The Doppler Effect: Skype Connect vs Google with free calls.

Yesterday, Skype Connect launched.  Skype Connect is the formal release of the program started last fall called Skype for SIP.  Ostensibly designed to connect the enterprise PBX to Skype via SIP, Skype touts the fact that vendors like Cisco and Avaya are certified to work with their networks.

There is, however, another story here.  Skype Connect is simply a SIP gateway to the Skype network.  For years, Skype detractors have bemoaned the fact that Skype’s proprietary protocol prevents anyone but a Skype client from connecting to the network.  Not any more.  At Calliflower, we use Skype Connect to enable Skype users to participate in Calliflower conference calls, for example.  Moreover, our earliest tests of the Skype Connect service were made by connecting a Bria softphone to the Skype network via Skype Connect. Skype Connect can connect literally any kind of SIP device to the Skype network.

For $6.95 per month, you can connect a SIP phone, or an ATA, to the Skype network.  Calls to Skype users are free, and to most other people they’re a couple of pennies per minute.  $6.95 is a small tax for what you get. Keep that thought in mind.

Last week, Google announced the integration of voice with GMail.  It’s not the much ballyhooed Google Voice that’s being integrated.  Rather, it’s a pretty simple outbound calling capability from within GMail.  In fact, the lack of integration is not a pretty experience, as some have noted already.  Nevertheless, within the first 24 hours 1 million calls were made.

A lot of people scratched their heads over Google’s manoeuvre last week, myself included.    Goldman Sachs analyst James Mitchell even speculated that Google’s target is actually Facebook, writing:

We assume Google’s ulterior motive is less about disrupting the telecommunications industry (it will still pay termination fees to telcos) and more about driving engagement within Gmail and its social networking activities, to better compete with social networks such as Facebook.

With all due respect to Mitchell, his theory is somewhat tenuous.  Voice services deployed on Facebook, including a much lauded Skype Me application, have been unsuccessful.  Social networks built around voice have also been unsuccessful, and rapidly devolved back to the core of what makes social networks successful – sharing, as opposed to conversation.

The Google team has got to be tired of staring through the dust at Skype’s taillights. Google’s voice business has had two false starts to date – Google Voice, and GTalk.  My read on this latest effort is that it simply bundles voice with one of Google’s most successful services as a means to jumpstart the business.  It’s a tactic straight out of Microsoft’s playbook from the 1990’s.

Time will tell if it will work.  However, it’s worth noting that:

• Using distribution to solve a market share problem is a brute force approach.  It works well when the products being bundled are complimentary, and usually doesn’t work at all if the products are unrelated. Are voice and email related?  The answer is an unequivocal “it depends”.  With a unified inbox, absolutely.  But Google hasn’t done that yet.
• Hundreds of millions of downloads later, Skype has clearly solved the distribution problem.  Not only that, Skype connectivity is being embedded into everything from handsets to PBX’s to televisions.

As it exists today, GMail with voice isn’t a Skype killer.  It seems clear that Google’s voice strategy is still incompletely revealed, and that to be successful, Google needs to find a way to leapfrog Skype. It wouldn’t be that hard, however. For example, they could:

• Turn the GMail inbox into a unified communications client.
• Take a cue from services like Ringio, and incorporate small business features into Google Voice  – queues, automated attendants, and the like.
• Open up their network to third parties, the way that Skype has with Skype Connect.
• Offer value added services, including conferencing and collaboration suites.
• Bite the bullet, and bundle Google Voice directly into Android.

And what of Skype?  While they must be thinking about Google, Skype Connect at $6.95/mo clearly targets Vonage Small Business ($39.99), Comcast Small Business VoIP ($49.95), AT&T Business in Box with Voice DNA, and the like.  Skype Connect is the beginnings of an assault on enterprise telephony.

In other words, while Google is chasing Skype, Skype is moving up the food chain to a new kind of customer.  At this stage of the game, the Doppler effect looks as if it’s in Skype’s favour, as Skype appears to be rapidly moving beyond Google’s latest offering.

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