Sunday, April 03, 2005

Is Skype reaching The Tipping Point? 

Skype is currently growing epidemic, so one may step back and look-up again "The Three Rules of Epidemics" given in the bestseller from 2000 "The Tipping Point" from Malcom Gladwell my dear friend Richard Shockey is always citing in his presentations.

The book is analyzing why ideas, trends and products seemingly out of nowhere suddenly cross a threshold, tip and spread like a wildfire.

The Three Rules are quite simple:

1. The Law of the Few: Connectors, Mavens and Salesmen
2. The Stickiness Factor
3. The Power of Context

Skype started off with a small group of freaks using already their PC, laptops and PDAs to communicate in real-time with their friends and colleagues via different Instant Messaging and
Presence Services. Since these people also loved to be connected via broadband, they also moved on to voice communications via H.323 and SIP. For these people this was basically just another gadget they tried, because these people tried everything anyway. But they also where experts, and could compare, so they recognized the excellent voice quality of Skype (knowing also ILBC)

So these where the mavens and since they also where road-warriors, they where connectors and since they where experts, they also where salesmen.

So much about Rule 1.

Skype is very simple to install and to use. Basically one can download and start using it within 3 minutes without reading any manual. Since I am one of the connectors I saw this happening over and over. The user interface is simple, easy to use and basically self-explaining, but one may also configure anything. I personally have tried many different products and still are using some of them, but Skype is always there - it is sticky.

Skype is also steadily improving and expanding their service. From pure peer-to-peer on the Internet, via SkypeOut and now SkypeIn and Voicemail. There are also little things provided like different buttons like SkypeMe using (hi-jacking?) the callto: URI from Micoosoft. So I am also keen to see the new things coming up.

So much for Rule 2.

Skype was basically nothing new, but it was launched exactly at the right time and in the right context. You need PCs, laptops, PDAs with a certain processing power and broadband connections.

This was all available with a certain density exactly at the time Skype was launched. In addition VoIP was discussed (the second time) all over the place, especially by the Few of Rule 1.

Interesting also to read in "The Tipping Point" the section regarding the Power of Context (Part 2) The Magic Number One Hundred and Fifty: humans socialize in groups and the average group size is about 150.

This also appoximatly the number of entries I have in my mobile phone and which is about the maximum size of a buddy list that makes sense in Skype. Ok, I have more contacts in Outlook, but I am basically not interested of the presence of most of these people. And just in case I may now call them anyway from Outlook Contacts using Outlook Skype (another third party gadget).

So much for Rule 3.

Is Skype reaching The Tipping Point now and is it getting the PSTN of of the Future?

I do not know, but the chances are there.

One very important thing is happening with Skype at the moment: up to now Skype was a propriatory application in a walled garden. But Skype seems not to repeat the mistake Apple did to stay in this walled garden. It is slowly opening up. The first step was providing an API allowing third parties to add applications and this is now going an all over the place, both in SW and in HW. One example is the Pulver Communicator allowing you to make both SIP and Skype calls, so I use the Pulver Communicator (but Skype is running underneath - sticky!).

Another example is all the HW gadgets showing up now, starting with DECT phones and especally the talks Skype is doing with all these mobile device manifacturers (e.g. Motorola, i-Mate, Symbian, etc.). So Skype will get sticky on Smartphones and dual-mode PDAs too.

The third important development is the deals Skype is beginning in UK regarding free access to WiFI hotspots.

So imagine you have a mobile phone which is Skype enable if you buy it, you just have to enter your Skype-ID, get your contacts (they are now centralized) and can start immediately calling all your Skype buddies, all E.164 numbers and you can be called by anybody via your SkypeIn number at any WiFi hotspot or whatever your connectivity is, even via GPRS or 3G (but watch out here. they rip you off with data fees, especially if you are roaming).

Another interesting aspects with Skype is the changed and new communication behaviour and usage of voice communication such as permanent Skype connections and SkypeCasting (Podcasting via Skype)

I just wait now for SkypeVideo and SkypeHome for accessing your Pictures, Audios, Videos and TV (like

What are the lessons learnt (especially for Telcos and Regulators)?

Lesson 1: Do not laugh and underestimate up-starts giving away something for free

Lesson 2: Communication and related regulation is horizontally layered

Lesson 3: Real-time communication is an application

Lesson 4: Voice is a real-time communication and therefore an application

Lesson 5: You cannot charge for application usage per minute

Lesson 6: Keep is simple (this is for mobile operators)

Lesson 7: Do not SELL services users do not need

Lesson 8: Stick to knitting (your core business) and sell access

Lesson 9: You may compete with everybody, but not with your customer (see faxmail)

Lesson 10: Be scared

A last remark: This week I was attending the 3GPP/TISPAN/ATIS Workshop on IMS-over-Fixed-Access, basically a meeting of telcos and mobile operators trying to set-up a competition to what I described above. The plans they have are very complicated, mainly because they want to keep up their interconnect regime and termination charges.

