Disruptive Telephony

10 Years Of Skype - Massive Disruption... But Will Skype Remain Relevant?

August 29, 2013

Ten years ago today, on August 29, 2003, a group of entrepreneurs and developers from Denmark, Sweden and Estonia unleashed a small software program that would fundamentally and irrevocably disrupt telecommunications and just communications in general. Everything would change. Skype has a 10th anniversary blog post out today that highlights some of those changes that have been brought about by Skype, although I personally find their 9th anniversary infographic a bit more interesting because it traced back the history of Skype.

Massive Disruption

There is a GREAT amount for Skype to celebrate on it's 10th birthday. The disruption that has occurred within telecom is truly massive:

The cost per-minute of international phone calls has been commoditized to near zero. (Indeed, how many people actually make real "phone calls" internationally anymore?)
Telcos - and governments! - who depended upon those per-minute fees have seen almost that entire revenue stream evaporate, or at least show that it is rapidly fading away. Economic disruption on a massive scale!
Skype came to be a prime example of how "over-the-top (OTT)" apps could exist on top of the existing telecom networks - and take both marketshare and revenue from those networks.
Skype introduced the masses to high quality audio and helped people understand that the "phone quality" they were used to was actually really poor quality and that they could do so much better... that they could have the experience of "being there" with someone else.
Video calls, while they had been around for quite some time in many other apps and devices, were made available to everyone for free using the easy Skype user interface (and were helped by the rise of ubiquitous webcams embedded in laptops and mobile devices). An entire industry around video-conferencing was disrupted through the simple combination of Skype and webcams.
Long-distance audio and video collaboration became extremely routine. Think of the thousands of podcasts that use Skype between contributors? (Such as my own Blue Box or the FIR podcast to which I contribute.) Think of the number of video news reports you have seen coming in over Skype... or the guests coming in to talk shows.
Skype demonstrated that you could have secure, encrypted phone calls and IM chats, at least with the pre-Microsoft peer-to-peer architecture. They enabled those of us advocating for more secure phone connections to be able to go to other vendors and say "Really? You can't do secure calls... but Skype can?
Speaking of that p2p architecture, it, too, was something new and fascinating... perhaps one of the most innovative things to hit telecom in ages... that showed that you could think differently about how to connect endpoints.
Curiously, Skype also demonstrated the incredible power of persistent group chats in creating a system that enabled people to continually participate in conversations, even as they came and went from the network. Skype chats still to this day are better that most every other system out there.
Skype showed the power - at least in their earlier versions - of focusing on creating an extremely simple user interface and focusing on the user experience. The simplicity of using Skype was a large part of why so many people started to use it. That and the fact that Skype "just works" from behind most firewalls and in most network environments.
Along the way, Skype built up a massive directory of users... estimated at 300 million now. Most people I interact with do have a "Skype ID" and those names are exchanged at conferences, printed on business cards, listed on websites and generally made available.
Skype became a verb. It's routine now to say: "Let me skype you.", "Can you skype me?", "Let's skype", etc. We don't "call", we "skype".

At a fundamental level, Skype rocked the world of telecom and enabled so much more communication to happen all over the world. As a frequent global traveler, Skype has been such an incredible means by which I can keep in daily touch with my family back at home.

Skype has indeed MUCH to celebrate on it's 10th birthday.

And Yet...

And yet as Skype turns ten, I find myself wondering what the next 10 years will be like... and whether Skype will remain relevant.

You see, that list of disruptions I wrote above is pretty much the same list I wrote about two years ago on Skype's 8th anniversary, just with updated numbers.

What happened in the last two years?

Last year on the 9th anniversary I was asking the "what comes next?" question and Jim Courtney was similarly saying "whither Skype?" Phil Wolff was asking "is Skype boring?", a theme I picked up on for my own post.

