Tuesday, May 13, 2008

Telcos/Cable Operators -- "Skype Killer", WiMax and the Importance of SIP, Open Standards & Differentiation

Last week, two major stories broke in the communications space -- first, Om Malik's closely followed report that many of the major telcos may be planning to launch a "Skype Killer" in 2009; and second, the formation of a new WiMax consortium led by Sprint, Intel, Google, Time Warner cable and others.

Very interesting stories indeed from our perspective at SightSpeed ...


Because SightSpeed -- which is fully SIP and standards-based and with an already sizable, established and feature-rich SIP network for interoperability, as well as best in class IP communications services -- offers unique potential power to each of these major new initiatives.


SightSpeed could immediately give telcos and cable operators a robust and proven SIP network and standards-based platform, as well as best in class differentiated video services, to beat back Skype (which is a closed "walled garden" system) at its own game. We already are partnered with some of the biggest technology companies in the world, including Intel and Microsoft, and that's how we make it happen -- partnering with the best. Why try to build it themselves when tremendous experience, expertise, resources and critical "time to market" issues come into play? It's all built, proven, and here and now.

SightSpeed's best in class SIP services also would be a natural and differentiated service offered by the WiMax consortium to underscore the power of their nationwide network. And, unlike Skype's problematic "super node"-based P2P architecture, SightSpeed's P2P architecture is safe and requires no routing of calls through unsuspecting third party PCs and servers. Virtually all traffic is direct -- caller to call receiver.

Best of all, SightSpeed could enable interoperability among all SIP-enabled endpoints across all of these services, whether they are on the desktop, in the field on notebooks and UMPCs/MIDs, in the living room and on the TV screen, or on mobile phones. All connected ... all the time ... on all devices.

Uber-blogger Andy Abramson wrote a very compelling story today about both of these recent major developments and the critical importance of SIP/standards-based solutions and differentation among product offerings. I agree with Andy -- it is not about "killing" Skype. That is neither necessary or even possible. And, that certainly is not our goal at SightSpeed.

Rather, the right strategy -- and our strategy at SightSpeed -- is to "beat" Skype and others with open standards, interoperability, and critical mass of players in the space who want to offer the best possible overall communications solution with the broadest number of possible endpoints (all of whom are able to "find" each other via our central directory).

Here is Andy's full post below -- which is definitely worth a read:

May 13, 2008

What's Next In IP Communications? Here's An Idea To Look At

Last week two stories seem to generate a lot of interest all across the blogs and in the news. The first was the rumor of a

Skype Killer” being planned by the leading telcos around the world. The second was the blockbuster move by the new WiMax consortium of players including Intel, ClearWire, Sprint plus the cable companies, along with online leader Google, to take over what Sprint and Clearwire were both not really doing yet, that to create a national WiMax footprint here in the USA which will deliver, in theory, both Mobile and Fixed broadband solutions.

The two events treated separately are interesting to say the least, but what dawned on me is that the idea of killing Skype was rather ballsy and very interesting given the already installed user base Skype has worldwide. I mean short of blocking them completely, the idea of a Skype killer makes for nice speculation, but only has a chance of happening and succeeding if the entire telco world agrees on a uniting behind a standard like SIP for IP communications (voice, video and text) vs. the walled garden approach of Skype that already has all that.

You see, the genie is out of the bottle and there’s no putting the Skype Genie back in, so another more robust and accepted flavor of IP communications that does the same thing and more, but without the already known concerns that Skype raises, could overtake them in time, especially if its primary purpose was to supplant the existing analog base of installed users as the telcos move them to IP on their own or see them migrate to cable or WiMax. So what can the telcos do together?

Given eBay has Skype up for sale, the telcos could also band together to buy Skype from eBay and simply put it to sleep. The cost to shut it down would be less than they are losing per year. But just like Microsoft propped up Apple to point to another operating system being alive and well, we know that won’t happen. So with that I’d say the idea of a SkypeKiller has far more merit as a means to play “keep away”, not “take away” because those users already in love with Skype are hooked and not easily coming back.

But simply going after the Skype type of user crowd is so “me too” and in this era of innovation, there has to be another play, and there is.
WiMax. Last week’s announcement of the mega players all joining hands was a very good deal for
Clearwire and Sprint. Clearwire's investors cashed out. Sprint got someone else to carry the ball in the USA market, plus this now provides another option to offer IP based communications versus the already existing 3G solutions.

