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Greg on eBay/Skype

Check out Greg’s opinion of the eBay/Skype deal. I am surprised he is a bit skeptical. Will Greg be correct in his assumptions? Hopefully we’ll know soon if he is right or wrong.

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Continental Airlines Workstations

If you ever get to Newark Airport you can find workstations in Terminal C at gate 101. There may be more of these workstations with the airport – I just stopped at the first ones I saw. These workstations are something I pleaded with the airlines for a number of years ago. I am now comfortably working in a corporate quality workstation thanks to Continental Airlines.

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US Robotics And VoIP

I mentioned recently that just about every company needs a VoIP strategy. You can embrace it, ignore it or just watch it. Regardless, you need a strategy. US Robotics now as a VoIP strategy.

The irony here is that the company built its business selling modems which off course transmitted data on telephone lines. Now a few decades later they are transmitting voice on data lines.

The company is way behind in the VoIP hardware business and besides a few “seasoned” tech-heads like me and Tom, how much mindshare does the US Robotics have these days?

They will have to do something very novel if they want to play in this space. I am looking forward to seeing what they come up with.

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Oracle Buys Siebel

Oracle Buys Siebel

Months back I mentioned in my High Priority column in Customer Interaction Solutions magazine that there are web rumors of Oracle buying Siebel. Siebel is the perfect company for Oracle to acquire as it allows Ellison’s company to get large amounts of new maintenance revenue to help fuel the company’s need to constantly grow.

Today MarketWatch reported that indeed Oracle will purchase Siebel for $3.6 billion dollars.

This is not a good deal for the customer in my opinion as Siebel is the CRM leader and as such is focused exclusively on the customer relationship management market. A purchase by Oracle will no doubt dilute focus and attention from CRM, making it just another product line instead of a core strategy.

We can expect reduced innovation as there will be more of a focus on a cohesive software strategy as opposed to making and selling the world’s best CRM software.

Others will argue that in a world where integration becomes more and more important, Oracle will be able to leverage Siebel and have it talk seamlessly with other applications in the company’s portfolio. Yes, that is true but it removes the best of breed argument IT managers make when deciding what products to purchase. How can you have best of breed products from the same company? It just doesn’t work like that.

Will the EU or DOJ allow the deal to go through? I think there is a chance the deal won’t be consummated. Siebel has a near-monopoly position on the CRM space and even when you consider Salesforce.com and a handful of other players, they don’t have the market share or share of mind that Siebel has garnered over the last decade. Even Microsoft hasn’t done a great job selling CRM software. You could argue that Microsoft’s problems are its own or due to market pressures from competitors. Either way, it shows that it isn’t easy to set up shop as a competitive CRM software company -- even if you have an unlimited budget and infinite distribution channels.

If regulators are truly concerned about having a competitive CRM space, they will not allow the deal to go through. As an IT buyer you too should be concerned about the rapid lack of choice in the CRM software space. If there is one thing we have learned in technology over the years it is that competition equals innovation.

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eBay Buys Skype for $2.6 Billion

After all the rumors of eBay purchasing Skype and the downplaying by both companies, the acquisition is official today. As I mention in prior postings the significance of this announcement to the VoIP market cannot be understated. Ebay has finally helped the market put a valuation on a VoIP company and I am sure VCs and other companies in the space are ecstatic.

That is not to say everything is fine and dandy. BusinessWeek talks of frothy VoIP markets and other terms not heard since Allan Greenspan tried to talk down the Internet boom in the late nineties.

Whether 2.6 billion dollars is too much money to pay for a company with forward looking earnings (well 2005 anyway) of $60 million is unknown as Skype really has no equal in the VoIP space. There is simply no other service that has garnered so much attention from the market. Furthermore, no other service dreams of having as many users.

Right now, Skype gets just over a dollar per active user. I am sure eBay thinks – and they are likely right , that Skype will grow its active user base and also grow its revenue per user. So in another 18 months or less we can expect Skype to have 100 million active users and perhaps each will pay an average of $3. This gets us to $300 million.

Of course Skype has its potential problems to deal with. Port blocking in some countries and the declaration that Skype is illegal and a fining offense are obviously not too good for your business model. Still, this is exactly what happened last week in China. Will China become a model for the rest of the world or an isolated incident?

These questions along with competition from AOL, Yahoo, Google and Microsoft are really good reasons to explore and take an exit strategy. Hats off to the Skype team that is partly responsible for bringing VoIP into the mainstream. Zennstrom and Vonage’s Citron can take a good deal of credit for the excitement and activity in the VoIP markets today. A hearty congratulations to both of them.

I personally cannot wait to hear Niklas Zennstrom speak at Internet Telephony Conference & Expo in another month to get his take on this transaction… This is really big for the VoIP market.

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