Free Essay

Skype vs at&T

In: Business and Management

Submitted By dboehm
Words 8090
Pages 33
1. INTRODUCTION

Skype is an eBay company founded in 2003 that created voice communications software that allows users to communicate with people around the world via the internet. (Skype Limited, 2007) “Their particular spin has been to create a business model in which the basic service is free.” (Gosling, 2006)
1.1 Problem
The problem is that this is not new software or service as other phone service providers offer the same or similar service. They must show how their service will outdo the rest.
1.2 Purpose
The purpose of this case study is to explore what makes Skype different from its competition by analyzing the strengths and weaknesses of the company and by determining the opportunities and threats they may face.
2. SWOT ANALYSIS
2.1 Strengths
Skype has several advantages that place it above its competition. First is the cost advantage to users. It’s free. That is if the person you’re calling is a Skype user as well. But if they are not, then calls placed to normal phones or mobile phones are charged a very low price. Typically this cost is about $0.02 per minute for calls made in the USA. (HL7 Systems & Services, 2007) Second, Skype has no expenses associated with marketing and advertising. With more than 25 million registered users, Skype’s reputation was built mainly by word of mouth. (Gaskin, 2005) Therefore, unlike their competitors, they don’t have to spend money trying to find customers. Third would be the “user-friendly” set up and configuration. Ease of use always plays a significant role in convincing users to sign up. Last, the call quality is rated as exceptional. Skype controls transmission efficiencies in digital voice and broadband networks, thereby transmitting the full frequency range of human hearing. (Gaskin, 2005)
2.2 Weaknesses
The main limitation that exists with this service is that in order to use it, your computer must be turned on and anyone you call must have the service running on their computer to receive the call. (Gaskin, 2005)
2.3 Opportunities
Skype has several opportunities that will help it to advance to the next level. The ever increasing reliance of the internet for various transactions enhances Skype’s opportunity for growth. As more users become computer savvy, they may easily embrace the idea of communicating via the internet. Skype already has a large customer base, thereby making it easier to introduce new products or services. Additionally, they have the opportunity to gain the customers who don’t like to be tied down to a PC since there is a cordless phone available to use with Skype software. The RTX DUALphone 3088, along with other types of accessories, is available to Skype users and does not require the use of a PC. (Product Reviews Net , 2007) Having this type of phone provides the best opportunity for Skype to advance ahead of the competition because it offers the same capabilities as a landline phone.
2.4 Threats
Though Skype has great presence among internet users, there are those select few who are set to tradition and are unwilling to give up a “normal” phone. (Gaskin, 2005) Even with the Skype compatible phones available, the cost of these phones may deter consumers from turning away completely from having a traditional phone line.

3. DISCUSSION Skype may not conquer the world completely, but they have made great strides towards taking over certain parts of it. They should continue to strive to overcome the resistance users have to change within the telecommunications industry. With its huge customer base and constant evolution of new technology, they are sure to be industry leaders in the near future.

Google: Porter’s 5 Forces Analysis
Porter’s 5 Forces analysis is a framework for industry analysis and business strategy development relative to the competitors of the firm.

Threat of New Entrants (Potential New Entrants)

The barriers to entry in the internet search market are high. Today, each competitor has its own thousands of servers set out in every location all over the world and continues to accumulate data for years about the internet users. In this industry, a new entrant must need to provide better search results at faster speeds to compete in a highly competitive market. It must have been realized by Google as it competes with the other search engine provider such as the Yahoo, AOL, Netscape and Microsoft’s MSN.

One aspect of this is the capital requirements. It is not easy for every company to enter this industry because of the substantial amount of capital and resources to put up to. Google have tried to differentiate its product of search engine of not only providing internet services but advertisement as well. There is no strict government policy that regulates internet services so this barrier is low.

Bargaining Power of Suppliers

Google is a popular and trusted search engine but is not globally dominant. However, Google’s advertising system is a unique feature of a search engine and has been a reliable source of income because of the makers of the advertisements and the receivers of these ads are both customers of Google. This capability of Google search product made its market dominance thus the supplier bargaining power is low. But, there is a threat of forward integration is possible because of the increasing capacity of its competitors such as Yahoo and MSN.

Rivalry among Existing Firms (Current Competitors)

Google’s stated goal has stated its goal as to “organize the world’s information” and they have created products to complement their main internet search service. In this industry, only few companies have the ability to compete and these are Yahoo, AOL, Netscape and MSN. Even there is small number of competitors, the rivalry between these companies and Google have been a tight race because of the product or service characteristics of the search tools are of similar nature and features thus switching costs from one search engine of one customer seemed nothing.

