right on the head with your comment about the instant messaging services. Skype is simply an instant messaging service that has managed to market their voice capabilities better than the others. AIM has had a voice component for years, and 3 years ago Yahoo was the first of the instant messengers to solve the NAT problem with regards to voice and video. Unfortunately, Yahoo squandered this lead by not implementing any integration with the PSTN world, else they would be sitting squarely where Skype is now.

Skype is the market leader, but not in VoIP. Skype is the market leader in instant messaging with facilitated voice. Skype won't be able to attempt becoming the leader in VoIP until they offer the complete range of functionality that VoIP demands, namely the addition of inbound services and the ability to use dedicated hardware devices for network access.

Unlike the SIP providers, who are already eroding the POTS market, Skype has big challenges ahead in becoming a serious challenger for POTS. Thousands of SIP service users have cancelled POTS service altogether in favor of their VoIP service, many of them keeping their POTS telephone number by porting it to their VoIP service provider. Skype has yet to steal its first user from POTS. Skype's P2P-based network topology dictates that they will have to build an ATA from the ground up because it will need to have supernode functionality in order to maintain the integrity of the network. Without this ability the ATA will not be a contributing member of the network and as more and more Skype users migrate to ATA access over proprietary client access there will be more "leeches" than "seeders" and the network will destabilize.

[djkeit]

Originally Posted by mberlant

Skype is simply an instant messaging service that has managed to market their voice capabilities better than the others.

I downlaod Skype, but unistalled it after a few days. The reason was everytime I switched on my PC, I went online on Skype, I'd have someone calling/IM me.

That is not a phone service. It's a IM. You can voice chat, but what you do is called chatting.

Moreover, Skype isn't really taking advantage of any network benefit. Most hi-tech services have network economies of scale: their value increase the more people get hooked up (it's pretty useless to own a fax if no one else but you has got one afterr all, right?).

A very powerful way to instantly hook up a lot of people is internetworking. VoIP providers have been marketing DIDs (or DDIs, whatever you want to call 'em), peering agreements, cheap rates to PSTN phones quite aggressively in order to spread the feeling that, if you switch to VoIP, you're not alone!

Skype has done this by spreading itself, not by integrating to other networks and/or letting other networks integrate with it.

On the other hand, Skype doesn't face any switching costs. You download the free sw and you are online.

Although some VoIP providers have preconfigured X-ten for download (still, you have to enter username and password in the right place), most others need you to buy and install an adapter, configure it, configure the router, etc... there are switching costs in terms of time, money and risks (that something goes wrong).

I think that VoIP providers should not consider themself as simple replacement of PSTN lines. I don't expect my VoIP line to be a cheaper alternative, I expect it to be different while keeping the ability to behave like a simple PSTN line if I want to.

Regarding this point, maybe, something could be learnt from instant messaging experience, from other experiences as well as from idea that have not been exploited in the past.

One person asked in some other forum, to a (European) provider, if they could offer a 2-way sms service.

That's not really new since a lot of traditional phone companies do offer that already, but still... VoIP phones are just miniPC running linux and connected to a router using a ethernet cable, right? so why do they just call out and receive call? why aren't they doing anything more than that?

The reason why we don't see the take off of VoIP is similar to the reason train companies went bankroupt after making huge profits and expanding for many years: they kept to consider themselves as 'train companies' but since trains were anymore what ppl wanted, their product stoped selling.

Had they considered themselves as transport companies (or even more) they might not have ended up like that.

Do VoIP providers wants to consider themselves as (cheap) phone companies or integrated communication companies?

[mberlant]

Cheap and portable phone service are precisely the two reasons I have hitched my wagon to the VoIP star. I don't need another instant messenger - I have been using AIM for almost 10 years (since it was introduced as "Buddy list"), and outgrew it a couple of years ago, as VoIP began to mature into a service that could be transported over the internet and was no longer restricted to private IP networks.

