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Interesting post that I came across at AAS on Microsoft, Nokia and Skype. Other related posts by Dave Winner and Kevin Fox.

Dave’s recollection of Bill Gates view from 1981 tends to explain why Microsoft got where it is and why it is where it is now.

Essentially, it is one of the basic rules of any business – a business grows very profitably when it is new. Once the market has been established and there is an attractive profit pool – you will have many more companies wanting to drink from the same.

The carriers have had a couple of advantages – the billing relationship and a regulatory one on having a standardized numbering system. These have resulted in a nice income and profit source that has been attracting the various such as Google, Apple, Skype, etc.

Now, things are changing. For one, the opportunities from these advantages are drying out – there is only so much it can grow. Especially, when these are within National boundaries, which are becoming steadily irrelevant. Next, technology advances and regulatory regimes are constantly chipping away at the barriers these have provided so far.

Which brings the question – Is it time for the carriers to be replaced ?

In my opinion, while this seems to be an attractive option, it is far from easy. The biggest advantage of connectivity – an alternative to the simple means of calling a telephone number is going to take to create.

So, in the meantime, the player that can effective collaborate with the carriers has a much better chance of success than the one that does. And on the reverse, it makes sense for the carriers to collaborate with one of the potential competitors. Will that be Apple, Google or the Microsoft+Nokia+Skype combination – I look forward to seeing the answer.

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