Each rival of Google continues to improve its search engine capability and features in order to compete to the leading web provider. Because of the fast rate of industry growth, it is not acceptable to become stagnant in the industry where technology is the main factor. When it comes to the diversity of product and services, Yahoo has become the major rival of Google.

Bargaining Power of Buyers (Customers)

Internet is accessible and widely used by every consumer all over the world. Google was not at the top at the very place of its existent, it tried to differentiate its products and services with its rivals and become the major player in the industry. Bargaining power of buyers is powerful because Google mainly depends on the users of its search engine tool. There are still alternative suppliers of this service for the users to choose from and changing these suppliers would not cost much or very little. Most of its users would not consider the quality of the service because most of this search engine tools are the same. However, the buyer has no potential to integrate backward.

Potential Substitutes

Internet has become the major source of information of many people all over the world because of its accessibility, availability and it is almost free. There is no really substitute for the search engine tool in such that information can be organized in different ways such as categories and date and Google was able to embed this features to its search engine. Thus, there is no existing substitute or alternative product.

Google has positioned itself well to each of Porter’s Five Forces of Competition as well as to stay competitive in a turbulent external environment.

Skype, one of the world’s most famous VOIP service companies, has lead the field since it came out in early 2000s. It is famous with those characteristics: easy, cheap and clear-voice. However, with numerous rival companies surging into the market, Skype is facing huge threats. In the meanwhile, although it has a huge number of users, its profitability needs to be improved. (Gomes 2010) This essay will analyze the market position of Skype and will give suggestions on enhancing market and profitability through targeting on Chinese market.

The reasons why choosing China as a targeting market lie in following points: Firstly, competitors are relatively weak and therefore there is a higher chance to take over the market. The most recent and major rival is Google, who has recently announced a service called Google voice, which has been integrated into Gmail. What is more, the service has quite competitive price and loyal Google/Gmail customers world-wide. (Weintraub 2010) However things are slightly different in China. Google had bad cooperation history with Chinese government and it will make their entering into Chinese VOIP market a long way to go. (Dean et al. 2010) This is just a good chance for Skype to attain early mover advantages. Secondly, price of Skype is relatively competitive. Comparing to most developed countries, China has a higher rates in telecommunication. Even quite profitable prices could be a big attraction for customers and therefore can generate more profit. Lastly, taking over Chinese market equals to having the biggest part of cake since its huge population and potential purchasing power. Skype can attain early mover advantages easily, especially when internet is quickly spreading all over China and 3G network has just applied widely.

Specific method might be divided into two steps: At first, cooperation with those two big telecommunication companies is necessary. Skype could negotiate with telecommunication companies and make them provide a 3G data promotion set for Skype usage. This may seems impossible since Skype is a rival to them, however, if we look the big picture, two big oligopoly telecommunication companies China Mobile and China Unicom can be seen as both rivals and suppliers to Skype. (Joel 2008) At beginning, they are more like suppliers since they focus on different service market and they are trying their best to broaden 3G market. So under certain agreement, the method can be achievable. In that case, it will be a win-win deal: not only this cooperation can has huge advertisement effect among cell phone users for Skype but also can promote 3G usage figure for telecommunication companies. This method is just a typical approach of enhancing “strength” parts of Skype which are huge number of users and good reputation and brand-name. It is also an improvement regarding to the “weakness” of Skype: limit in only computer and internet usage.

Secondly, when people are getting used to using skype on cell phones, Skype could produce its own kind of Skype phones. They can provide low connection price to customers as well as a “Skype phone” if they sign contracts with 1 year or 2 year plans. People can use only Skype SIM card in this phones. In this case, Skype no longer needs to rely on big telecommunication companies, they can just buy part of their 3G network and operating in a way like independent telecommunication companies. According to Elliott, using an IP phone is an inexorable trend, (Elliott 2010), therefore, earlier adopt of this method can bring advantages like protecting value-creation, in terms of early mover advantages: Firstly, if a rival surge into the market, customers may think twice because they tend to have high switching cost. They have to finish the contract or pay the expensive penalty. Secondly, people do not want to change service easily unless the rival has really good offer, because new contract means risk. Most people tend to believe the original company because of buyer uncertainty. Thirdly, network externality is another issue. As mentioned before, the Skype phone should be designed exclusively to Skype card. That would act as protection because once one wants to change company they may consider the fact that they cannot bring the contacts with them and the old phone becomes useless. Furthermore, during the usage of Skype phone, many relatives and friends may have been brought to the plan. Once they want to change company their friends may stop calling him or her because the increasing rates. (Weerahandi et al. 1995) This would increase switching cost and may have an effect of protecting customers.

