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Google buys GIPS for $68 million - to take on Skype? Apple? Microsoft?

gipslogo.jpgThe big news out this morning was that Google is acquiring Global IP Solutions (GIPS) for $68 million USD. GIPS may not be a familiar name to many folks, but for us in the communications / telephony space, they are widely known as the supplier of audio codecs (and increasingly video) to companies creating real-time communication products, including Yahoo, AOL, IBM and many others. Many of us, though, knew them best as the initial provider of the wideband iSAC codec to Skype.

To put this in more normal language, if you know how good a Skype conversation can sound... how rich the audio can be... how it can sound like the person on the other end is right there in the room with you? The quality of that audio connection is because Skype uses a "wideband codec" to send the audio from one end to the other. Up until 2007, GIPS provided the primary wideband codec that Skype used.

At some point in there, Skype realized that, particularly giving away a free product, it needed to control more of its technology stack and stop paying licensing fees to GIPS and so it bought a company, Camino Networks, that had its own wideband audio codec. Skype then moved away from using GIPS and used its own codec technology.


This would seem to be the exact same move that Google is making. Through their purchase of Gizmo last year, Google acquired client-side technology and SIP technology for the "control channel" side of communications path. With their 2007 purchase of GrandCentral, Google acquired a SIP-based backend infrastructure (which evolved into Google Voice). They have also had their GoogleTalk product out for some time as well.

What they haven't had until now is control over the "media channel".


SIP-communication.jpgTo understand why this matters, let's back up and review "IP Communications 101". When you have two "endpoints" (softphones, "hard" phones, applications, whatever), they communicate over IP using two different channels.

The first channel is the "control channel" where commands are passed such as "I want to invite you to a call with me". These days that control channel is increasingly using the Session Initiation Protocol (SIP) although many other protocols exist (both proprietary and standards-based). The control channel typically passes through one or more "proxy servers" (in SIP lingo) that may be IP-PBXs, call servers, hosted servers, "clouds", etc.

The second channel is the "media channel" where the actual audio or video is sent between the endpoints. Depending upon the exact configuration, this media channel may go directly between the two endpoints, as pictured. Or it may go through media proxy servers, or through Session Border Controllers (SBCs). It is typically transmitted using the Real-time Transport Protocol (RTP), but inside the RTP stream the actual audio or video is encoded using a "codec".

The point is that it is separate and distinct from the control channel.

The issue is that while the control channel is increasingly around the open standard of SIP, which anyone can implement, the "codecs" used in sending media from one endpoint to another have long been a proprietary battleground, particularly with regard to wideband (or "HD audio" as some call it). Yes, there have been and are standards, but usually there have been intellectual property or licensing issues. Now, there is work within the IETF to create a standard wideband codec (and as I wrote earlier, Skype is involved with this effort) but that may take some time and the outcome is not known right now.

The easiest way to solve all these issues is to own your own codec. This is what Skype did back in 2007... and what Google seems to be doing now.


It's also worth noting that GIPS has conferencing engines for both audio and video... and recent events highlight increasing interest in video conferencing:

Put some of the pieces together like this and we could indeed see renewed interest in video conferencing, particularly from mobile devices. (Or perhaps Google might add audio conference calling into Google Voice.)


The question of course is what will Google do now. Naturally neither the Google news release nor the GIPS "letter to customers" says anything. Typical Google style is for new acquisitions to go silent for some extended period of time and then to pop out in some new offering. In this case, of course, GIPS is providing underlying technology that Google could use in many of its other offerings.

Some of the speculation (and it is only that) I've seen so far is that Google could be taking on:

  • Skype - As mentioned earlier, with Gizmo and other acquisitions, Google does have the tools to try to create a competitor to Skype.

  • Apple - Naturally with the Android/iPhone war going on, Google could use this technology to offer new services on the Android platform.

  • Microsoft - With their now-branded "Communication Server", Microsoft is challenging the incumbents in the enterprise communication space... perhaps Google will put some of the pieces together to start doing something there.

  • Traditional conferencing vendors - Google Voice offers voicemail and call routing now... why not add conferencing?

Or perhaps Google will open source some of the technology to further try to disrupt the industry... for instance, will Google offer one of the GIPS codecs to the IETF CODEC working group as an open standard?

Time will tell.... in the meantime congrats to Google and GIPS on this acquisition.

What do YOU think Google will do with GIPS technology?

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