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Summary:

Skype opened up its development platform to all comers Tuesday, but it still has a disconnect between revenue generation and its platform efforts. Like many companies trying to build a dominant position in the technology ecosystem, Skype is navigating the path between dollars and devs.

skype_wallpaper_by_msttmz

Jonathan Christensen, Skype’s VP of Emerging Opportunities

Skype is opening up its development platform to all comers on Tuesday, with the launch of SkypeKit program. Skype wants to be everywhere so it can grow its usage and users. SkypeKit is its means to ubiquity but will it work? Like many companies trying to build an app ecosystem, Skype is trying to navigate making money and making developers and users happy.

Currently about 2,000 developers are part of the SkypeKit program, but now that its open to all, the more than 10,000 that signed up initially can join. The kit is optimized for all platforms and devices, and will allow folks to build Skype connectivity into their gizmos and services. With so many devices getting internet access, folks are now only an app away from getting Skype video conferencing on their connected watch for example.

Jonathan Christensen, Skype’s VP of Emerging Opportunities notes that so far the dominant use case of the SDK has been around set-top boxes and bringing video calls to televisions. However, developers participating in the program will have to do so because their users will value and pay them for the functionality — there is no revenue share from Skype. “We don’t have a program for that right now,” said Christensen. As for encouraging developer efforts on areas of Skype that actually generate money for the company, such as the Skype Out minutes or adding functionality to video conferencing, Christensen says a revenue share to act as an incentive might be a possibility.

Now that Microsoft said it will pony up $8.5 billion for Skype, a focus on revenue may not be as pressing an issue as it was when the company was planning its IPO. But its focus on growing users and getting developers on board to innovate using the core Skype functionality without thinking about how the SDK program will help revenue seems a bit short-sighted.

“We are increasingly diversifying our revenue streams, and the attraction of Skype to our users is beautiful Skype-to-Skype voice calls and video, which are free,” Christensen said. “And to the extent that more users are coming in we have more and more opportunity for revenue.”

And Skype clearly believes that developers (and the awesome new services they build which will require Skype) will be key to bringing in new users. The pressure to grow may also be behind Skype’s decision to add XMPP support to the most recent beta version of its Windows client, letting it interoperate with other IM networks. Skype needs to grow especially as it faces more competition from Facebook, Google, Apple and any number of other companies building out video conferencing and chatting capabilities into their services and devices.

Skype used to have the lock on that market thanks to its base of voice users that upgraded to video, but its users have also signed up with other networks that are now providing similar services, leaving Skype defending its turf. For example, I still use Skype, but I now also use Google Talk, Facetime or startups like Tango to video chat with friends and family (I don’t do this often however).

But in order to diversify those revenue streams Skype needs to keep users coming back. Christensen says, “One of the key pillars of the communications network is that it follows Metcalfe’s Law, and so to date with things like Facetime we’re talking about services with limited support for devices, while our strategy is to be on Android and everyplace else we can.”

Looks like before Skype thinks deeply about making money, it wants to ensure it makes itself ubiquitous.

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  1. There has been some grumbling in Dev-land on restrictions in skypekit.
    Here is a sample : “as i understand it, and i am not a lawyer, license agreement very heavily restricts what can be built using skypekit – eg it probhibits web apps, server apps, tablet apps, phone apps, etc — with the specific intent for it to be used only for consumer electronics products. this seems excessively restrictive for something being released for a developer programme.”

    1. This concerned me so I checked it out. I think what the terms is saying is that anyone who wants to make a web app, etc., can do it, but anyone who wants to integrate it into electronics products must get permission from Skype.

      In here (http://www.skype.com/intl/en/legal/terms/api/), the Permitted Purpose 2.a would cover software and 2.b would cover hardware, as I understand it.

    2. This concerned me so I checked it out. I think what the terms is saying is that anyone who wants to make a web app, etc., can do it, but anyone who wants to integrate it into electronics products must get permission from Skype.

      In here (http://www.skype.com/intl/en/legal/terms/api/), the Permitted Purpose 2.a would cover software and 2.b would cover hardware, as I understand it.

      1. Richard Mortier Joseph Tuesday, June 28, 2011

        as one of the devs that tim mentions, i quote from the skypekit ToS:

        “””
        Please read through the terms & conditions before downloading SkypeKit 3.3 Hotfix 1
        Please note that SkypeKit was created to accelerate Skype use in the consumer electronics space. At this time, the following use cases outside of consumer electronics are prohibited:

        Regulated Telephony Products or Services;
        Web Applications;
        Server Based Products;
        Hardware for Enterprises;
        Mobile Applications;
        Tablet Applications;
        Products that compete with Skype’s Paid Features
        See section 4 in the SkypeKit licence below for the complete details of these and other restrictions.
        “””

      2. That isn’t what I heard here at ecomm where Jonathan Christensen was asked about where Skype permit skypekit use. Basically the target is consumer applications (e.g. games) and consumer devices (e.g. baby monitors). He was explicitly asked if multiple instances running in a server was permitted and he said not, but that ‘everything is negotiable, … but not for a couple of developers in a garage’ – which rules out the next Apple or HP!

  2. Hasn’t Skype hosed developers a few times already? Didn’t they just hose their recent employees? Skype is coasting on declining public goodwill and network effects while VOIP comms are going to be offered as part of the mobile OS, and Microsoft’s mobile OS doesn’t really count.

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