Above all, facing big threats from Google and other VOIP companies, Skype should take action on broaden markets in Chinese market. Specific method can be divided from first relying and cooperating with big telecommunication companies to developing and establishing its own system. The key concept is to achieve early mover advantage to protect value creation. It is to be believed that with appropriate management and marketing strategies, Skype would keep its lead position in the field.

Reference list

Dean, J, Fowler, GA, Back, A, 2010, ‘China Threatens Google’, The Wall Street Journal, 10 March, p.A.1, accessed 30 August 2010 from ProQuest Historical Newspaper Database.

Elliott, D 2010, ‘The Future of Voice’, Wireless Week, Vol.16, no.3, pp.30-31, accessed 30 August 2010 from EBSCO database.

Gomes, L 2010, ‘Users: Billions. Profits? Maybe.’, Forbes Magazine, Vol.185, no.10, accessed 28 August 2010,

Jeol, D 2008, ‘China Moves to Reform Telecom’, Red Herring, 28 May, p4-4, accessed 29 August 2010 from ProQuest Historical Newspaper Database.

Weerahandi, S, Moitra, S 1995, ‘Using Survey Data to Predict Adoption and Switching for Services’, Journal of Marketing Research, Vol.32, no.1, pp. 85-96.

Weintraub, S 2010, Google Voice to become Skype-killer tomorrow?, CNN, accessed 30 August 2010,

RUNNING HEAD: Strategic Plan, Part II: SWOTT Analysis

Strategic Plan, Part II: SWOTT Analysis
Kelly Howerton
University of Phoenix

Strategic Plan, Part II: SWOTT Analysis
SWOTT Analysis In the business world, SWOTT analysis that reveals company’s strength, weakness, opportunities, threats and trends moreover have vast implication in achieving the objectives. Through the correct comprehension of SWOTT analysis, companies can evaluate both the external and internal factors that continuously smooth the progress of managing the predetermined objectives. “Accurately applied, this simple assumption has sound, insightful implications for the design of a successful strategy (Pearce II and Robinson, 2009).”Essence of Time prides itself on being efficient, intuitive, and loyal to each and every one of its customers. It is the objective of Essence of Time to acknowledge and surpass the anticipations of the clients by increasing the value of their lives and lessening their amount of stress. Through a complete and careful SWOTT analysis, the company can see where improvement is needed and ways to better manage the factors that could prohibit it from achieving the set goals. | Strength | Weakness | Opportunity | Threat | Trend | External Factors | | | | | | Legal and Regulatory | This external force would advance the potential of the company’s strategy formulation. | Interest rates set forth by the government. | Government Regulation softening. | Frequent alterations in the legal/ regulatory frameworks or rules. | N/A | Global | Services are in high demand in most parts of the world | limited resources for expanding its global reach | Positive market perceptions. | Some clients are entering into strategic partnerships to expand their global footprint | N/A | Economic | High chances for the possibility of outstanding growth | Clients will look for low-cost shoppers and not be as focused on the quality. This could decrease the profits of the company. | High opportunity to attain the renowned corporate name & fame through deliver all the unexpected economic information to their customers in advance | Clients may have decreased clothing budgets due to economic downturns | It reflects both increasing & decreasing trend due to frequent economic changes. | Technological | New Technologies make it possible to expand service reach | Other clients are investing in newer technologies | The availability to conduct the entire business on the internet. | The capabilities of using Skype to interact with clients. | N/A | Innovation | Relationship of selling & marketing | Key processes are not very cost competitive when compared to other service providers | A new international market. | N/A | N/A | Environmental | First company of this kind established in this town. Loyalty of customers and vendors. | Limited resources. | An area of the market that has been vacated by an ineffective competitor. | N/A | N/A | CompetitiveAnalysis | relationships with customers and an established client list, special skills with fashion sense and service techniques for delivery to home or office | miscommunication between the company and a client or difficulty in fulfilling an assignment in a timely manner | Globalization | High competitive pressure | Growing trend and customer base. | Social | Stable social environment with proper evaluation of financial conditions of employees | Sometimes create social conflict. | Executive-level clients typically work longer hours, thus limiting their time for shopping, yet there is increased social pressure to dress fashionably | New ways of management can be generated | Social environment is greatly integrated with economic aspects. | Internal Factors | | | | | | Strategy | Effective formulation & implementation of strategy is conceived as the platform for business success. | It requires huge capital investment | High changes to gain competitive advantage through beneficial strategy. | Risk of failure is high if it does not look at all perspectives of the business like financial, human, growth, etc. | Effective formulation & implementation strategy plays a part in the competitive position, market share & growth. | Structures | N/A | N/A | N/A | N/A | N/A | Resource | If the employment of resources like capital & human factor in the correct way then it will assist the company in striking cost advantage. | Scarce Resources | Increased changes of business growth. | Due to insufficiency of resources, the company is unable to secure opportunities existing in the market. | Through promotion the company’s name & loyalty, businesses can capture large market share. | Process and Systems | Economical or effective systems and processes enhance up the company process. | High requisite of capital and frequent training to workforce. | Great chances to gain good image & competitive position. | High resistance to change by the staff members. | Growing trend because changes in the system/process must be made as a result of the environment. | Goals | Availability to increase capital, employees, and credit by established clients. | N/A | Seasonal, weather, fashion influences. | Vulnerability to recession and business cycle. | N/A | Strategic Capabilities | N/A | N/A | Capabilities of expansion with many opportunities for success. | Changing stakeholder needs. | N/A | Culture | Valuable intellectual property. | Chain stores have advantage. | Lifestyle changes. | N/A | N/A | Technologies | Competitors slow to adapt to new technologies | Lack of access to skills or technology. | Accepting standards brings economic expansion. | N/A | N/A | Innovations | Addition of complementary services. | N/A | The ability to offer greater value that will create a demand for the company’s services. | N/A | N/A | Intellectual Property | Ability to move to better strategic group. | High operating costs. | N/A | N/A | N/A | Leadership | Thorough research and development. | N/A | Moving into innovative market divisions that offer enhanced earnings. | N/A | N/A |

