Good to see James Enck blogging again at EuroTelcoblog...
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Skype's 5 years of disruption... (Happy Birthday, Skype!)

skype5years.jpgFive years ago today, the first public beta of Skype launched, and in a blog post today new Skype CEO Josh Silverman celebrates with "Five Years of Wow". It's a bit of the "Ra-Ra" celebratory kind of post I would expect from a CEO but ends nicely with this:
So, as we celebrate the first five years of Skype, let's raise a toast to the human desire to connect.


Skype has done a great amount to help people easily connect to each other. It's also caused a heck of a lot of disruption within the telecommunications industry. I use Skype daily (Skype ID: danyork) and it has indeed become a significant part of both my business workflow and personal life.


I had a personal reminder of that the other day when I wound up in a video chat with one of my closest friends who was my best man at my wedding 12 years ago. Although we have spoken in the intervening years, we had not actually seen each other in probably most of 10 years due to living far apart. He and his wife emailed a group of folks that they now had a Skype ID. I added them as a contact, opened an IM chat and wound up calling them... and then moving into video and seeing them both. It was a powerful moment - and a great reminder of the power of Skype to easily connect people.

Like many longtime fans of Skype, I do have concerns about Skype's future direction. It doesn't seem to quite have the "buzz" it once did and I'm still not really sure what the long-term vision is... what does Skype want to be when it grows up?


But future concerns aside, I think we should take a moment to celebrate Skype's five year birthday and I want to reflect a bit on some of the ways in which I think Skype has changed telecommunications (some of which we discussed a bit on yesterday's Squawk Box podcast).

Skype arrived in 2003 at a fascinating intersection of multiple trends. First, we as a society were at the stage where we started to get massive ubiquitous 'always-on' broadband connectivity into people's homes (at least in many parts of the world). Dial-up was fading away... cable Internet and DSL were becoming "normal". Second, home computers were becoming more powerful and more multimedia. Third, peer-to-peer (p2p) file sharing networks had grown to a massive scale and validated that such a networking approach could be used for serious applications. The timing was perfect for something like Skype to come along and ride the waves.

So what did Skype bring that was different?

  • SKYPE "JUST WORKED" - If you look at comments that people make about their experience using Skype, over and over again you see comments along the line of "it just works." More than anything else, I think Skype's simplification of the end-user experience made it the runaway hit that it was. I would suggest that this simple experience is really two parts:

    • SIMPLE USER INTERFACE AND INSTALLATION - Skype provided a drop-dead-simple installation and a user interface (UI) that was incredibly easy to use.

    • FIREWALL TRAVERSAL - Connect your laptop to a network and... ta da... probably 9 times out of 10 (or 10 out of 10) your Skype icon is ready to go. I've often even personally used it as a connectivity check - if the Skype icons show as "online", I knew I had good connectivity. Skype does an amazing job adapting to firewall restrictions and figuring out how to punch holes through whatever firewall it is behind and enabling communication to occur. Yes, it can be blocked, but the simplicity by which it got through made it so incredibly easy to use.

    It should be noted, too, that this occurred cross-platform with versions out for Windows, Mac and Linux (although with not all platforms sharing all features).

  • WIDEBAND AUDIO - Skype was the first VoIP application deployed on a large-scaled that used a "wideband" codec (originally iSAC from GIPS, now their own SVOPC) to give a much richer voice experience than traditional telephony. For the first time, many people realized that VoIP could provide better audio quality than the PSTN. After you have used Skype for a while, you rapidly changed your perspective to where PSTN "toll quality", previously the high bar for voice telecommunications, would be viewed as low quality audio. To me this represented one of the most profound yet less visible shifts brought about by Skype.

    Skype's wideband audio also let many of us use Skype as a method for creating podcasts or other recordings with remote hosts. Jonathan Zar and I have used it for Blue Box for almost 3 years. Shel Holtz and Neville Hobson have used it for For Immediate Release for longer. Creating podcasts with Skype has had its own challenges... there have been connectivity challenges and "Skype moments" when audio artifacts are introduced or audio fades in and out... but those can be edited out. The fact is that when the connection is good, it sounds like you and your co-host are in the same room.

    I'll never forget a comment left by my friend Martyn Davies to another podcast that I had been part of that had used a traditional PSTN conference bridge. He said the call was good, but "he didn't know if could stand listening to such poor quality audio each week." And that was a "toll-quality" PSTN conference bridge! The bar was raised for those who became Skype users... and now we're finally seeing wideband audio come out in various IP-PBXs and in phones from vendors like Polycom and others.

  • SECURE VOIP - As a security guy, you might of course expect me to praise the fact that Skype encrypted all the voice and call control from the start. But more than that, back around the time when Skype first came out, there were a lot of nay-sayers in the VoIP industry who presented the argument that you couldn't encrypt voice or call-control without having performance suffer. That was their argument for why they couldn't roll out encrypted voice. The sound quality would degrade, etc. Skype killed that argument. Skype showed that you could have high-quality voice and have it fully encrypted end-to-end. It was a wonderful way to rebut the audio quality argument (and I used it myself with some vendors).

