Skype Looks More and More Like a Baby Microsoft

by Ted Wallingford

Related link: http://news.com.com/Motorola+to+use+Wi-Fi%2C+VoIP+to+move+cell+calls+to+Net/2100…




A lot of geek types are going Ga-ga over Skype because of what a great desktop application it is. But these ordinarily-skeptical GNU-loving beatnicks (myself included) aren't asking themselves the question that's been on my mind lately--would I still love Skype so much if it was a Microsoft product?

Somehow, I don't think Skype would have the same support from the free software community.

If you visit Microsoft's 'online museum', you'll see that their webmaster has conveniently left out all of their early business deals in order to make us think that Microsoft's product history starts and ends with Windows. As if Bill and Paul really made their first million selling Altair BASIC.

Before I get too far into a Microsoft rant, let me re-focus. After all, this article is also about Skype, not just Microsoft. Just stay with me, if you don't mind.

In 1982, the Commodore 64 came with Microsoft BASIC. So did the TRS-80, the Commodore 128, and the Apple II. Even that decade-too-soon Amiga computer ran a Microsoft BASIC. In the years that followed, Microsoft bought CP/M, turned it into MS-DOS, and inked a deal with IBM to develop a next-generation operating that eventually, a lawsuit or two later, became Windows. In the early 1990s, Microsoft deftly overtook Apple as the desktop operating system vendor of choice, sealing a 2-decade legacy of arguably competition-free market dominance that not even Ralph Nader and Bill Clinton's justice department could dampen.

Now, fast-forward to 2003. A small European software company called Skype has been optimizing their simple, peer-to-peer VoIP tool, an instant messaging application that looks and feels rather like Yahoo Messenger or AOL Instant Messenger. Offering better sound quality and bandwidth economy than competing VoIP products, Skype quickly becomes the instant messaging client of choice for folks who need to make voice calls on the cheap.

In 2004, Linux and Macintosh are added to the roster of Skype's supported desktop operating systems, and the Skype network grows exponentially. Skype releases their API for Windows, and handy add-on applications begin showing up. Now, Skype can answer your calls while you're away, and even be bridged with other sound-generating or sound-recording apps. Using Skype's public telephone gateway service, called SkypeOUT, you can even call your mom on her landline phone. A few months later, SkypeIN is added, and people can call your Skype client using a regular phone number.

Some observers dismissed Skype as a software fad, overlooking the network that underlies the Skype system--a network which rides on the Internet and permits secure, encrypted, essentially free, voice calls and conference calls between users of all stripes. A network derived from the killer peer-to-peer topology employed by the uber-successful file-sharing program Kazaa. This network could conceivably replace the public telephone network in large part, just as Microsoft's domination of desktop computing devastated an entire vibrantly-competing market of 8-bit and 16-bit also-rans in the 80s and early 90s. It seems odd to most people that a peer-to-peer freeware system could replace Ma Bell, but there it is. Most people couldn't conceive of a Microsoft-dominated computer industry back in the days of Amstrad and Sinclair.

Consider the similiarities between Microsoft and Skype. Both had to create and license less-than-ambitious specialty products in order to finance their long-term goals. In the case of Microsoft, it was BASIC and the like. In Skype's case, it was the Skype IM client. That's just where the similarities begin.

Both Microsoft and Skype had (or have) a smart bunch of people looking for ground-floor entrances into a burgeoning new market that most people don't yet realize is out there. In Microsoft's case, it was desktop computing. In Skype's case, it's global packet telephony.

Both built proprietary technologies to solve problems that had already been dealt with by standards. In Microsoft's case, they avoided Unix in favor of MS DOS. They avoided internetworking in favor of simpler (and more limited) NetBEUI broadcast networking. Skype on the other hand created a peer-to-peer VoIP call-routing and signaling system when other, arguably superior, methods exist: most notably Session Intiation Protocol and Real-time Protocol. But, like Billy Boy, Skype has found the standards less than acceptable for what they're attempting to do. This, to me, is a clear indicator of what their long-term ambitions are. But the resemblance doesn't end there.

Just as Microsoft started to build its own developer tools to allow creative thinkers to subscribe to the Windows platform vision (and buy in to a proprietary development style), Skype has released its Skype API to encourage developers to jump onto their platform. This means that VoIP-interested developers may be less likely to learn SIP and more likely to learn the Skype API. Echos of Borland C resound: Visual C programs only ran on Windows, just as Skype API programs only run on the Skype network. Standards be damned.