Economic, Legal & Regulatory Forces and Trends
Strategic suppleness and compliance can be acknowledged as the Essence of Time’s ability to main modifications in its situation to be characterized to involve quick, support for innovative paths of achievement. To distinguish the reply to these alterations, and to operate rapidly when the moment is to discontinue or overturn the obligations of accessible resources. The company will be faced with changing interest rates and taxations, but must change to look like an unavoidable and indispensable part of the development of Essence of Time in order to accomplish this adaptation in a positive way.
How Well the Organization Adapts to Change
Through Essence of Time’s hard work of attaining intellectual property, the company plans to employ much improvement to stay at the forefront of competition. Consequently, Essence of Time anticipates many modifications and accepts such. Throughout the change in clientele, as more efficient ways of conducting business are introduces, Essence of Time understands change will follow. Essence of Time prepares to engage strategic planning in persuading changes, making improvements a high precedence to preserve a competitive advantage.

Supply Chain Operations of the Organization
As Essence of Time is chiefly a provider of services, there will be some paperwork involved. However, the initial interviews with the clients are imperative to the success of the business. If this section of the supply chain fails, the company could also fail. Gaining new clients is vital to the development of the company. In order to make sure the company is headed in the right direction, I would conduct several focus groups comprised of current and prospective clients to make sure the appropriate services and competitive prices are being offered. With the accuracy of the analysis from the focus groups, the objectives could be re-aligned accordingly.
Economic Factors
This section of the SWOTT analysis is very important to the company because there are strengths, weaknesses and opportunities that fall into this category. The company must be aware of the economic climate, the fashion consulting and personal services business, the client profile, and the rivalry that the company will deal with as it advances throughout its business procedures. Presently, the economic market situation in the United States is judicious. The reduction of the subprime finance market together with rising gas prices has convinced people to suppose that the United States is on the verge of a twofold economic recession. However, Essence of Time targets very wealthy and very busy people who will value the company’s services. In the occurrence of an economic decline, Essence of Time could have a decrease in its profits. Fashion consulting, personal shopping and style consulting services are a luxury, and during tough economic climates, Essence of Time may have issues with top line income and client retention. However, the business is catering to wealthy people that have a much greater ability to continue to live wealthier lifestyles despite deleterious economic conditions.
Competitive Factors
One of the biggest trends in the United States market in current years has been the quick drop in the amount of small, separately owned businesses. These small and regionally owned companies are quickly vanishing. They simply cannot compete with the retail giants and have lost many customers to these businesses. However, by offering outstanding service and convenient locations, these retail companies will have a difficult time competing with Essence of Time. Essence of Time will need to keep up with the competition therefore, the company will need to add additional stores in the future and expand to more countries.
Technological Factors
Altering technology could possibly influence the need for Essence of Time’s services. According to Advameg, Inc. (2010), “technological changes may create new opportunities for the firm, or threaten the survival of a product, firm, or industry” (Encyclopedia of Small Business). Value is portrayed merely as the client’s inclusive assessment of the utility of a product based on perceptions of what is received and what is given. Essence of Time can achieve sustainable competitive advantage in the course of occupying diverse service elements, such as knowledge, and credibility traits, to improve firm accomplishment.
Environmental Factors
The environmental factors that will affect the company the most is the change in government and the job market. If fewer people are working, there will be a smaller need for personal shoppers. The strength of Essence of Time is that it is the first of this type of company to be recognized in the area and has the reliability of the clientele and merchants. The employees of Essence of Time must also need to be aware of cultural differences and the diversity of consumers in order to ensure that the clients’ particular needs are met. Through systematically selecting, watching and recording behavior and characteristics of people, data compilation forms can be created to see what changes if any need to be made.
Social Factors
Essence of Time accepts the socio-cultural transformations occurring to permit the business to shift in the correct direction with value to outlooks in society. Societal and intellectual effects cause alterations in opinions, ideas, standards, traditions, and ways of life. Essence of Time’s ability to predict adjustments in these sections can confirm to be valuable while failure to respond to these changes can be destructive. The growing concern by the clients is to be able to purchase items while saving money.
Internal Forces & Trend Considerations
Various essentials within a business’s internal environment can also have an effect on marketing activities. The internal forces of the company are the strategies, resources and process and systems, which will be made by Essence of Time and will have the ability to be modified any time by the business itself in relation to the altering conditions of the company situation.
Conclusion
It is not merely sufficient to categorize the strengths, weaknesses, opportunities, and threats of a business. Through application of the SWOT analysis it is essential to decrease or keep away from equally weaknesses and threats. Essence of Time should be able to view the weaknesses and determine ways to transfer these into strengths. Similarly, threats ought to be transformed into new opportunities. Ultimately, strengths and opportunities are supposed to be coordinated to optimize the potential of the company. Employing SWOT in this manner can attain influence for the company. It is clearly obvious with the analysis included that SWOT can be tremendously favorable when objectively analyzing the company. However, due to the limited resources that Essence of Time has it will be difficult if not impossible to achieve each goal at once. This is the main reason for listing objectives and goals in a prioritized manner to allow targets to be measured more accurately. According to MP3 Planning (2010), “when an organization matched internal strengths to external opportunities, it creates core competencies in meeting the needs of its customers” (Internal and External Analysis, 14).

References
Advameg, Inc.. (2010). Reference for Business. Retrieved on August 14, 2010 from http://www.referenceforbusiness.com/management/Log-Mar/Macroenvironmental-Forces.html
M3Planning. (2010). My Strategic Plan. Retrieved on August 16, 2010 from http://mystrategicplan.com/resources/internal-and-external-analysis/
Pearce, J. A. II, & Robinson, R. B. (2009). Strategic management: Formulation, implementation, and control (11th ed.). New York: McGraw-Hill