  • P2P VoIP - Until the emergence of Skype, all mainstream systems that included VoIP had been server-based. You had your VoIP client that registered with a VoIP server and communication was all handled by the servers. Skype showed that you could in fact run VoIP over a P2P network infrastructure. Now Skype is not a pure P2P network - there are "enrollment" servers that deal with usernames, passwords, etc.

  • VOICE FIRST - While Skype appeared to emerge out of the "Voice-over-instant-messaging" space in that it was very similar to MSN Messenger, AIM, Yahoo!Messenger, etc., it had one fundamental difference - voice was the first mode of communication. When you double-clicked a name to initiate a connection, instead of IM, you initiated a phone call. In fact to launch an IM chat, you had to right-click or somehow get to the chat button. Voice was the first mode of communication, and so in most people's minds Skype became thought of as a "voice" communication tool versus an IM tool (even though its IM is quite powerful in and of itself).

  • MULTI-MODAL COMMUNICATION - Recall that at the beginning I mentioned that I started out with an IM to my friend, which then moved into audio... and then into video. For Skype users that seems to be a fairly common path. I've had calls that have started as IM, gone to video with IM being used as a backchannel to exchange URLs, dropped back to IM only, moved into audio, back to IM... and so on. With file transfer happening in there as well. Now Skype users seldom think about that kind of movement between "modes" of communication. Certainly other clients allowed this before Skype, but Skype made it popular on a mass scale.

  • PSTN INTERCONNECTION - Many of the earlier software-based VoIP clients suffered from the basic problem that you could only talk to other people with those clients. Skype rolled out SkypeOut which let you call anywhere for cheap rates. Perhaps in my mind more significantly Skype rolled out it's "SkypeIn" service where you could get a PSTN number associated with your account. In fact, you could get many PSTN numbers in different parts of the world. Suddenly Skype could be how you were contacted by regular callers.

  • CHEAP CALLS - Of course Skype disrupted traditional telephony with its "unlimited" calling plans. I mean... the concept here in the US of paying $30 per year for unlimited calls within North America is a pretty dramatic change from our traditional rates. Skype certainly helped lead the further commoditization of voice minutes.

  • CHALLENGING SIP AND OPEN STANDARDS - As Skype emerged in 2003, the VoIP industry was slowly coalescing around the Session Initiation Protocol (SIP) as "the way forward" for voice signaling. But SIP had (and still has) some fundamental problems in that it didn't work well through firewalls, wasn't terribly interoperable and was therefore complicated at times to get working. Suddenly here was this upstart Skype that... (gasp)... used proprietary signaling! Open standards advocates, myself very definitely included, were appalled and knocked Skype for not using open standards like SIP. The success of Skype, though, did give SIP advocates a good competitor... and I think to a degree that has helped. We've seen stronger firewall traversal mechanisms come out. We've seen improved interoperability. Competitors can be good and in the end help make you stronger.

  • PERSISTENT CHAT - WITH HISTORY - While I've been writing here about voice, I want to mention one other innovation on Skype's end with regard to IM. The beauty of Skype group chats is that they are persistent and have a readily accessible history. With Skype, group chats can become an always-open-and-available place for discussion. The beautiful thing is that when you shutdown or disconnect from the network and then later reconnect, you automatically rejoin all the chats you were in, but more importantly, you automagically receive the history of what happened in the chat while you were away. This latter part is huge. Persistent group chats with history means that you can be planning a project with a group of people and do it all through a group chat. Go offline to travel or at the end of your day... connect back in hours or days later and automatically receive all the messages that occurred when you were gone. What other IM system does that? None of the consumer services... and not Jabber or IRC. Certainly now we are starting to see services that offer it, especially for inside an enterprise, but it remains a strong advantage of Skype IM.

There are no doubt other reasons that people can suggest. (And feel free to leave a comment with your reasons.) Someone on yesterday's Squawk Box said a key factor for them was that Skype was the best in their opinion for cross-platform file transfer. Someone else mentioned that the vast number of users brought out all these "hard" phones and other devices that "work with Skype". And sure, it's not at all been a perfectly tranquil time for Skype. There have been outages... and audio quality problems... and changing billing plans... and... and... and... Yet in the end I think you'd be hard-pressed NOT to say Skype has had an effect in various ways on telephony and telecommunications as we know it.


What next? As I said at the beginning, many of us who have been long-time Skype users wonder where it's really going. It has seemed a bit rudderless since the eBay acquisition and has seemed to drift from vision to vision (or simply not had one). There have been opportunities that have been missed to truly turn Skype into a "platform". As Phil Wolff mentions in his great post today at Skype Journal, Skype isn't even really in the race to "talk-ify" the web. (Although I don't necessarily agree with Phil that Ribbit is the answer - I view them as just one of many players in the space (including my employer) - but I agree with his point that what they and others do is a sign of the future of voice.) There have been various features that were launched in what seemed a half-baked way. (Skype Prime, anyone?) There's been management churn and all the other fun of a company growing up.

But Skype's got a new CEO now, and he's only been there 5 months, so to a degree we have to wait and see where he points Skype. Regardless, the fact remains that Skype has changed the way we think about voice communication over the Internet.

Happy 5th Birthday, Skype! I'm looking forward to seeing where the next 5 years take you!

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