Like Microsoft, Skype is using partners' devices to extend their distribution channels. So far these devices include the i-Mate and Motorola cell phones. Just as Microsoft fanned out its distribution base for Windows by inking "no-win" deals with PC makers, Skype has undoubtedly marked a bit of firmware memory on every cell phone in the first world as fair target territory. Instead of Bill Gates' old addage "Microsoft software running on every computer", Skype may be thinking, "Skype firmware running on every phone and broadband router".

Right now, Skype's technology appeals to cell-phone makers like Motorola because it has the potential to free them from the contractual bondage of Cingular and Nextel. Cell-phone makers want a value-added feature that lessens their dependence on proprietary, closed-access cell networks. The Internet--and Skype--enable that feature. But, as time goes own, the debt of servitude will shift to Skype instead, just as PC makers looking for a low-cost OS to help sell their iron eventually became shackled by Windows. This is the "devil in the details".

With a high-layer Skype peer-to-peer mesh between 3G wireless networks, the Internet, WiFi and WiMax links, and home phones, a single, cohesive call-signaling technology will exist--and flourish--for the first time ever. But there's one catch--and it's a mighty big one: Skype will control the whole thing, from the signaling technology all the way up to the content.

To illustrate this idea, imagine Skype and Microsoft traded names:

Your cell-phone boots up and logs in to a Microsoft super node using the local WiFi connection. At this point Microsoft knows your IP address, your phone number, your user name, your password, and your rough geographic location. And that's all without you even calling anybody on your cell-phone yet. Now, let's say you call dear old Grandma. Using Microsoft's 256-bit encryption, nobody can listen in on your call--which is great... except when you consider that Microsoft controls the network and the encryption algorithm. Once the FCC gets wind that the FBI can't tape Skype calls, Microsoft will be legislated into permitting your calls to be monitored. Not feeling quite as secure now, are you? Let's hope Grandma doesn't tell you any trade secrets during that call. Oh, and by the way--you called Grandma using the MicrosoftOUT gateway--so that'll cost you three bucks. Payable to, you guessed it, Microsoft.

Now, for the knock-out punch in this near-conspiracy theory. Bill Gates has often outlined a vision of Microsoft becoming an "information utility", the nerve center of a Microsoftian infrastructure network where people subscribe to computing power (think "grid") the way they subscriibe to electric power, cable television, or--you guessed it--telephone service. Skype's startling vision of a future telephone-over-Internet network is probably closer to creating the infrastructure of utility computing than even Bill Gates himself is prepared to admit.

Remember the days when Bill Gates refused to acknowledge the importance of the Internet? And that was an uncoordinated, almost random sudden adoption of vendor-neutral networking technology. Skype is an orchestrated attempt to utterly replace a the global telephone network, driven by a small army of cash-armed tech warriors who are as success-driven and shrewd as Gates himself was as an ugly, gawky teenager in the 1970s. If I were Microsoft, or SBC, or Nextel, I'd be watching Skype very closely right now, as I'm sure they are.

Would you use Skype if Microsoft ran the Skype network?


22 Comments

HarveyPengwyn
2005-02-16 08:54:33
CP/M
I know that this is a 'view from 50000 ft', but Microsoft didn't buy CP/M, they bought a CP/M clone.
sams
2005-02-16 12:33:34
What?
I find this article to be completely out of touch with reality; O'Reilly, what are you thinking?!?! Maybe I missed the point....but I just don't think Skype is that big of a deal...a great app yes, but not a killer app.
bobthedatabaseboy
2005-02-16 12:47:03
CP/M
well, not that either. they bought QDOS (for Quick and Dirty...), from Seattle Computer Systems, in the form of Tim Paterson. who eventually sued (and won) on the basis of material misrepresentation. QDOS did build on CP/M, but IIRC there was never any allegation of code snarfing.


and yes, i agree that there is a parallel with M$ and IBM.

TedWallingford
2005-02-16 13:50:00
What?
Unfortunately, the reality is that most web surfers don't read the full article before they post an uppity response. If you'd scroll up and re-read, you'll see that I specifically and plainly state that the Skype app itself is a rather unremarkable IM client like Yahoo chat. It's Skype's NETWORK so many are missing the point about--and apparently, you've missed the point, too.
bertiebear
2005-02-17 03:46:30
Yes, but...
there is an important difference: Skype is for free, and neither MS-DOS, nor Windows were.
hejazzman
2005-02-17 03:57:20
WTF?!!!
This article is tin-foil hat material.


Maybe Skype will be the new Microsoft, maybe not. However, NOTHING in this articles presents an argument for or against this case. What it actually incudes as "arguments" is pure comedy material.