Since you cannot sell or explain this to a customer, they think they can sell this to a customer by offering a guarantied QoS, even if they still have no idea how to do this. Nobody is asking if the customer is willing to pay for this (see Lesson 7).


1. Will this ever work?
2. If it works, it will be way too late (and way too expensive)
3. So nobody will use it.

The only asset they really have is the usage of the SIM-card = trusted Identity

So they should forget anything else and set-up immediately an IMS-light based on SIP using SIM-cards for authentication and roaming. Done. This is what IMS separates from Skype, nothing else. The SIM card is the only sticky thing in a mobile phone.

Last remark:
Many of these people do not even know the enemy. They do not know about or even use Skype.


Because they have company managed laptops and cannot install their own SW.

Skype going into a wrong way from its startup. No future for a non-standard protocol.
In my opinion Skype has rapidly expanded to fill its niche in the pc-based communications world. However PC-based communications has obvious shortcomings and I believe Skype can not, and will reach any kind of tipping point, without some changes of scope, including things like standalone Skype hardware and interoperability with standards-based VOIP telephony. Without such changes, I believe Skype will always be a ‘niche’ product useful only to a small subset of the real-time voice world, because its users will consistently bump up against its limitations. Skype stands a better chance of becoming a de-facto standard real-time voice application (possible threatening the phone network) if they would do things like:

To date, all Skype ‘phones’ require an attached PC running a graphic user interface. The PC and the GUI are a HUGE liability, because it means that the Skype product can’t function as an independent device on your desk or in your pocket. You have to have a large, noisy, power-hungry PC attached. Even if I were to ‘give in’ and dedicate an entire PC to Skype, it still can’t function like a “server in the back room” that you can forget about. The PC based software is something you must pay attention to, and occasionally interact with. Phones should be standalone devices. They should work reliably without constant attention. Personally, I won’t install Skype on my workstations for security reasons, and anyone who believes that Skype on your PC is not a security vulnerability does not understand network security! Any software like Skype that ‘listens’ for commands from the internet (such as ‘wake up and ring’), has a chance that a hacker will find a way to make it do things it was not designed to do, allowing them to compromise your computer, your identity, your digital life. It’s not limited to Skype (although Skype is more vulnerable than other kinds of software), but rather it’s just a fact of the internet age. There is an It’s an ongoing “arms race” between jerks, and the rest of the world. Jerks try to find security vulnerabilities before the experts can fix them.

OK, so it’s no big deal if Skype isn’t right for me, but I would still like to be reachable in the Skype universe. In other words I’d like our company (or me personally) to have our name out there in the Skype ‘namespace’ so our customers who DO choose use Skype can reach us conveniently. As it turns out, there’s no easy, reliable way to do this. You can’t simply forward your Skype account to our SIP address (sip:// Instead you need to buy Skype-out minutes, and push a perfectly good VOIP call the call across the “regular” phone network, adding cost, complexity, latency and reducing overall call quality. As it turns out, even by following Skype’s instructions (coughing up the money, buying Skype-out minutes and forwarding the calls to your “regular” phone number) is not a great solution either, because after a short period of non-use, the minutes simply expire and the solution stops working! It’s too fussy to be worth doing, so instead we’ve chosen NOT to have a presence in the Skype namespace. That doesn’t help anyone—not Skype users, not me, not Skype inc.

As I mentioned in, you can’t call the SIP world from the Skype world. You already know I think that’s bad, but I think it’s equally bad that Skype does not allow its members to be reached using the SIP namespace. i.e. sip:// Even if I can’t find a use for Skype on a daily basis, I can still make the Skype network a more valuable place to Skype users contacting them through Skype. Alas, Skype has chosen not to allow it! At some point a BUSINESS decision was made not to allow it (perhaps instead hoping that Skype’s dominance could pressure the world into using Skype). I can completely understand why Skype would make this decision, but ultimately I believe it is foolish and short-sighted.

As I see it, Skype’s priority should be to add value to their NAMESPACE. They should be doing everything they can to make their network as popular (read useful) as they possibly can. I don’t believe Skype can maintain a dominant position by strong-arming the market away from a logical solution. People don’t care about Skype-ness or SIP-ness, or even IAX-ness. They just want to get their work (and play) done. People want to communicate with whom the want, when they want. If Skype doesn’t do that better than other solutions, users will drop it like a bad habit. History is littered with examples of companies overestimating their control over the market. Eventually common sense wins out no matter who you are or how big you are.

You may think I am anti-Skype. Not so. I am simply pro-logical, and pro-utilitarian. I don’t give a darn whether SIP or Skype is the dominant VoIP standard as long as I and others have lots of powerful, reliable, flexible options to allow us all to communicate when, how and with whom we choose. Sip and NAT traversal is still (and likely will remain) too burdensome for the common person. That’s what I like about Skype. It allows the non-techies, parents and grandparents of the world to cut their teeth on VoIP. I believe we would all be better served if all of the technologies were interoperable furthering the benefits from VoIP that accrue to all of us—including Skype Inc. whose product would become more useful, more valuable and important to users and non-users alike.
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