PETE CASHMORE: I'm Pete Cashmore, founder and CEO at Mashable. We're here at Documented@Davos presented by Scribd and Mashable. We're trying to find out what technology leaders think about the future of tech and what's going on here at Davos. So I'm delighted to be joined by Niklas Zennstrom, very, very long and prestigious buyer. You're the founder of Atomico. It's a venture fund. Also co-founder of Skype, co-founder of Kazaa, co-founder of Joost as well. What else am I missing? Rdio. A great many internet companies, digital companies that have really changed the world. So I'd love to start on Atomico. What you're working on right now, what kind of investments are interesting to you?
NIKLAS ZENNSTROM: So, first of all, I think that it's never been as interesting time to be in this industry and to find companies to invest in because we're living in a world where for every day or every year, there are more and better opportunities. And these are things that are driven by a few bigger trends. There, obviously, continues to be more and more people coming on the internet, using the internet.
But if you think back just a few years ago, we did not have the mobile internet. With iPhone, and Android, and the tablets, the whole paradigm is shifting. So you have all new set of companies coming up with new innovative products. So the speed of innovation is happening faster and faster.
And also, today it's much easier for an entrepreneur to build a company because you can utilize the cloud, all the stack of existing technologies, so it becomes more capital efficient.
So for us, what we're trying to do, we're trying to find companies who take advantage of these big trends, who try to be global companies and take advantage of some of these technology trends, and try to be big companies.
PETE CASHMORE: Is there a common thread to the startups you invest in?
NIKLAS ZENNSTROM: Yeah, I think there are. The biggest common thread would be the founders themselves. Because at the end of the game, this is about the people. It's always about founders who are passionate about what they're doing and have an idea to change the world, and want to make something big. So that I think is most important thing.
And then, the other thing for us is that our focus would be-- your graphical focus. Sometimes we joke and we say, we are rest of the world, i.e. we're not Silicon Valley. And that is because me, I'm coming from Sweden, and we're based in London. But what we see now is that there's so many more opportunities happening every day outside of Silicon Valley.
So while Silicon Valley is and probably going to be for a considerable time, the most important geographical area for tech companies, but every day there's more and more opportunities elsewhere. We're trying to find companies in other locations. We're trying to help these companies to expand internationally. Because companies today, once you got it working, once you figure out the product, it's important to have international expansion pretty quickly.
PETE CASHMORE: Well you're famously an investor in Rovio, which launched Angry Birds. Is there another Angry Birds sitting in Europe that we don't know about that we're all going to be playing on our iPads and iPhones in the next few years?
NIKLAS ZENNSTROM: Rovio is an exciting company. They had over 600 million downloads and I think they had a few million downloads just over Christmas Day. It's one of the few kind of app companies that have really become a global brand. And now what they need to do is to take this and to build this much more into a platform.
But it's interesting. There are several other companies that we'd see around Europe which are pretty good game companies. So it just happened to be that the most common activity on a smartphone is playing games.
PETE CASHMORE: It's games. I look at the top 10, it's game, game, game, games.
NIKLAS ZENNSTROM: The challenge for these companies is down to, can they be a sustainable business? Because if you're a network effect business, then you have a better chance to become a sustainable business.
PETE CASHMORE: Is gaming going to become-- because you do look at the App Store and everything's a game. Is that going to become part of other apps? Is that the way to get other content or this whole gamification trend? Or is it just a fad?
NIKLAS ZENNSTROM: I don't think it's a fad. The reason why games are so popular is that, you think about you're sitting waiting for your friend, for a meeting or in a bus, in the train. And either you do your email, you check your tweets, or whatever. But it's also been nice to just play games for a few minutes. So people feel good about it. And before you had to go and sit in front of your computer or your game console to play games. Now you can do it whenever you have some minutes to kill. So I think that's why games are important.
