VoIM is already bigger than most realize. Voice over Instant Messenger (VoIM) is a rapidly evolving category, which encompasses Web-based voice services from eBay (News - Alert) (Skype), Microsoft (News - Alert) (Live Messenger), Yahoo! (Y! Messenger), Google (News - Alert) (GoogleTalk), AOL (AIM), and several others.
Skype is signing over two million users per week, and its 100 million plus users today exceeds the combined user base of all other hardware-based VoIP providers including Vonage (News - Alert) and Multiple System Operators (MSOs). It also exceeds the user base of any telco in the world. An increasing number of consumers and businesses are using these networks as their primary fixed phone service and there are clear indications that Skype, in particular, is more than a secondary voice service.
ï¿½Presenceï¿½ is a widespread and observable behavior change brought about by VoIM. For example, many Skype users will wait for a contact to come online before they call or send a text chat requesting a live call. While they may also leave a voice mail, the probability of live conversation increases dramatically.
Many small businesses worldwide are also leveraging Skype for communication. In fact, Skype reports that approximately 30 percent of its users are businesses. A recent report by IDC (News - Alert) states that small and home offices (SOHO) are the next frontier for VoIP, with intentions for adoption being three times higher than in consumer markets. Thereï¿½s a clear attraction for achieving cost savings for small businesses, and VoIM can now extend these savings further by enabling users to cut mobile and long distance bills and by enabling them to communicate in new ways. For example, several small service off-shoring businesses based in India, Morocco, and elsewhere are thriving because Skype enables free and unlimited long distance talk with overseas clients. Skype is also enabling otherwise very cost prohibitive business calls in remote areas or even in airplanes where WiFi (News - Alert) coverage is starting to appear.
This is just a small sampling of the changes that VoIM is starting to bring about. The real disruption will manifest itself to its full potential only when VoIM reaches the mobile phone of the average user. When this happens, VoIM will graduate from being a secondary, optional communication service to a primary personalized service.
Yahoo!, Google, and Microsoft are already powering up a significant portion of your communications. The average broadband user spends around 25 percent of its communication time sending e-mail and IM, while voice through mobile and fixed phones represents 12 to 15 hours per month. For Internet leaders, capturing a share of the voice market, especially as it relates to mobile usage, offers a powerful means to drastically increase ï¿½time spentï¿½ and the opportunity to create touchpoints away from the PC.
Today, the mobile and PC universes offer separate and distinct voice communication user experiences. You have a voice mail for your mobile and one for Skype; you have different addressing system (buddy list versus phone numbers), different interfaces and calling rules, etc. While the large OEMs and carriers are trying to bring basic convergence between fixed and mobile phone services and investing billions of dollars into IMS, independent third-party application providers are focusing on making the PC and mobile voice seamless for a fraction of that cost. This is being achieved by bringing VoIM to the mobile phone ï¿½ and without going through mobile carriers for now. Given the rapidly growing usage of the PC and the mobile for communication purposes and the rapidly declining usage of fixed phones, which pair of devices, do you think users will most want to use seamlessly, the mobile and the fixed phone or the mobile and the PC?
As a user, unifying your mobile and PC-based communications through Skype (or through another VoIM service) offers significant advantages, starting with a reduction in your mobile phone bill. Beyond that obvious benefit, maintaining one contact/buddy list and using one voice mail for your PC and mobile service is easier and more convenient than to deal with two contact lists and voice mails. Also, the basic ability to check the presence status of your colleague or to simply to call him on his PC from your own mobile will become an important usability benefit. The notion of calling people based on their names (as opposed to their phone numbers) is an obvious VoIM advantage that can be carried over to the mobile. The user gets more applications including presence, gets the same service and usability on his PC and mobile, avoids expensive mobile long distance, and can call people on their PCs from his mobile. That, in itself, is arguably enough to cause large segments of the population to make VoIM their
ï¿½communication house,ï¿½ which is accessed from any of the multiple devices they use ï¿½ especially the PC and the mobile.
In a nutshell, VoIM is poised to become (over time) the central, multi-modal, and value-added communication platform for many broadband users and the mobile network simply (and only) brings mobility to that platform.
