What Microsoft's Skype deal means

Microsoft nets a powerful consumer brand, another cloud service to sell, and an opportunity to provide managed B2B video, blogs Ted Schadler.
Written by Ted Schadler, Contributor

I'm not going to comment on the $8.5B purchase price, though I'm sure Marc Andreesen's investment company is happy with their return. And I'm not going to comment on the impact on Xbox, Hotmail, and Live.com. And I don't think this has anything to do with Windows Mobile.

But I am going to comment on the impact of the deal on the enterprise, and specifically on content and collaboration professionals responsible for workforce productivity and collaboration. When you strip it down to its essence -- Skype operating as a separate business unit reporting to Steve Ballmer -- here's what you need to know about the Skype deal:

First, Microsoft gets an important consumerization brand. Skype is a powerful consumer brand with a reported 600+ million subscribers. But it's also a "consumerization brand," meaning that it's a valuable brand for people who use Skype to get their jobs done. Consumerization of IT is just people using familiar consumer tools to get work done. It's a force of technology-based innovation as we wrote about in our book, Empowered: Unleash Your Employees, Energize Your Customers, Transform Your Business. Google and Apple and Skype have dominant consumerization brands. Microsoft does not. Until now. And as a bonus, Google doesn't get to buy Skype. And more importantly, neither does Cisco.

Second, Microsoft gets another cloud service to sell. Microsoft's software revenues are under attack. That's one reason has built Office 365 and Windows Azure. While it's true that Skype has been slow to make money off its service, the potential is there. Local phone numbers, three-way video conferencing, business administration, and making calls to real phone numbers are all things that people will pay for. Skype has never had the money to market these services. Microsoft does.

Third, Microsoft gets the opportunity to provide managed B2B video conferencing. Microsoft's Lync product delivers audio and video and chat and Web meetings, but only to other other employees or close partners. But with a managed gateway between Skype and Lync, people could use Lync-to-Lync to connect to colleagues and Lync-to-Skype to connect to customers and partners with video, audio, and chat. "Can't I already do this today with Skype" I hear you ask. Yes, you can. But only if IT looks the other way. With a Microsoft-sanctioned solution, IT could sign off on the practice.

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