(Articles on Politics and Society: follow this link)
Seventy-Four Million Skypers -- And Counting
When telephony becomes just a software application at the edges of the network, everything changes. And why Skype will ignite a VOIP-boom this year.
by Bruno Giussani
23 February 2005
first published in the Wall Street Journal Europe
Don't you love using Skype? What's that? You don't use it? Well, here is a short story that may inspire you to try it out. My friend Susan (she's the CEO of a company in Zurich) recently sent me a one-line e-mail: "Time to skype on Thursday 8 a.m.? I will be in New York." I did have time, so we skyped. She was in her hotel room in Manhattan and I was having coffee on the porch of a friend's home in Miami, where I was visiting. She was speaking into her laptop, connected free of charge to the hotel's wireless hub. I was talking into mine, linked to my friends' home wireless network. We spoke for almost an hour over a crisp clear line -- free. (Well, Susan did pay for the hotel room and my friends pay for their DSL connection, but the marginal cost of the hour-long long-distance discussion was zero.)
We were using a small piece of free software -- called Skype -- that 74 million people have already downloaded (at skype.com; it works with Windows, Mac and Linux) and that many believe is the code that will bury traditional telephones. Yes, we have heard similar hyperbolic forecasts before. A decade ago, at the inception of the commercial Internet, a few visionary companies such as Israel's Vocaltec launched the idea of making voice calls from one personal computer to the other. But until recently voice over Internet protocol -- VOIP -- didn't really deliver on that vision.
Now it does, mostly because of dramatic advances in voice technology and of the rapid increase in broadband subscribers. (VOIP is a technology that circumvents traditional phone networks by carrying calls over high-speed Internet connections, converting our "analog" voices into digital packets that can travel through the network and, at destination, be reassembled and reconverted back into an analog form that our ears can hear and our brain can comprehend).
As Niklas Zennström, one of the founders of Skype in London, told me during a recent interview (conducted via Skype, of course), "once you have paid for a broadband connection, it doesn't make sense to pay also for a phone subscription." In other words, telephony becomes just a software application at the edges of the network. An Internet client.
Despite all the skepticism that surrounds the notion of giving away (as Skype does) a service that the telecom operators charge for, this is serious stuff. Sure, the "free" price tag alone is for many an unbeatable proposition. (And don't be fooled: There is a lot of money in "free," as many companies have demonstrated in recent years.) It is serious because of what happened during my conversation with Susan. Using Skype's file-transfer feature, we exchanged documents and pictures
related to the project we were discussing in real-time. We Googled information and shared it immediately by sending links to one another through Skype's instant-messaging tool. And at a certain point we needed to ask our colleague Alberto for an update. My Skype "buddy list" showed that he was online, probably in his office in Lugano, Switzerland. We suspended the
discussion for five seconds, the time it took me to set up a Skype conference call with six clicks, and there we were, the three of us, talking freely and for free across the ocean.
That's what really makes VOIP so potentially disruptive (Skype is just its most aggressive incarnation; I expect it to ignite a VOIP-boom this year). When a phone call becomes a mere application on the network, then it can interact and converge with many other applications and with online presence (the information provided by the "buddy list") to create a rich, dynamic and
amazingly flexible communication environment.
Which isn't to say that Skype is perfect. It isn't. It's early stage. Sometimes calls drop, or the voice quality is bad (I wouldn't worry instead about the call's privacy, though, since it is 256-bit-encrypted). But for 120 years there was only one way to make a voice call: the telephone. Now VOIP allows entities that are not telecoms and don't behave like telecoms (call them softcoms) to offer voice services and build a range of other features around them. There is VOIP built in to the Xbox gaming platform (so that players can talk while playing). There is Apple's iChat. There is Skype -- and a myriad of other offerings, aimed both at consumers and corporations. True, businesses are less sensitive to price and to the "cool" factor and more attuned to quality of service and flexibility. That's exactly why they are also looking at VOIP with a lot of interest. As for the telecom operators, while publicly projecting confidence they are all nervously scrambling to carry as much traffic as possible (for the most part, unbeknownst to their customers) over VOIP. It's cheaper and gives them more flexibility, too.
(copyright 2005 Bruno Giussani)
Back to the articles archive
