Solution Providers To Microsoft: Don't Mess With Skype

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When Bob Venero, the CEO of Future Tech, a Holbrook, New York solution provider that recommends Skype to international customers, learned Tuesday that Microsoft was buying the Internet video communications provider in an $8.5 billion blockbuster cash deal, his heart sank.

"I was concerned when I heard about the deal," said Venero. "Generally when Microsoft gets their hands on something it becomes more convoluted. The biggest danger for Microsoft is letting this get caught in the Microsoft bureaucracy.

"The worst thing they could do is mess with Skype," said Venero, who also uses the Skype Internet communications video service for international business. "Microsoft needs to think about growing and expanding Skype -- not constricting it."

That means not fine tuning Skype to work only with Microsoft products, Venero explained. "Skype works on the Apple iPad and iPhone and it has for quite some time," he said "Are they going to continue down that open path or are they going to make it a Microsoft only product?"

Venero is not alone. Solution providers say that whether the $62 billion software behemoth succeeds or fails with Skype rests on whether Microsoft maintains Skype as an open Internet platform as well as how it integrates it into the sprawling Microsoft product set. Also critical, partners said, is exactly how Microsoft leverages its tens of thousands of partners to monetize the popular Skype service.

Microsoft's acquisition of Skype represents the software giant's largest acquisition ever giving it a new foothold in the Internet consumer market, where it has struggled recently.

Skype, one of the world's most popular VoIP services, had 170 million connected users and accounted for more than 207 billion minutes of voice and video conversations in 2010, according to the companies. It will become a new business division within Microsoft, titled Microsoft Skype Division.

"I'm assuming it's going to be available to the channel, otherwise they'll be missing a big opportunity," said David Phillips, president and COO of York Telecom, an Eatontown, N.J.-based solution provider and A/V communications and managed services specialist. "It's a question of how they're going to integrate it. You now have the possibility of scheduling with videoconferencing on the desktop. This could consolidate the desktop. It also brings a B-to-C (business to consumer) component to it as well."

"It can potentially challenge a lot of the traditional areas of videoconferencing in a way they haven't been before," Phillips said. "Given Microsoft's brand, given (Microsoft Office Communications Server) OCS and the linkages and everything else, I think it's going to be very interesting."

Phillips said he's curious to see whether the Skype move changes Microsoft's relationship with Polycom -- which is tightly integrated with Microsoft's Lync unified communications cloud platform.

Gary Berzack, managing director and CTO of eTribeca, LLC, a New York City wireless solution provider, said it is likely Microsoft will integrate Skype with Lync as an international gateway into the cloud driving inbound and outbound call center traffic with both business class and consumer service offerings. "The question is: how do they monetize it both on the consumer side and the business side?" he said.

Microsoft CEO Steve Ballmer Tuesday said driving Skype adoption in business will be a priority for the company especially with the potential synergy between Skype and Lync and other business-focused Microsoft products.

NEXT: Reshaping The Internet Telecommunications Market

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