Like, the "similarities" between the two companies:


Consider the similiarities between Microsoft and Skype. Both had to create and license less-than-ambitious specialty products in order to finance their long-term goals.


This begs the question. Who told you that those companies didn't thought MS Basic and Skype IM as their ambitious goals at the time? What argument do you provide that they were just "less-than-ambitious' with those? Just the fact that both companies moved along as time passed? Maybe they found something better ALONG THE WAY. We know, for one, that the MS-DOS desktop deal happened by chance (the classic anecdote of the IBM meeting).


Both Microsoft and Skype had (or have) a smart bunch of people looking for ground-floor entrances into a burgeoning new market that most people don't yet realize is out there.


As do MOST (if not ALL) high tech companies. Duh!


Both built proprietary technologies to solve problems that had already been dealt with by standards.


As do MOST (if not ALL) commercial companies. Duh!


In Microsoft's case, they avoided Unix in favor of MS DOS.


Using UNIX of less capable personal computers was not a question at the time. ALL personal computer makers (Atari, Commodore, Apple, Sinclair, Amstrad, etc) AVOIDED unix at the time.


(Actually MS had a unix clone called Xenix! So there).


They avoided internetworking in favor of simpler (and more limited) NetBEUI broadcast networking. Skype on the other hand created a peer-to-peer VoIP call-routing and signaling system when other, arguably superior, methods exist: most notably Session Intiation Protocol and Real-time Protocol. But, like Billy Boy, Skype has found the standards less than acceptable for what they're attempting to do.


As do many people. A "standard" is an agreement (de jure standards) and a common practice (de facto standards). If it doesn't meets one needs it can be cast aside. Even more so when said standard is just a piece of specifications that nobody (or all three people) uses. Linus Torwalds, for one, warns against meaningless 'de jure' standards.


This, to me, is a clear indicator of what their long-term ambitions are. But the resemblance doesn't end there.


How can it end, since it have ever started?


Just as Microsoft started to build its own developer tools to allow creative thinkers to subscribe to the Windows platform vision (and buy in to a proprietary development style), Skype has released its Skype API to encourage developers to jump onto their platform.


UNBELIEVABLE coincedence! So both companies released an ...API?!


Well MOST (if not ALL) companies that put out a technology publish an API. What were you thinking?


Adobe does, Apple does, Google does, even KDE and GNOME do!!! This is supposed to be another "similarity"? Here are a few more:


@ Both companies operate on earth.
@ Both companies employ people.
@ Both companies put out products.
@ Both companies don't release source code.
@ Both companies have, (gasp!), offices!!!


Surely there must be something fishy going on.


This means that VoIP-interested developers may be less likely to learn SIP and more likely to learn the Skype API. Echos of Borland C resound: Visual C programs only ran on Windows, just as Skype API programs only run on the Skype network. Standards be damned.


Wow!


Like Microsoft, Skype is using partners' devices to extend their distribution channels. So far these devices include the i-Mate and Motorola cell phones.


So, both companies have ...PARTNERS?!!! And they use their partners products to channel their products?


UNBELIEVABLE! Another simularity!


Just as Microsoft fanned out its distribution base for Windows by inking "no-win" deals with PC makers, Skype has undoubtedly marked a bit of firmware memory on every cell phone in the first world as fair target territory. Instead of Bill Gates' old addage "Microsoft software running on every computer", Skype may be thinking, "Skype firmware running on every phone and broadband router".


So both companies want to expand to cover their whole field?
Another similarity!


HarveyPengwyn
2005-02-17 06:30:20
CP/M
And in what way is this not a clone?
TedWallingford
2005-02-17 06:44:03
Tin Foil
Tin foil, maybe. Which means not to be taken seriously. So why put so much somberness into your response, Hejazzman? I'm glad my blog got your gears a'turnin at least!
TedWallingford
2005-02-17 06:46:42
There are SOME costs to Skype
The Skype software is free, but using the PSTN gateway to make phone calls isn't.


Besides, I wouldn't suggest that MS and Skype have similar business models--just a similar endgame.

vivolve
2005-02-17 19:23:33
more competition now though
There may be similarities in MS and Skype's endgame but the difference is that it's nearly 20 years since MS were in the embryonic stage like Skype is now.


Skype will have many competitors who also spread P2P networks cheaply on-line, whereas MS distributed through expensive retail chains before anyone could catch them.


aristotle
2005-02-17 20:32:58
A far-fetched comparison with irrelevant facts
You make a couple of good points about the possible future trajectory of Skype, but the comparison with Microsoft is completely unnecessary and just serves to sensationalize the article with a touch of conspiracy theory. You'd have done better to leave out that cry for attention.


