Enterprise IT Watch Blog

May 10 2011   7:03PM GMT

With bated breath: The Microsoft-Skype Deal

Melanie Yarbrough Profile: MelanieYarbrough

There’s plenty of speculation around the web about exactly what Microsoft plans to do with its brand new, $8.5 billion dollar baby. There is a lot of “Microsoft doesn’t know what it’s doing” sentiment floating around, but then there are some more interesting hypotheses that we figured were worth a look.

  • The one where Microsoft is crafty. There is the possibility that Microsoft is simply playing keep-away with Skype. Rather than letting a possibly dangerous weapon – once in the hands of competitors such as Google or Cisco – sit in the wide open, Microsoft has decided to snatch it up and mangle it until nobody can play.
  • The one where Microsoft salvages the parts. You may or may not have heard of Microsoft’s unified communications platform, Lync (formerly known as office Communications Server). You may not have heard about it, not because it doesn’t do what it’s supposed to, but because it just hasn’t quite reached household name status yet. Enter dangerously-close-to-becoming-a-household-verb-a-la-Google: Skype. Is Microsoft one big product placement, what with its visions of incorporating Kinect and now Skype into its VoIP platform?
  • The one where karma is a female dog. All Things Digital’s Kara Swisher points out a common denominator in Microsoft’s Skype deal and some older, less amiable Microsoft dealings. Marc Andreessen whose first company, Netscape Communications, dwindled after Microsoft’s anti-trust suit against it, happened to be one of the key investors in Skype. Andreessen noted that Microsoft’s offer was too good to pass up for Skype’s private equity investor, Silver Lake Partners. Can you blame him?
  • The one where Microsoft is better than the other guy. Despite the general lack of confidence the media appears to have in Microsoft’s ability to use Skype wisely, the sentiment seems to be that Microsoft is a better corporate owner than eBay. How do you think this new acquisition will affect daily usage of the service, if at all?

But what everyone really wants to know is…

What does Microsoft plan to do with Skype? There is speculation that it’ll be incorporated into Windows Phone 7, which brought up some valid concerns over at electronista about how Microsoft’s acquisition will affect phone carriers’ reactions to Skype:

Any deal could be potentially thorny and get resistance from much of the cell phone industry. Skype is a staple app for VoIP on iOS. Verizon was also supposed to be depending heavily on Skype for video chat on its 4G Android phones but could see support pulled if a Microsoft deal goes through. Apart from Verizon, carriers also see Skype as the easy option for an officially sanctioned VoIP calling option.

Tony Bradley hopes that Microsoft’s first plans are to tighten up Skype’s security, what with recent vulnerabilities exposed on Android phones and in Mac OS X.

Though it’s hardly an underdog story, Microsoft is always getting flack for not being quite up-to-par. Perhaps this acquisition is its first, pricey step in the right direction for introducing its unified communications offering to a newer, more active and growing audience. Major price tag aside, Microsoft has other obstacles ahead, including Skype’s half a billion dollars in debt, and the business practices that racked it up.

Would it be nice to see Microsoft pull itself up by its $8.5 billion dollar boot straps and wow its enterprise or consumer customers with Skype-enhanced Lync or a Skype-integrated Windows Phone 7 platform? Sure. But Microsoft isn’t exactly known for its winning achievements in peer-to-peer networking, social networking, or the cloud. As editor Michael Morisy (currently on-location at Interop 2011) put it: “Does combining two companies that have a reputation for crappy quality and uptime make a winner?”

What do think? Let us know what you would like to see come out of this deal in the comments section or send me an email at Melanie@ITKnowledgeExchange.com.

Melanie Yarbrough is the assistant community editor at ITKnowledgeExchange.com. Follow her on Twitter or send her an email at Melanie@ITKnowledgeExchange.com.

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  • slack400
    Very interesting news! I can't wait to see how fast I'm forced to pay for Skype!
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  • MelanieYarbrough
    [...] With bated breath: The Microsoft-Skype Deal .topsy_widget_shortcode,div.topsy-sm {display:inline;} .post {padding-left: 10px;}       Comment     RSS Feed     Email a friend [...]
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