But what's also interesting to look at now is also companies which are also part of the transaction streams, which are a part of monetization. Because sometimes one of the big challenge I see with app companies is that one of the great opportunities is that you can just put up an app in the Apple App Store and you can charge $1 for it. And it's great. If you're developers, you can make pretty good income on that. But then to be a sustainable business, you need to transform that to have a recurring revenue stream on your subscriber base. And that, I think, is a challenge for a lot of these app companies.
PETE CASHMORE: What is that? In-app purchases? What's the model?
NIKLAS ZENNSTROM: In-app purchases, for example. Or just being part of a transaction stream. So we're looking at companies now more and more which are-- inherently in their business model is also that there's some kind of transactions in them.
PETE CASHMORE: Understood. Well, we've only got a few minutes, so I want to speak really quickly, and maybe get some of your input based on your experience of launching all these other companies. I mean, first off, I guess Skype. Everyone loves it, uses it, one of the most popular apps. What do you think the future is for Skype under Microsoft? Are you optimistic, pessimistic? Think they're going to be a good parent to it?
NIKLAS ZENNSTROM: I'm a very happy Skype user these days, and I'm using Skype here. I'm using it everywhere. And I walk in a conference and I hear the Skype ring tone. So I think that Skype has become part of the fabric of what we're doing on the internet because it fulfills such a basic need for people to have communications with each other. But as any other company that, if you have a network effect, as long as you focus on your product and your customers and innovation, continuously improving the core of the business, I think a company like Skype is in pretty good shape. But I cannot really-- I don't know what Microsoft will do. I hope they will continue to do what's good with Skype. And I think it's a good home for them.
PETE CASHMORE: Great. Well, you were also obviously, co-founder of Kazaa. And I don't know if you've been following it too closely, but there's been a great deal of, I'd say, controversy specifically in the US and some of our coverage in the past couple weeks about some bills. There was one called SOPA, one called PIPA. And basically, there's these attempts to crackdown on piracy through these laws. But a lot of the technology leaders feel like they're overly invasive. That they're going to be a threat to-- for instance, Google's come out against it. Facebook has come out against it. And also, last week Megaupload was taken down, which is one of the popular file sharing sites. What's your take on tackling these issues? Is there a genuine issue? And is the technology industry doing enough to defend itself?
NIKLAS ZENNSTROM: So to me, it feels a little bit like a lot of this legislation is lacking-- I'm sorry. Not lacking. It's lagging reality. I felt a little bit like, we fought a big battle with the record companies and the movie studios with Kazaa. But we [? genuinely ?] want to create a business model. We thought you can have a subscription model. You can have advertisement. You can have pay per play and it can be revenue shares and whatever. And at that time, there was a lot of push from that industry, content industry to have a lot of legislation and protection.
But what we see today now is that there's a lot of really, really good legit services. Whether they are subscription services or pay per view or pay per play service. So today people can access legit content, whether it's music or videos online. And you will always have people who say, well, I'm going to be smart. And I'm just going to kind of download it from somewhere. That's always going to be there. But in content, you always have had a set of people which don't pay for music. People listen to the radio. People don't pay for the radio, you just listen to it. People watch free to air television. So you always had that. And on the internet, you're going to have it as well.
But I think what's important is to look at also all these innovative models where you have content being mashed up and being recreated for something and become something new. And, in general, I think it's something that adds value and doesn't destroy any value. So I think that some of these new legislations are a little bit too late.
