It has become increasingly clear to me over the past few weeks that Microsoft has made an astonishingly bad decision in buying Skype. But that’s that the worst part.
The worst part is that it is now completely obvious that the top people at Microsoft, Steve Balmer among them, have no clue about the future of technology.
Here’s the deal: all value is moving to the cloud.
Look at the top valued companies today. Google. Facebook. All the hot new startups that are building value. Zynga. LinkedIn.
They are cloud companies.
They live in the cloud. They take us into the cloud. They work on the cloud. They make the cloud meaningful.
And what about Apple? Apple, which is now trending toward a more than 2X valuation over Microsoft?
Don’t they make a lot of stuff? Things? Devices.
The answer is yes, of course. But first of all, those devices are on-ramps to the cloud. No-one has made the cloud relevant to average people (who don’t have a clue what the cloud is) than Apple. Mobile apps virtually didn’t exist before iPhone. Mobile data is dominated by iOS (and now Android). iPad is a perfect vehicle for cruising the virtual road.
Value started in hardware (IBM etc)
Value moved to software (Microsoft etc)
Value is now moving to the cloud (web 2.0 and 3.0 companies)
The cloud is not magical. It includes hardware. And it includes software. Of course. But it is the opposite of installable software.
One guess what Skype is …
Buying Skype is a great business decision … in terms of technology, in terms of clients, in terms of integration into core products.
But all of these tactical reasons that say YES are vastly outweighed by the massive strategic reason that says that Skype, even though it’s P2P, even though it has added a small cloud-ish component via Facebook … is fundamentally old-fashioned software.
Which makes Microsoft’s $8.5 billion dollars an investment in yesterday. Which follows so many of their other recent investment decisions. Which signals yet another death-knell (did you need one more) for Microsoft’s domination in the world of technology.
Microsoft, quite simply, is v2.0.
The world is moving forward 3.0 is upon us. Google+ is showing the way. 4.0 will come. And a company that is optimized for surviving and thriving in a 2.0 world is de-optimized for surviving in a 3.0 world.
Not cool. Fairly explosive stuff. Not what you want to wake up to in the morning, if you’re EasyBits.
I left EasyBits about a year ago to pursue more interesting options in SOLOMO (social, local, mobile solution). But I can make some educated guesses about what’s going on. Here’s the deal, as far as I can see:
EasyBits has been making their game channel for years. It’s one of the first “app store” models online. It’s real, it’s not dangerous, and it’s well-intentioned. EasyBits and Skype have a long relationship and a long history, and an agreement on providing the game channel for Skype.
The problem is that it comes almost as a sort of payload with Skype … the Skype Extras manager. As such, it’s not something that people are intentionally downloading and installing. And EasyBits is not necessarily the most adept at informing users about what it’s doing … after all, their goal is to get installed. Perhaps not at all costs, but perhaps not smelling like roses either.
I can’t claim any insider knowledge right now, but everyone knows that Microsoft is buying Skype. One can only assume that EasyBits might see Microsoft’s acquisition as a major threat: when Skype is theirs, they will naturally fully review all agreements, all code, all relationships … and who know what they’ll keep and what they’ll throw.
Therefore, if you’re EasyBits, you’ll probably thinking about life after Microsoft. And that means independent existence on users’ PCs, courtesy of Skype initially, but with a separate existence.
Well, combine that desire with perhaps not the highest regard for users’ preferences, or a clumsy update (including a spelling mistake, after all) … and you’ve got the current situation.
Here’s what’s obvious to me: Skype, with the acquisition finalizing, isn’t going to take any chances.
EasyBits is not going to get out of this one easily.