Skype itself is by now a textbook case study of how to propagate new technology to the masses. Beyond the low usage price point and intrinsic virality of the product, Skypeï¿½s success is attributable to its utter simplicity. The user experience is virtually dummy proof. The same principle will undoubtedly prove essential to mass adoption of VoIM on mobile phones.
Expecting users to pay for a mobile data plan, to install a VoIM software or plug-in on the mobile device, or requiring users to access to a hosted voice application through a browser can make for a cool user experiences. That said, this level of user complexity and cost are way too high to generate mass adoption in the near to medium term. It is interesting to consider that only five percent of U.S.-based mobile subscribers have ever downloaded a ring tone. Downloading a ring tone is a simple task and the value proposition is extremely simple to understand, yet, usage is still constrained to very active, yet small, segments. Moreover, using the data plan of a user to run Skype or another VoIM service can be prohibited and/or blocked by a mobile user. In any case, voice quality on the data layer is generally mediocre at best. A better approach is to use the mobile voice network to connect to the VoIM network. This offers customers a higher voice quality and reliability and takes away the need to have a
data plan and to deal with uncomfortable usability on a mobile screen.
Another limitation of mobile software plug-ins is they only work with a fraction of the handsets in circulation. The mobile handset (and mobile OS) market will continue to be highly fragmented for the foreseeable future with proprietary or OEM-specific mobile Java-based OS still leading the market on market share. The result of this fragmentation is that mobile application or content providers have to customize or ï¿½transcodeï¿½ their applications for almost every handset they want to support which in turn increases unit cost. Finally, there are limitations on what you can do on a mobile screen and the overall mobile handset form factor itself bears obvious basic limitations. While smartphones and handheld devices such as Blackberry reduce this form factor problem, this market segment represents less than 1 in 20 mobile handsets today.
As a result, a mobile VoIM plug-in designed to reach the mass market ought to be completely ï¿½server-side.ï¿½ In other words, it should not require any software on the mobile device and only a simple install on the PC. Imagine users can access and use their Skype service from their existing handset regardless of the model they own or the mobile provider they deal with. Take this one step further and imagine the VoIM application in question does NOT require a mobile data plan and uses the circuit-switched voice channel to carry the call to a VoIM gateway (i.e., a SkypeIn phone number). A few third-party providers now offer such ultra-simple server-sided plug-in applications. These enable users to call their ï¿½Skype inï¿½ number, be greeted vocally by their system, and then command the system to dynamically call contacts, play voice mails, check presence, and initiate conferencing of multiple parties, and more.
Clearly, one of the most strategic battlefields for portals and search engines is to capture usage and ï¿½time spentï¿½ on the mobile phone, which has virtually become a human appendage and is used ï¿½continuallyï¿½ and everywhere by consumers. While the apparent strategy of leading Internet players is to offer search, traffic, other content and productivity services through the usersï¿½ mobile browser or through a downloaded mobile application, the average user will likely start to start to use mobile search and to consume content from the mobile through a very different path.
Imagine a mobile VoIM user calling his SkypeIn number five times a day to initiate phone calls and buddy calls, two times a day to check presence, and three times a day to listen to his voice mail. That user who has developed the habit of calling his Skype 10 times a day is only one step away from using a voice-enabled search service seamlessly integrated with the VoIM experience. That same user may also ask to have access to RSS feeds (automatically read upon request) from his mobile by calling that same phone number. From a business standpoint, that same user may be looking to initiate dynamic conference calls from his mobile involving colleagues on the PSTN and others on their PC. The opportunities to leverage the portal/search engine assets abound. The so far underwhelming success of voice portals is explained by a lack of accuracy of speech recognition technology and by a lack of contextualizing of the user experience. The former barrier is going away rapidly with speech recognition leaders
reaching new levels of accuracy and top VCs funding new speech recognition related start-ups. The latter is about to be addressed by Mobile VoIM.
As a result, VoIM stands to represent a multi-billion market on telephony alone and potentially much more as a stepping stone to mobile search and content. Who knows? Maybe the $4.1B eBay paid for Skype will look like a bargain in a few years? IT
Stï¿½phane Marceau is the president and CEO of VoxLib. For more information, please visit the company online at www.voxlib.com.
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