PETE CASHMORE: So am I right in reading that you actually would much rather focus on, how do we monetize the audience that is willing to pay? How do we focus on creating new business models versus spending all our time caught up in legislation?
NIKLAS ZENNSTROM: I know that as an entrepreneur, having started companies which were in this space, and also as an investor, one thing I know is that if you want to build something that's sustainable, whether you're an entrepreneur starting something or an investor, you need to build something that can be sustainable. So I would be focused on trying to find companies which are working with entertainment industry. But you have great services--
PETE CASHMORE: The media companies and the entertainment industry are backing these bills. They're the greatest supporters. Would your message be then that they should really focus on doing deals with those that are pursuing the legitimate models, that are pursuing ways for people to pay for things rather than just-- certainly tying themselves us with all this legislation?
NIKLAS ZENNSTROM: It's like if you're playing a sport, either you play defense or you play offense. And usually the ones that win the most are ones who are playing offense. And playing offense mean that you're trying to move forward and move with the flow. So I think that--
PETE CASHMORE: Do you think ultimately the music or the record companies and those supporting this are going to miss the ball if they spend a lot of time focused on this stuff? By which I mean that we saw it with the previous iteration of which you were involved where Apple came along, invented all the great ways to monetize all this stuff. And ultimately, the record companies that didn't get in maybe lost out. Are they going to miss the ball again?
NIKLAS ZENNSTROM: I think that any company who is focusing on what their customers want to have and working with the technology is going to be successful. And I think that the focus needs to be on that end of the spectrum. Having said that, I think it's important for anyone to protect IP rights and respect copyright. But I don't think you're going to win that by passing a lot of bills. I think you win that by making sure there are great, legit services. Because the population of the internet is basically everyone. And these people are not pirates. This is normal people who want to enjoy content.
And if you provide services which are attractive and charge for them, whether they're direct payments bundled with your, maybe, mobile phone bill, or by advertisement, people won't, in general, have a problem with it. So I think that should be the focus. But that doesn't give people the right to go out and violate intellectual property laws. And you have property laws in place already. So I don't think you need to put a lot of additional legislation in place.
PETE CASHMORE: Got it. We're getting told we're about time. But I want to cram in one question if you will be really quick. And I know you're involved in the start of online TV with Joost. There's a lot of new TV startups bringing up-- and I know Google is getting into TV with Google TV. It hasn't quite seen much pick up. Do you think any of that stuff is going to take off? What's the future of online TV and what did you learn at Joost?
NIKLAS ZENNSTROM: We decided to start Joost in 2006, and our conviction was that this whole linear television that you have to sit down and watch TV and see whatever's there based on a broadcasting schedule, that's something that's going to be gone. Because today, people have so much choices what to do-- watch TV, go on the web, and play games on their mobile phones. So television needs to be there for when the people want to watch it. So that for sure is going to happen. And it just takes a little bit longer time. But I mean, at least look at myself.
When I watch TV, I don't-- well, sometimes I watch TV on the news and I just turn on BBC, or CNET, or whatever it is. But if I want to watch a program, I either go to a video service, maybe iTunes, or something else, and I watch something on my terms. When I want to do it. So that's for sure-- that's happening.
PETE CASHMORE: So it's the future, but it's still in transition.
NIKLAS ZENNSTROM: It's still in transition. And also I think what's interesting is that, actually a lot of the existing TV companies have been quite good in transitioning to the online world.
PETE CASHMORE: So they're getting it?
NIKLAS ZENNSTROM: They're for sure getting it.
PETE CASHMORE: Fantastic. OK, so we're about time. But Niklas Zennstrom, thanks for talking to us here at Documented@Davos. Thanks everyone for joining us. We have more interviews from Mashable and Scribd. Hashtag is #DavosDocs. Thanks so much, Nik.
NIKLAS ZENNSTROM: Thank you.
Telecommunications

