Developing the Skype ecosystem: Q&A with CEO Niklas Zennstro

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Developing the Skype ecosystem: Q&A with CEO Niklas Zennstrom
Taiwan companies, which boast a strong capability in the manufacture of IT hardware products, are likely to become important partners for Skype Technologies as the company looks to broaden its application software to IT products other than PCs, company CEO Niklas Zennstrom said in a recent interview with DigiTimes. Zennstrom also asserted that, due to the proliferation of Skype-enabled devices, an ecosystem based on Skype technology is developing. The following includes more excerpts from the interview.

Q: You have mentioned that Skype will exert efforts to develop application software without the need to hook up with PCs. What kinds of hardware peripherals does Skype plans to launch in the future?

A: As P2P VoIP services are our main business; the development of WiFi phones with built-in Skype capabilities will be the focus of our efforts. We will develop embedded Skype-enabled software for WiFi phones. We also plan to introduce wired Skype-enabled phones and set-top boxes (STBs).

Q: Would the advantage the Taiwanese makers enjoy in hardware manufacturing help Skype develop its products?

A: Taiwan boasts strong expertise in volume production of hardware products and has strong ODM capabilities. This is crucial for us to develop Skype-enabled peripherals such as WiFi phones and other handsets. Skype has cooperated with Taiwan makers in production of handsets, and will extend the cooperation to include STBs, TVs and peripherals other than PCs. I believe that the pace of cooperation between Skype and Taiwan makers will accelerate in the future.

Q: Many companies around the globe have begun producing Skype-compatible devices. What is your opinion about the situation? Does Skype plans to launch any authentication programs?

A: IT makers are looking to introduce Skype-compatible devices because of the increasing number of subscribers using our software. With the hardware products becoming more sophisticated, we sense there is a need for us to introduce an authentication process that will enable customers to choose the right products.

Skype is an application software developer and we are willing to cooperate with hardware makers to develop the market. Details of the authentication process have yet to be finalized but with hardware makers always minding their costs, fees for the service will be token.

Q: In addition to cooperating with hardware makers, Skype also plans to open its API (application program interface) to software developers. How will the Skype API be used with other applications?

A: Our process will allow software developers to bundle external applications with Skype software. For example, bundling with our vSKYPE software will enable subscribers to share video conferencing across a Skype network. Another method for developers is to include Skype software into their applications, such as including Skype voice functionality into a CRM (customer relationship management) application.

Q: You have stated that Skype has never received complains from telecom carriers since it launched its operations. Your statement seems to run counter to what we have heard in the market. Can you explain that? In addition, as telecom carriers move to carry integrated services through fixed lines, mobile phones and WLAN devices, will this provide Skype more room to develop?

A: For the telecom firms, I think it is the flow of network traffic that matters to them. People said the introduction of mobile phone services would affect revenues that the carriers derived from fixed-line services. But for a telecom firm that offers both fixed-line and mobile phone services, the losses of traffic from fixed lines can be recovered from increased traffic on mobile services.

A similar situation also exists in the relationship between telecom operators and Skype. As our services are based on broadband, telecom operators are worried that Skype’s VoIP services will affect the traffic for fixed line and mobile phones. In fact, the traffic lost in fixed line and mobile phone segments will be channeled into their broadband networks.

The move by telecom operators to integrate fixed line and mobile traffic onto a WLAN AP (access point) will help enhance the development of Internet telephony under a WiFi environment. This development is similar to our cooperation with a number of wireless ISPs (Internet service providers) such as Boingo Wireless (a leading WiFi aggregator and software company).

Q: So Skype will cooperate with telecom companies as well as with wireless ISPs such as Boingo and Livedoor?

A: Yes. But our cooperation with wireless ISPs will be more important than that with traditional telecom companies, because the cooperation with wireless ISPs will provide our clients with mobility and accessibility for global communications. This will continue to be one of our key strategies for future development.

Q: What measures will Skype adopt in order to cope with the requirements of E-911 and legal intercept rules?

A: As it is difficult to report the precise location of a wireless 911 caller at present, we plan to develop a new Internet positioning solution to comply with the E-911 requirement. Skype has no problems following the legal intercept rules as our SkypeIn and SkypeOut services are currently carried out through the conventional PSTN (public switched telephone network).

Q: Would it be proper to use the term of “Skype industry” to describe the likely proliferation of Skype-related products? What is your opinion?

A: Yes. You can say that, and, in fact, a comprehensive ecosystem based on Skype has been building up. Skype has its own core technology, a solid subscriber base and integrated software and hardware products. These products and services are then delivered to customers through our channel, so an ecosystem based on Skype basically has already been established.


http://www.digitimes.com/telecom/a20050824A4013.html