Microsoft buys Skype - 24 hours later

Early this morning I got a call from a friend, telling me he missed a blog post on the Microsoft - Skype deal. My first reaction was: I'm not yet sure what to think of the deal. We chatted a bit about it and now an hour later I write the post anyway.

When the rumors started my first emotional reaction was: This will be the end of Skype, this based on:
  • Microsoft is an enterprise software vendor and doesn't understand the dynamics of a consumer product.
  • Skype recently delivered a terrible Mac client and I don't see how Microsoft can improve on this. Microsoft probably makes it even worse by putting in the terrible ribbon interface.
  • Microsoft now needs to make some money on the deal, so probably pricing will change and focus will shift to more enterprise features, fitting the Microsoft DNA.
  • Microsoft has competing products and usually the home grown products get more attention and investments than the acquired products.
  • Microsoft will probably rename the service to Microsoft Skype - Voice and Video Starter / Home / Enterprise edition 13.4, or something alike. 
  • Installing Skype will probably be bundled with Microsoft Live Essentials 2011, that are only Essential to Microsoft.
  • Skype from now on will only work with Bing as you default search engine.

Now some time has passed and the emotion makes some place for rational thinking. Yesterday after the deal was confirmed I also spoke to some Microsoft employees and I was happy to learn that (for now) Skype will operation as a completely separate business unit within Microsoft. Independent of the price Microsoft paid for Skype, there are possibilities to get something good out of this.
  • Skype brings a large and loyal consumer base that is valuable but needs to be treated with respect. When treated wrongly it can quickly disappear. Microsoft needs to take time to learn and adapt their DNA to consumers before trying to leverage. Tip: Consumers do not always make rational decisions, for instance: Women need at least 50 pairs of shoes with half of them with 4" heels. The can't possibly wear them all, but they are still essential! Emotion rules rational!
  • A common scenario I see very often is people using Microsoft Messenger to publish their online status, contact their buddy with an IM message and continue the voice and video chat on Skype. This of course doesn't makes sense, but again an irrational decision that Skype is better! Microsoft needs to learn this kind of user behavior and adjust the product portfolio accordingly. This probably means killing Microsoft Messenger even if this sound very silly and stupid.
  • Another common scenario happens in organizations that implemented Office Communication Server or Lync for their communication needs. Since this is a typical enterprise product putting security paranoid IT manages in control resulting in limited communication possibilities outside the organizations. Very often Skype is used to communicate outside the boundaries of the organization of between different organizations. Federating OCS/Lync with Skype would be great, but only if it can be done as easy as it is adding a new Skype contact.
  • Collaboration between people is moving more and more towards collaboration between individuals, independent of their organization, while Microsoft focus is still primarily on collaboration between individuals within an organization. Skype brings a lot of value and knowledge to transform Microsoft to a company that connects people (especially after Microsoft also buys Nokia, connecting people)

My take on the deal: Microsoft paid too much a customer base with a competing product, however when they make the right choices I believe it can possibly pay off. This is what I would do:
  • Skype is Skype and keep the Skype identity!
  • Make Skype the primary IM, voice and video communication platform, run as an independent business.
  • Integrate Skype into all Microsoft products 
  • Depreciate and stop development on Microsoft Messenger, Lync and all other variations.
  • Provide a simple single choice for people to communicate. 

What would you do? Leave a comment below.

2 comments

Its a 1st step of Microsoft in the telco space. They are now a telco provider through Skype out/In. This break-out facility can then be further integrated in the portfolio of Microsoft further growing the revenue streams. Those are my 2 cents for the moment ;-)

Before Microsoft decides what to do, they needs to make 100 percent sure they've actually acquired the
peer-to-peer
technologies underlying Skype from
Joltid's control
http://joltid.com/
. Joltid shafted eBay effectively selling Skype twice. BOHICA?

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