As is usually the case with technology, the big leaps forward take place at the higher levels (in the corporate sphere) and then trickle down to ordinary users at home. When it comes to telephone systems, there is no exception: Business Telephone Systems provide cutting-edge solutions to the many and diverse communication needs that a company may have, incorporating the latest technologies and utilizing the most efficient resources possible.Ask any business leader, and they will tell you that having a modern telecommunications system installed in their offices is absolutely crucial when it comes to finding new clients/customers as well as maintaining old ones, in addition to realizing a whole host of administrative chores that are essential for keeping a company afloat. In fact, the mere reference to telephones alone is insufficient at this point in the game, as all kinds of telecommunications pathways need to be integrated in order to maximize efficiency at the business place—but we'll get to that later.

With regards to simply having efficient and cost-effective telephony services at a business's offices, one crucial factor is having a Least Cost Routing service in place. Least Cost Routing (LCR) is a Business Telephone System solution that enables a buyer (aka the business) to realize outbound calls at the least possible expense, with variable controls regarding the quality of the routes being used and the quality of the calls being made. Any business that realizes large volumes of outbound calls would be wise to contract an LCR team, or install an LCR box in their offices.

The way it works is like this: Various telecoms carriers are available to carry a call from a source location to a destination; what the LCR service accomplishes is that it finds the route with the lowest fares that can carry the call needing to be made. The premise here is the fact that telecoms carriers trade destinations with each other, and there is usually more than one option for any call being made. An LCR team will create a table with all the pertinent information of carriers, routes, rates, and call quality and route quality statistics and will calculate, using advanced algorithms, which finally configuration is in the best interests of the business at hand. Of course, a business can establish certain minimal call and route quality standards and impose them on the LCR service planning process. These are measured using certain criteria, such as the average duration of a call, the amount of calls answered out of the total amount of calls made, and the delay between the last digit in a phone number dialed and the time the caller actually begins to hear a ring. The first of these criteria relates to call quality, generally, and the second and third criteria refers to the route quality. Managing a tight ship in all these regards is a central component in any state of the art Business Telephone System.

Another factor to be considered by any business trying to make their telephony service that much more efficient and streamlined is Computer Telephony Integration, or CTI. Basically, what this is about is the ability a business has to coordinate computer and telephone usage. Since modern telephone equipment is really nothing more than a specialized computer, it is logical that telephone systems should be subordinated to a business's computer network. Though there are different degrees of integration possible (first-party call control and third-party call control), the basic idea is the following: an operator can make their phone operations more streamlined and can access and save more information, more quickly. For example, a phone operator can make their dialing more expedient by utilizing automatic dialing or predictive dialing features of CTI, the latter of which is simply a more sophisticated version of the former, offering an operator a valuable tool in continuing their operations without glitches and as quickly as possible. Another aspect of CTI is the ability of operators to retrieve data from a centralized database system, accessing valuable information about the person calling them or the person they are calling (as the case may be), and allowing inbound calls to go through a series of informational filters which provide the operator with plenty of info from the get-go of a conversation. All of this information is stored in the central database, of course. Furthermore, CTI provides a business with the ability to implement call recording, a feature which can not only protect a business's interests in the case of possible litigation or claims, but generally allows for operators to accept legal commitments on the behalf of a caller and for a company to more securely monitor service quality.

In the end, Business Telephone Systems are all about sharpening a company's competitive edge. These modern systems are, in the best of cases, strategically designed to contemplate future advances in telephone and other telecommunications technologies, to cut communications costs, and to provide a higher quality service. No business profits or grows when calls are being dropped, when conversations are of poor quality and the people at either end of the line can barely understand or hear each other, and when calls aren't even getting through. Furthermore, businesses do not profit when phone operators have to tediously and laboriously search for necessary information in order to fulfill the purpose of the call they are making or that they are receiving, or when, after making or receiving a call, they have to follow an outdated and inefficient protocol in order to register whatever information was garnered from a given call. Business Telephone Systems provide companies with the ability to surmount these problems, and to create more streamlined in-house systems which reduce costs, cut times drastically (both as a measure of how long a call must take and how long it takes for the results of a call to be introduced into the company system or database), and help bring a business venture up to date with what is on the market. After all, within a relatively short period of time telephone networks will be completely subsumed by computer networks, and those that fail to rise to the opportunity will find their bottom line is seriously (and negatively) affected.

This article is written by Guest Blogger at VOIP Guides, Roger Collings. He is a telecommunications consultant who helps businesses to get the most out fo their telephone systems.

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