Microsoft Buys Skype For $8.5bn – What Now For The VOIP Service & Its Users?

Written by Rob Nichols on May 10, 2011 · Filed under Software, Tech 

Almost a decade ago, a small group of relative unknowns from the relatively unknown nation of Estonia developed what would later become known as Skype. From a diminutive background, the Internet Telephony software has endured a turbulent history, a series of name changes and an ‘interesting’ takeover by eBay back in the latter end 2005.

As a result, the growth of Skype has been exponential, and it’s branched onto all manner of platforms, and the end product is a gargantuan buyout by software behemoth Microsoft. A wise move? Certainly from Microsoft’s point of view, but is it in the interest of the consumer? And will it have any knock on effects for the loyal user base? All questions that need answering. Urgently.

So far, the only indications from Microsoft came from Steve Ballmer, who has categorically refuted the concerns over withdrawing the application from other platforms, such as iOS and Android developed by Microsoft’s rivals: Google and Apple. The users of which would most likely make up a grand proportion of Skype’s users, and it would seemingly be idiotic for Microsoft to stop supporting said platforms and devices such as the iPhone.

However, Microsoft is in the throws of breaking into that exact market with its own new OS: Windows Phone 7, and what an attraction that would be for potential buyers to have Skype integration at the OS level, and what would be an unarguably brilliant VOIP application available exclusively on Windows Phones. Going back to what I was saying in a recent article regarding the future of Windows Phone 7, Skype would tie in well with the potential business audience, who would perhaps adopt the platform thanks to the so far mediocre, but potentially hugely influential Office integration. VOIP is something used broadly, and is hugely valuable for a developer, in business circles, and there are few doubting that Skype is one of the, if not the single, best implementation of the protocol going.

So whilst Microsoft’s policies and purpose is yet to be completely cleared up, the Redmond-based company has so far only stated to the contrary of the concerns and will continue developing and supporting for other, rival, platforms. Is this the right move for Microsoft? Time will tell, and it is entirely dependant on how far they are willing to push Skype with Windows Phone 7. Obviously they’ll be at a huge advantage having full control over such a popular service, but they’ll also run the risk of losing a huge chunk of its users to rival services such as Google Talk/Voice, which is native to the Android platform, potentially exclusively, though at this point isn’t.

The developers, owners and investors in Skype will of course be hugely proud of the strides the software has made, and will be delighted to cash-in while the price is apparently right, but what’s most exciting about this deal is the potential it adds to Microsoft in the mobile industry. Whilst it will be operating under a separate department, integration is clearly on the mind of the think-tanks at Microsoft, and with Microsoft Office, Skype, Xbox Live, Bing and of course the Windows brand under its full control, there is an incredible arsenal of powerful software at its disposal, and even the likes of Apple can’t compete with that.

This does, however, also accentuate that Windows Phone 7 is an extremely young platform, and the pieces are still coming together like a giant, multi-billion dollar jigsaw, and in the short term seeing developments like this might make potential buyers take a step back and think: ‘hang on, this is going to take a while’ But all the indications suggest, that this could potentially be a massive step forward for Windows Phone 7, at some point anyway.

There will also be fuel added to the fire regarding Windows 8, and Microsoft’s intentions for the next iteration of its world-leading operating system. With more and more focus being turned to tablets in this ever-changing, technology-driven world in which we reside, there’s no getting away from the fact that Windows 8 will be hugely touch-orientated for tablets, and whilst most of the focus for the moment with regards to this deal is with the development of Windows Phone 7 and its progression in the saturated industry.

Skype is of course already deployed effectively on the desktop (including on Mac OS X) as well, and potentially more widely on tablets. There’s no doubting that we’re in for a spate of tablets arriving packed with Windows over the next few years, and this is simply another addition to Microsoft’s already impressive armoury of software, which interestingly enough already includes Microsoft Lync, the company’s corporate communications solution which has been the subject of huge investment from Microsoft, so is unlikely to be scrapped so nonchalantly.

The big question that you guys will be asking though: is it good for the end user? We can only wait on tenterhooks until something more emerges, but for now let’s hear what you think, you can email me at robnichols@zath.co.uk, or follow me, and Zath, on Twitter @R0bNichols and @ZathUK respectively.