#ahonen

Mikko Ahonen likes to look at surreal memes and also enjoys surreal memes

Ystävälläni on häät tulossa joten tietenkin poikain kanssa täytyi hälle järkätä polttarit. Polttareihin täytyi luonnollisesti tehdä Jallu. Mietin ehkä viisi sekuntia, mikä olisi polttareiden luonteelle sopiva Jallu. Vastaus on yksinkertainen.

Polttarijalluun tarvitset:

Jallua

Chiliä

Laita chiliä Jalluun.

Valmis.

We all know that over-the-top (OTT) players represent a significant threat to mobile network operators (MNO).

On his blog, Tomi Ahonen explains OTT as “bypass services typically for the most profitable parts of the telecoms business, via apps loaded to smartphones.”

The most profitable parts are voice and messaging. According to Tomi, in 2011 the whole mobile industry made 1.3 Trillion dollars in revenues. 77% went to MNOs of which 84% were made by voice and messaging. In terms of profits, voice and messaging are responsible for 95% of MNOs’ profits.

Now, many new OTT players are pushing into this market and of course represent a major threat to MNOs – to an extent where operators need to be concerned about long-term survival.

Randall Stephenson (AT&T CEO) said in an interview with the New York Times that “You lie awake at night worrying about what is that which will disrupt your business model. Apple iMessage is a classic example. If you’re using iMessage, you’re not using one of our messaging services, right? That’s disruptive to our messaging revenue stream.”

One of the most prominent OTT is Skype. Skype has been around for quite a while.

How much of a threat has Skype been or will it be and what's its role within Microsoft ?

This is my summary of an analysis I read on The Guardian which I enriched with a couple of thoughts from Tomi Ahonen.

(source: Susana Bates/Reuters by way of The Guardian)

  Financial Aspects

In May 2011, Microsoft confirmed the purchase of Skype for $8.5bn. Skype became part of the Entertainment and Devices division which now makes it impossible to identify the revenue portion contributed by Skype. According to a spokesman, Skype calls in the last quarter increased by 41% to 162bn minutes but we do not know how many of these are actually paid. Hence, from the outside no one can tell if Skype directly made a positive or negative impact on Microsoft financially. Indirectly, we can see that Microsoft’s market capitalization grew 22% since the actual purchase of Skype in October when the cap was $279bn to a current cap of about $299.3bn (with 8.33bn outstanding shares and a current share price of 33.55).

  Usage Aspects

The number of users grew from 196m to 300m since the purchase. The Guardian article also described that Skype nowadays seems to have 70m users online concurrently, however, also highlighted that there might be a lot of double counting. Which is cheeky.

Integration Aspects

Clearly, the prime purpose and biggest value that Skype could provide in the context of the Microsoft product portfolio is a deep integration into products like Office 365, Xbox, Windows 8, Bing, Microsoft Messenger, or Outlook.com.

Surprisingly, Microsoft is really slow with this integration, but they are aiming for a seamless integration and experience for Microsoft product users.

  Strategic Aspects

Probably the main consideration behind the Skype purchase was strategic rather than financial (in terms of directly generating revenues). Skype as a de-facto communication application puts Microsoft into the center of people’s communication – aiming at adding value for consumers. That makes sense.

  When it comes to integration of Skype into Windows Phone – which again from a consumers’ perspective makes absolute sense – I am quite sceptical. Skype is an OTT. MNOs don’t like OTT. Microsoft on the other hand wants (or needs) to be friends with MNOs in order to have this channel to market.

  My Conclusion

The direct financial influence of the Skype purchase on Microsoft’s revenues is difficult to measure. Usage -- although also a bit nebulous -- went up considerably. The strategic integration of a communication service into Microsoft’s rich and successful product portfolio adds value for consumers.

MNOs I would assume don’t love Microsoft too much, acquiring one of the major threats to their business and providing this on Windows Phones, which is probably the reason why MS phones are struggling on the market.