Further, I don't believe Skype is the pivotal point in this story at all. Widely accepted VoIP and -related protocols exist, and software could be written by anyone against any of those. Skype are the first to draw the logical consequences, but on the software and data packet network end of things, they're a completely replacable stand-in.


What might make them matter is their to-POTS infrastructure; unlike the software, that costs real money to operate (and incidentally is what they're charging for, surprise surprise).


All in all this sounds like one of those shower epiphanies that make little sense in retrospect. If you had left out the irrelevant Microsoft comparison drivel, you could have put it all this in a coherent entry a third as long. But of course you wouldn't have gotten any comments, just a few nods, because none of these thoughts are new.

rickhultz
2005-02-17 22:59:34
What?
Good article Ted. Your main point is well-taken by those who understand the nature of internet networks and P2P. Skype's most valuable asset is their network. The Skype P2P network is worth billions of $$ already. A similar server/client network just doesn't compare. Other P2P networks are way behind by now. Peerio can't even get traction.


And Skype is just beginning to see the fruit of their network and product as you mentioned. New deals are coming out weekly. Internet service providers, MSO's, and equipment makers are finding it much easier to partner with Skype, rather than develop their own phone network and phone product.


All Skype needs to do is improve their SkypeOut service, which is probably a result of their proprietary P2P technology interfacing with the PSTN.


Rick


IDunno
2005-02-18 03:41:09
Skype
Skype.....naaaaaaaa. FireFly.....YES.


Go here:


http://www.freshtel.net/


Skype is too resource heavy for older computers, try this program instead, I think it is better.


Robert.

nonethaticanthinkof
2005-02-20 12:06:38
skype
are they listed on any stock exchange yet?
martha@dobratek.org
2005-02-22 14:01:11
Skype
I agree that Skype is a resource hog. There is another free internet phone which operates solely from within a web browser (no downloads and no installations). http://www.theswitchboard.ca is compatible with Windows, Mac, and Linux
and only requires a browser with the Java 1.4 (or higher) plugin installed. It can go through client firewalls, works over dialup, and
has offline voicemail (which is my favorite feature). And, it is totally free.


Martha

werelnon
2005-02-25 09:00:01
Skype
Here is exactly why Skype is such a bandwidth, and computational hog. Basically Skype is using anyone who has a fast computer and a good connection to route other peoples calls. This slows down the routing computer, and eats up as much of its bandwidth as it can get. Unlike Kazaa in which you had the ability to disable this behaviour, Skype gives you no such choice. I think that a profit making company such as Skype should be providing its own relay servers instead of taking, without a users consent, users computational and bandwidth resources.
mbat
2006-04-26 22:03:53
yes, proprietary systems are hazardous
Ted's right on in pointing out that Skype is luring people in to a proprietary system by offering free and low-cost services, positioning Skype for ownership and control of an important market segment.


Anytime we submit to a proprietary system we limit our options and put ourselves at the mercy of someone else's (usually commercial) interest.


Windows isn't better than the alternatives but it's got the market share so most marketing and development concentrate on it and thus perpetuate its hegemony.


It's harder for open standards to make headway when Microsoft doesn't go along. (How many friggin' websites don't work with standards-compliant browsers?! Do you want HD DVDs that only play on players that come from big corporations?) Many who would not otherwise choose Windows are stuck with it because some business system they're tied into requires it.


A dominant system that is proprietary limits our options.


What good are IP telephony standards in the future if 3/4 of people and the lion's share of hardware are on a proprietary system?


Just because it's (mostly) free (for now) doesn't make it alright.


duhancient
2006-06-05 15:58:11
skype
ticker symbol: ebay.. ;)
unquote Salzburg
2007-01-26 02:27:57
Related link: http://news.com.com/Motorola+to+use+Wi-Fi%2C+VoIP+to+move+cell+calls+to+Net/2100…
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octaroon Madrid
2007-01-26 05:27:50
Related link: http://news.com.com/Motorola+to+use+Wi-Fi%2C+VoIP+to+move+cell+calls+to+Net/2100…
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aerodrome San%20Francisco
2007-03-29 07:08:01
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Wang
2008-01-03 16:39:30
Skype is set to add functions for specific business needs through the help of third-party developers.
The company's most recent 3.0 version of its software allows system administrators to configure and control Skype use across an enterprise and Skype will build on that. Its software provides Internet telephony service as well as messaging, videoconferencing and file transfer
Wang