As a result I chose to think how the very much-ballyhooed WiMax play could be differentiated versus being looked at as only a substitute for the mobile phone. As I like to say "too much me too, me also, not me different" is nothing really new. I mean, what good is going the 4G route if all it does is give a less expensive experience to make phone calls on the go, and not work everywhere for many years to come. That’s what the cable guys already did with VoIP, where the only difference from what we’ve always had from the phone company is the wire the phone service travels over and the bill.

That’s so “me also” in my book. WiMax needs to be more “me different.”
So here's the way I see it. For the most part, the cable guys in the WiMax venture have the most to win because with the mobile WiMax play it gets them into the mobile game with something new, presuming they open up their minds (and checkbooks) and look beyond the opportunity to only a mobile voice play.
From the get-go they have the opportunity to go out of footprint (i.e. venture into markets not under a franchise agreement with a municipality) and second they get to be in the mobile space. Both are very attractive opportunities, but when it comes to selling wireless, they've pretty much already proven via Pivot that selling mobile phone service isn't in their DNA. And also don’t forget this is their second go with Sprint and neither time has really worked well. Many forget the cable guys were the partners in the launch of the Sprint CDMA network years ago and look where Sprint is today.

Well maybe, three times is really the charm?
Instead of simply being another voice play to battle Skype or the mobile operators, the WiMax companies and the cable operators, and heck, even Ma Telco may all may find that they may be better off looking in another direction.
That direction is real-time video communications bundled up along with other IP related services like voice and text, all in one neat little package.
Why video when selling voice to their already installed user base is already there for the cable guys?

Because it is different.

In essence video is the next level of real-time communications to be nurtured and embraced, not only because its ready now, but because it also gives the WiMax, Telco and cable players a very different value proposition to offer and lead off with.

By offering and delivering video, along with voice and text as the new universally used platform for real time communications voice gets to come along for the ride via a real standard, SIP (session initiation protocol.) On the other hand, Skype with their self-created stigma with P2P remains further anti-telco That goes hand in hand with already being perceived by the cable MSO’s as the enemy too. Both factors makes the opportunity around making a lot to do around SIP standard based video the perfect way for the cable folks and the telcos to unite around a common bond. You see, if they don’t join hands and play together no one really wins at all.

Why standards based video to go along with voice and text?

First off, by offering video the cable guys and Bell heads offer up an instant differentiator to the traditional mobile operators. They need this, and WiMax as the next platform needs something “new and different” to get ahead and gain a foothold. Also we don’t need another GSM vs. CDMA war any more than we needed the VHS VS. BETA format battle years ago. That’s where the concept of standards comes into play big time.

Second there are already accepted video standards (H.263, H.264) already in place that that are SIP based and IMS compliant that makes it easy to then interconnect to just about anyone else who is equally standards based. This means when AT&T really enters the WiMax game and gets beyond their idea of “fooling around” and playing wireless chicken in Pahrump, NV, and they will, they’ll easily be able to join in on the fun while their common enemy keeps themselves out of because of their own walled garden approach.

Third. The cable guys are already embracing both SIP and IMS (why else would Comcast have played such a big role at this year's IETF annual congress.) That’s why SIP based and IMS compliant video is a natural.

Fourth. There is proven expertise in the SIP video space already in the marketplace today, with existing customers and patented intellectual property, so all the cable, Telco and WiMax folks need to do is put the video communications technology “inside” the network. This can happen the day the network is turned on, not in a few years after it starts getting deployed. More instant differentiation and faster user gratification.

So what's the Net-Net? That’s easy to see.
The NEXTGEN 4G cable backed carrier, and yes even the telcos all get something very safe and very open, and something they can’t likely build themselves as a international group. They also get to offer something that is very easy to use, as well as something that is very much different.

The challenge though is while so many of us may see the opportunity, we all know that others may not see what is plain as day, simply because of the ever present "not invented here" myopia to often found inside some of the cable and Telco lands. Oh...that’s right, WiMax wasn't invented by any of those players either and look at all the money they spent...well maybe they will get to see it after all.