Outstanding success in the fog of gloom
By Ross O. Storey
09 Feb 2009
Another amazing success story raised my spirits last week when I was briefed in Singapore by the new Asia Pacific Vice President and General Manager of IP telephony service provider Skype, Dan Neary.
To hear of Skype’s achievements, when too much else we hear about from tech companies today is focused on doom, gloom and economic downturn, demonstrated to me how there is always a flip side to every story – a positive tale to tell, even when it appears that the ceiling is falling in. Many tech firms are hurting, but some (SAS, VMWare, Apple, Sybase, Compuware…and Skype, to name a few) are announcing very respectable financial results – in some cases the best in their history.
Dan, another passionate IT advocate, immediately won me over by describing me as ‘a fellow geek’. It’s amusing to me how not so many years ago, being called a ‘geek’ was a derogatory term that referred to people with military haircuts and thick, black-rimmed spectacles. Having reached my mid-fifties, I do have something of a military haircut (just check my photograph – I’m bald) but my glasses have fine frames. I now regard being called a geek as a badge of honour. But, I digress.
The Skype statistics that a well-briefed Dan Neary outlined to me speak for themselves. Every 12 days the number of Skype subscribers increases by about the population of Singapore (4.5 million) – that’s 380,000 new subscribers every day. The ‘VOIP plus’ service provider now has 405 million users across the plant, and 30 per cent of them use Skype for business purposes. Since Skype started five years ago, they say that people have made more than 100 billion minutes worth of free Skype-to-Skype calls.
“But doesn’t Skype offer free telephone calls computer-to-computer?” I hear you ask. “How do they make money.” Yes, they do make money, Dan tells me that last year Skype, which has been profitable for the past eight quarters, declared revenue of US$550 million last year and, in the fourth quarter of 2008, had revenue of $145 million. Last year there were 2.6 billion (yes, that’s with a ‘b’) Skype Out minutes used, and Dan says that’s growing by 61 per cent.
And as to success? Skype, which is owned by eBay, quotes a survey of Skype for Business users which maintains that 95 per cent of respondents were saving money with Skype, with more than a third of them cutting phones bills by more than half.
Yes, Skype offers free calls, including video calls, between Skype subscribers on computer, but they also have a system called ‘Skype Out’ where people can pay to make calls from their computer to traditional landlines and mobile phones. In its five years of operations, Skype has grabbed eight per cent of the international telephone call minutes . Subscribers also can pay for extras such as online numbers, voicemail, SMS and for a raft of software ‘plug ins’.
The reason for my briefing was that Skype was launching its new Skype 4.0, freely downloadable from its website. This is not just an upgrade, says Dan, it’s the most distinctive new release in company history.
Already a personal Skype user (my step daughter in Australia watched via Skype video, as we opened our Christmas presents from her in Singapore, in front of our laptop web cam) I was amazed by Dan’s presentation. He spoke about Skype having a vision of being embedded in television and it hit me that this convergence – of television, internet, communications and entertainment – was already happening. I bet that before I am in my mid sixties, we will look back and laugh at when we had separate television and computer screens.
Ross O. Storey, currently the Managing Editor of Fairfax Business Media Asia, is responsible for the editorial content and production of MIS Asia, CIO Asia, Computerworld Singapore and Computerworld Malaysia magazines.
