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Summary:

Spring VoN 2004 is almost over, and after walking the conference floor, I am convinced about two things – there is too much hype around the technology. Secondly, the Instant Message clients are becoming incredibly important and will be the eventual winners in the VoIP sweepstakes. […]

Spring VoN 2004 is almost over, and after walking the conference floor, I am convinced about two things – there is too much hype around the technology. Secondly, the Instant Message clients are becoming incredibly important and will be the eventual winners in the VoIP sweepstakes. This epiphany came standing at the Microsoft booth. The Barons of Redmond have finally realized that the MSN Instant Messaging software is the stealth Softphone client on every desktop. Ralph Poole posted this in comments, and he does a good job of explaining the Microsoft strategy.

They have created the backend infrastructure elements, they have nurtured a number of vendors who have created VoIP applications, and Messenger is the required platform for VoIP on the desktop. I think that their strategy has been well executed up to now.

This is where I say, Skype who? As Aswath explained earlier Skype, in order to offer premium services will have to pretty much build a network infrastructure to drop and pick calls from the PSTN network. I think Microsofties will convince a lot of cable companies, phone companies and wireless carriers to play ball. Their argument: hey we will drop calls on your network which means usage of the network. Carriers can use a sales pitch that goes something like this: For $9.95 you can make unlimited phone calls to all your friends on MSN. All incoming calls free. I think you get what I am getting at.

Why would the carriers play ball? Well many of them have taken the Microsoft cash! (Read my take on Microsoft’s telecom strategy.)

I think AOL will finally figure this out – sooner or later. I think between ICQ and AOL IM, Time Warner (my employer) is sitting on a huge goldmine and with some simple upgrades can turn these clients into Skype-killas. Apple’s IChat is another example of a client waiting to become a phone interface.

Armed with just a microphone and a 56K modem Internet connection, you and your buddies can talk to each other with zero long distance charges, no matter how far apart you are. In fact, iChat AV is better than a telephone, since you can quickly see if your buddies are available, away or doing something else. Custom status messages make it a snap for you to effortlessly convey just the right message to your buddies. The result: no more games of phone tag and no need to leave a message.

The greatest advantage of these IM clients is that they are already sitting on our desktops, have been built for an IP-everywhere world, and are one upgrade away from becoming phones. (The real magic needs to happen at the back end!) We should start the clock ticking on Skype!

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  1. Many of the IM clients are already a phone. There have been stories that have claimed (without attribution of course) that Yahoo and the like are not advertising phone capability because it consumes too much bandwidth at the server. So the real magic that is needed is implementing UDP hole punching mechanism.

  2. What would it take for companies like Skype and Virbiage to compete with giants like Microsoft, AOL and Yahoo—on the IM/VoIP subject?

    What would they need to bring to the table?

  3. Symon Blomfield Thursday, April 1, 2004

    Secure, enterprise class encrypted IM, capable of safely crossing firewalls, ability to build personal “presence” network for paying customers (even with scontact who not paying), no software required and integrated with VoIP through single desktop? Be our guests free on the IM. VoIP available in the next 10 days or so. VoIP to PSTN shortly afterwards. Enjoy.

  4. Luca – Pandemia Thursday, April 1, 2004

    Why are You so negative about Skype? They are in pole position till now and they introduced SkypeOut just a week ago with lot of satisfaction.

    I don’t agree with your view :) till now

  5. tech/net jottings Thursday, April 1, 2004

    Telecom developments

    … later this year Vonage is going to offer a portable WiFi phone that can make and receive Voice over IP calls from nearly any wireless access point. The cool thing about the Vonage service is that you can make

  6. Alec Saunders .LOG Thursday, April 1, 2004

    Microsoft and VoIP

    Disappointed I missed VON this past week.

  7. OMG! IM is VoIP!

    All of a sudden Vonage is looking just a wee bit like Kerbango. ;) Om Malik posts from Spring VON that Microsoft has made public the discovery that VoIP is little more than IM on dedicated devices. Every month or…

  8. B. Mann Consulting Thursday, April 1, 2004

    IM will win VoIP

    There is little or no money to be made off soft clients, IM or otherwise. Voice is free today on these platforms (have you used iChat? — it’s crystal clear, and “just works”), why do you think anyone will be able to charge for it in the future?

  9. IM will win VoIP

  10. Unbound Spiral Thursday, April 1, 2004

    Scanning

    After a vacation the newsreader is full of posts. I missed out on VON and WTF last week so along with the normal Skype review I keyed in a few Feedster searches. The fragments below reflect some I noted and…

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