There is a huge market for VoIP services within the global community that is driven by the desire to reduce international telecommunications costs and provide overseas presence at the same time. VoIP affords companies the chance to save 80% on their international phone bills when compared to POTS. I'd say that's plenty of incentive to switch at least one POTS line per company to VoIP.

Then, please consider the benefit of having an overseas presence for very little money. You can be anywhere in the world and for little or no money each month have a telephone number in the US, UK, Italy, Germany, Israel, Japan, and many other places. All of a sudden the combination of an internet web site and phone numbers all over the world work together to get your company's message out and sales orders in.

In my dealings with companies of all sizes I find that they do not want a telephone that's also a video phone, game boy, or SMS console. They want a telephone that takes under a minute to learn about and they want to begin saving money after that. In fact, almost none of my clients use IP telephones. Most of them use ATAs that are integrated with their existing telephone systems, thus reducing training time (and cost) to zero. And none of my clients has ever wanted to install a softphone on a desktop PC, because that would mean interrupting the workflow on the PC to handle a phone call.

A good parallel to illustrate your question about why don't IP phones pack more features is right here in the cellular market in Japan. Cellular companies offer phones with all sorts of built-in features and ancillary devices that have nothing to do with making calls - video cameras, TV receivers, game consoles, navigation utilities, etc. But the thing that is striking is that about half of the phones they sell are low end phones that make and receive calls, and little else. In fact, Tuka is starting to do well with a phone that doesn't have a display and comes with no user manual. They are marketing it with a TV commercial where Grandpa says, "Don't give me a cell phone. I won't use it. They're too complicated."

Right now there's a lot of money to be made, even at slim margins, being a cheap phone company. There's too much investment up front for these companies to try to become integrated communications companies with little return. Most of the VoIP companies today mitigate the risk in their service by providing and provisioning their own ATAs for free. All the user needs to do is to plug it into a free port on the router, connect a phone and listen for the Dial Tone.

There are thousands of users who just want technology that works for every one user you encounter here or in Skype's forums. In my little corner of the market not one of my clients is interested in participating in forums like this - they just want the service to work.

[PhoneBoy]

Ironically, I've never used Skype for Instant Messaging. My thought on IM is: if I can't integrate it into a single client (like GAIM), then I don't need it.

[jbond]

I do find the antipathy of the SIP world to Skype fascinating. It's so easy to dismiss it as "just IM with voice" and "not SIP, doesn't interoperate". Meanwhile they're growing stupidly fast, the software just works, and there's a whole new generation of individuals discovering cheap or free, internet based voice calling. When another service is close to carrying more voice minutes than all the other IM and VoIP systems combined (to a factor of ten) you'd better pay attention. So my provocative post still stands. Specifically in the area of soft, PC based VoIP, the SIP competition had better put some work into matching Skype's ease of use or end up being irrelevant.

Having said that, I completely accept that the VoIP market is bigger than this and includes a lot of other situations such as PABX interconnection and complete landline replacement. But even here, Skype represents a huge opportunity for third parties to fill in the gaps. And even though the Skype protocol is proprietary and closed it's conceivable that this year we'll see interconnection with things like Asterix.

A couple of specifics.
- Computer mediated VoIP naturally lends itself to Presence, active contact management and directory services. And it's only a short hop from there to txt chat. So whether Skype is VoIP plus IM or IM plus VoIP doesn't matter. Fact is there's a natural affinity between them and it makes sense to combine them in one client.

- Skype like all other IM systems has Privacy control. If you don't want to receive unsolicited calls, then reject them in the options. This seems to me to be an inevitable byproduct of success. The only reason you don't get unsolicited calls on SIP systems is that their drectory services are inadequate and not enough people use them. :wink:

- With the release of the Skype API, inclusion in generic IM clients is beginning. There's a Miranda plug in and I believe there's a Trillian plug in. I'd expect a Gaim plug in shortly.

