The Skype Blockade

Skype is one of the least appreciated weapons in Microsoft's arsenal

In terms of ecosystem strengths, Skype is one of the least appreciated weapons in Microsoft's arsenal. While it's obvious that products such as Office, Xbox, and of course Windows represent larger hegemonies than Skype, it still represents a beachhead on other platforms. Available on Mac, Linux, Android, iOS, various televisions and set-top boxes, and even legacy systems like Symbian and webOS, Skype has the potential to be a central part not just of Microsoft's ecosystem, but for the internet at large.

Should Microsoft decide that it would be best served by making Skype available exclusively on its own products, it would represent a significant shift in strategy and could send shockwaves throughout the rest of the industry. Although such a move may drive some movement towards Microsoft products in the short term, it's more likely that consumers would still make their purchasing decisions based on other factors and then contend with the lack of Skype afterwards. Microsoft's weak position in the smartphone space would compound the shift away from Skype as a primary communication tool if it were Microsoft-exclusive.

We believe that a Skype blockade would be a counterproductive move that would limit Skype's large and growing popularity as a communication service. In fact, Skype's greatest strength right now as compared to other VOIP services lies not so much in its technical superiority as in its ubiquity. The net result of a Skype blockade would be a lessening of Skype's unique advantage of ubiquity and a mad scramble for a cross-platform replacement. In the event of such a scenario, expect the VOIP and message space to look much more like the fragmented and fractured battle to replace SMS.

It would take some time — perhaps years — for a dominant, cross-platform replacement to emerge and the battle would be incredibly fierce. The number of interested players who would want to try to take up Skype’s banner is shocking: large software players like Google and Apple, small startups, and even wireless carriers would all likely rush in, guns blazing.

Luckily, since completing its purchase of Skype in October of 2011, Microsoft has not given any indication that it intends to remove or reduce access to the service for other platforms. However, it is possible that Microsoft could engage in softer tactics. By offering a premium experience on Windows products and not working to keep other platforms up to date, Microsoft could potentially lead core users to consider switching to Windows products. Skype is tightly integrated into Windows 8 and Windows Phone 8 and will soon replace Windows Live Messenger, already offering a vastly superior experience than what’s available on iOS and Mac.