Fast-forward a year and the questions are still relevant. Skype is no longer the "bright shiny object" that so many of us were so incredibly passionate about. Indeed, for so many years Skype was the single biggest topic I wrote about here on Disruptive Telephony. There was a reason that my phone number became associated with Skype and I was getting all sorts of calls for Skype's corporate office.

And yet... how many posts did I write here on this blog about Skype in the last year since the 9th anniversary?

One.

Just one post... and at that a short and simple post about a new Skype version being available for the iPhone/iPad.

That's it.

Now, there's a larger issue that I'm simply not writing as much here on Disruptive Telephony as I used to, given that my energy these days is focused so much more on the worlds of IPv6, DNSSEC and Internet routing. But still... had something struck me as exciting or useful about Skype, I probably would have written about it.

I still use Skype each and every day - or at least every work day - and it is a critical part of my day when I'm traveling. But the reality is now for me:

Skype is just a tool.

That's it. A tool to be used. A tool to be expected to be there.

In one way, that's a massive success for Skype, in that millions of people now just expect Skype to be there and to be able to help them communicate.

But it's no longer anything to get excited about. It's a tool. Nothing more. Nothing less.

In a chat earlier today about this feeling shared by a number of us, Phil Wolff, long-time editor of the Skype Journal, said this (reprinted here with his permission):

Skype is boring, like electricity. The BBC interview that came out today where Skype said they'd done proof-of-concept 3D video chat in the lab says it all.
They are busy working on customer acquisition (the next billion users), usage (more conversation per user per month), and more Microsoft integration (% of MSFT products with Skype inside, a la Outlook.com).
They are busy getting more than 2000 employees to work together, nearly half on the job less than a year.
They are figuring out how to make money when the price of minutes - even international PSTN minutes - are falling faster than Skype can pick up share.
They are learning how to stay relevant in a universe where talk is a feature anyone can add to any app for free/cheap.
Bigger scale usually means innovation on plumbing moves faster than innovation on user experience. Skype hasn't offered up new experiences as shiny as "now with video!" in a long time.

Phil's second-to-last comment is particularly relevant as we think about WebRTC and how much it has opened up the world of voice, video and chat to so many more developers.

What Could Have Been...

Stuart Henshall, an original founder of the Skype Journal and someone promoting Skype for pretty much all of its 10 years, said something similar in a post today, "Skype’s First Decade – A Wasted Opportunity. He sums up rather well how I think some of us who were early adopters of Skype now feel:

Today Skype is a feature, part of Microsoft. While it may generate substantial dollars it isn’t the company it could have been. Skype was one of those once in a lifetime products that today could have been revolutionizing how the world evolves. It was once secure, outside the reach of the NSA. It had the network and the membership so it could have been a Facebook, or a Twitter. It had strong developer support in the early days and it’s own store. Most of us still use Skype some of the time today. It is still the most universal free calling solution. It works across platforms including the PSTN, PC, Mobile. And yet Skype today is a brand without a “soul”. That’s what you get when you sell-out one too many times and lose a passion for changing the world.

Ten years in, Skype went from being the scrappy, interesting, exciting underdog challenging the telecom infrastructure... to in fact becoming that telecom infrastructure to the point where they can't innovate as much as they once did because they do have such an enormous installed base.

Ten years ago, Skype was the disruptor - now the question is if Skype will be disrupted by all the new entrants. Maybe Skype still has some innovation in store and may surprise us... but I'm doubtful at this point.

There is a lot to celebrate in 10 years of Skype, but the question is really whether Skype is today coasting on the innovation of those earlier years and now the increased integration with Microsoft products.

As Stuart wrote:

In Internet years like dog years Skype has had a good run. Still it’s aged some and I know it’s no longer my primary communication method. If I had one wish I’d love to see another Skype P2P like system take root although this time on mobile resetting the rules for the telecom stack. That’s still something I could promote.

I, too, would like to see some system that was truly innovative and brought back many of those innovations of how Skype used to be - and did once again truly disrupt telephony as we know it.

An audio version of this post can be found at: