Friday, April 10, 2009

Skype on the iPhone, fences, and pipes

The only interesting news of CTIA was Skype on the iPhone (and soon on the BlackBerry). The floor was full of people playing around with it and saying "oooohhh, it works!".

It does. It works very well. Over wi-fi, the quality of calls resembles the one of your PC (that is, not perfect but ok, and the price is right).

The limitation? Voice does not work on 3G on AT&T (but chat does, which is nice) and the app cannot be used at all in Germany with Deutsche Telekom (they even said they will cancel your contract if they find you cheating around with Skype, which is doable for the tech savvy).

The debate is on. Can carriers really limit the use of applications by their own users? Does it even make sense? Will it be supportable long-term?

The answer is no (sorry). If you are a carrier, you can limit the usage of your network (e.g. charge for data over a certain threshold, and voice is quite data intensive) but you can't limit single applications. It is not practical. It is not going to work in the long term.

The world is too open now, there is no way back. There are no walled gardens anymore. Maybe you can still put on a fence, but people will go around it. It is just a matter of time.

So, what if you are a carrier? Well, you are still making a ton of money, not a bad situation to be in. If VOIP takes off, your voice revenues are at risk, but they will be compensated by data revenues. Maybe just partially. But it is not like your revenues will disappear.

The world is going towards data. Voice is a data type. Period. Everything will go through the same pipe. You control the pipe, you make money. The risk? Become the pipe and nothing else.

How do you get out of becoming just a pipe? Not with fences. Build a playground, make people happy to stay with you, give them services, make sure they are so happy with you they won't go anywhere else (or, at least, lock their most important data like an evil Google).

Mobile cloud services. There is no other answer. That's the long term game. The rest is just happening, it is a snowball transforming in an avalanche. You can't stop it.