[mberlant]

Originally Posted by jbond

Meanwhile they're growing stupidly fast, the software just works, and there's a whole new generation of individuals discovering cheap or free, internet based voice calling. When another service is close to carrying more voice minutes than all the other IM and VoIP systems combined (to a factor of ten) you'd better pay attention. So my provocative post still stands. Specifically in the area of soft, PC based VoIP, the SIP competition had better put some work into matching Skype's ease of use or end up being irrelevant.

I posit that much of Skype's growth is at the expense of other IM services, like AIM, MSN Messenger, Yahoo Messenger, etc., and not at the expense of SIP-based VoIP services. I also suspect that Skype's voice minutes are not so impressive when measured against the entire IM community as a denominator, not just the SIP community.

While you're at it, if you're going to compare apples to apples, market space to market space, you need to be comparing SkypeOut minutes to hop-off outbound minutes of the SIP providers. And, to be accurate in your comparison you need to compare SkypeIn minutes with hop-on inbound DID minutes of the SIP providers. (Oops! There are zero SkypeIn minutes.) Likewise, the only relevant comparison to Skype on-net minutes is to compare Skype with like minutes on the other IM services, who (I believe) don't keep such statistics.

As for ease of use, what is easier than picking up a real telephone and dialing an ordinary telephone number? Isn't that easier than going to your PC, interrupting whatever is going on with that PC, searching the Skype user list, selecting and calling the person you want (assuming that this person is also a Skype user and is on line)?

How about answering an inbound call? The telephone rings and you answer it. Again, that has to be at least as easy as remembering to leave your PC's speaker turned up loud enough to hear the inbound signal, going to that PC, wherever it's located, putting on your headset (or picking up your ChatCord phone, etc.) and clicking to answer the call.

You suggest that downloading and setting up Skype is easier than setting up a SIP ATA. That may be true on the base level. Certainly, many more people have installed their own IM client of any flavor than have configured a SIP ATA. But, this is precisely why just about all SIP service providers offer (or require) to lend their subscribers a preconfigured, just-plug-it-in-and-use-it, ATA for the duration of the relationship. What could be simpler than opening up the shipping carton and plugging the device in? Today's ATAs are both foolproof enough for providers to overcome problems via remote provisioning and robust enough to accommodate people like you and me who are not satisfied with the vanilla configuration that satisfies the masses.

So, I offer that Skype is the service who had better get their act together and decide if they want to implement real world services or remain a next-generation AIM.

[djkeit]

Originally Posted by mberlant

Cheap and portable phone service are precisely the two reasons I have hitched my wagon to the VoIP star.

I understand what you are trying to saying here and in the rest of your post. However, the mass is not attracted by these factors.

I'm the only one among the group of people I know to have switched to VoIP exactly because of this reason. I tried to convince a few people to try VoIP because it was cheap and portable but they replied they already have a cheap PSTN line with unlimited local/national calls and they don't need world portability as they would probably never move not even to a nearby city so.... Also, having an inward number in another city/country is not interesting for most people. I actually use my London number when I need to give my number for some reason but want to be sure I won't be called there. (it works... never received a call there!).

I am sure that would agree with me that, if all local Bells in the US, decide to offer a $29.99/mo. plan inclusive of rental fees and unlimited calls to US/Canada and also inclusive of all their other VAS, they can destroy VoIP appeal for 99% of the population.

That's the very reason why VoIP isn't appealing here: if, for

[mberlant]

Originally Posted by djkeit

As for jbond arguments, I still think Skype behaves like a IM basically. People buzz you only because they see you online... it was quite annoying: it would a perfect thing if I was an bored teenager... but I am not. So I unistalled it.

I didn't go as far as to uninstall AIM, but as much as I adore my teenage nieces in the US I also tired of the bombardment just because I was on line. It is interesting to observe, though, that they almost never call me here despite the fact that I have a US number they have included Long Distance on their cell phones.

[PhoneBoy]

IM is just "a lot easier" than picking up a phone and calling someone sometimes, I will say that.