Skype Stunting Microsoft, Nokia Turnaround

  • Tweet  
  • LinkedIn  
  • Facebook  
  • Google plus  
  • Send to Kindle
  • Send to  

Nokia is blaming Microsoft’s ownership of Skype as the reason many carriers don’t want to carry the new Lumia smartphone powered by Windows Phone 7. There’s some truth to this excuse, but it’s more a reflection of what’s happening across the technology landscape in terms of allies becoming frienemies and competitors.

The reviews of Nokia’s newest phone, the Lumia powered by Windows Phone 7, have been generally positive. The sleek design, the easy-to-navigate interface, the stable platform and the ease of integration with Windows-based infrastructure seem like a winning combination.

Yet, Nokia reports it’s having a hard time getting wireless carriers to pick up the smartphone, even as the popularity of the vaunted Apple iPhone begins to wane. The reason: Skype.

Related articles

Nokia CEO Stephen Elop recently told shareholders that carriers are hesitant to pick up the new smartphone because of Microsoft’s ownership of Skype, a Web-based telephony and video conferencing service that bypasses many of the voice and text subscription charges.

“If the operator doesn't want us, it doesn't want us. We will appeal to them with other arguments. We have more to offer to them. It is a good point to start the discussion from Skype,” Elop said, in response to shareholder questions.

Skype, which was acquired by Microsoft last year for $8.5 billion, may seem like a good scapegoat for the struggling handset manufacturer. The one-time market leader has been racing to rekindle its sagging fortunes against Apple and Samsung. The Microsoft relationship, which came with more than $1 billion in fresh capital, is the cornerstone of that strategy. But there is some truth to the assertion.

In an interview at the Milken Institute’s Global Conference, AT&T CEO Randall Stephenson said Skype was becoming a more viable voice service because of the improving quality of wireless data networks. It wasn’t a compliment, as Stephenson lamented about offering the Apple iPhone with unlimited data plans, a move that crushed the carriers’ wireless network capacity and forced it to make capital investments with little new revenue.

Lurking in the background of this discussion is a much larger issue: the need for vendors to incorporate more and different arrows in their quiver, even when it brings them into competition with onetime allies and friends. Skype may prove just such an example of turning Microsoft and Nokia’s telephony carrier allies into at best “frienemies” or, at worst, outright hostile competitors.

The technology market has been seeing a steady increase in collaborators turning competitors. The biggest and best example of this is Cisco, when it entered the server market. For the better part of two decades, Cisco was the friend of server vendors Hewlett-Packard, IBM and Dell, as its networking gear complemented their data processing devices. When Cisco unveiled its Unified Computing Strategy, which included virtualized servers, it instantly became a hostile competitor and it redefined the server market landscape.

Over the past three years, the rapid consolidation of the industry through mergers and acquisitions has repositioned many vendors from partners to more competitor collaborators. Hewlett-Packard, for instance, is collaborating with Microsoft in cloud computing and competing for hosted and platform services. Dell has ended its longtime relationship with EMC in storage as it’s steadily bought storage assets, such as EqualLogic and Compellent. And carriers are steadily looking for new opportunities to both grow revenue and keep their networks from being overrun by new technologies and applications.

“You lie awake at night worrying about what is that which will disrupt your business model,” Stephenson said in his interview. “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.”

So, that larger issue lurking in the background is nothing less than unforeseen disruption, as described by Stephenson.

Rapidly emerging technologies, as well as new and different business models, have the potential of keeping the IT marketplace unstable as vendors and service providers look for ways to replace commoditized revenue and increase their value. Caught in the crossfire will be solution providers, who will be forced to either concede pieces of the market to direct sales or get wedged between vendors in their conflicting go-to-market strategies.

The morale of this story: Don’t expect things to get easier anytime soon. The technology, cloud and channel are in for a bumpy ride as the entire market goes through a transition for which there is no precedence.

As for Nokia and Skype, the conflict is likely true. The unfortunate consequence is fewer Microsoft phones making it to market, which will hurt both Microsoft’s consumer and business efforts to revitalize its mobility fortunes.

  • Tweet  
  • LinkedIn  
  • Facebook  
  • Google plus  
  • Send to Kindle
  • Send to  
More on Channel Business

Shadow IT brings ups as well as downs

While shadow IT poses a threat for solution providers, there are advantages to be found as well


Channel millennials to learn from older peers with new CompTIA initiative

Initiative may help with 2015 emerging threat of millennial expectations

NY traffic lights

Gigamon launches partner program

Traffic visibility firm includes pre- and post-sales training certifications in new partner program

Sales online and in the shops

Black Friday wearable tech uptake splits industry

Shoppers may have snapped up a bargain wearable device on Friday, but just how much impact will this have when they choose to wear it to work today?

Visitor comments
Add comments
blog comments powered by Disqus

VARs need to evolve; vendors can help them do it

Who bears responsibility for helping the channel adopt new business models?


Vendor Q&A Series: Charles Foley, Watchful Software

The latest channel exec to sit in the Channelnomics hotseat is Watchful Software's chairman and CEO


Lenovo’s next super challenge: Rebuilding trust after Superfish

The Superfish spyware scandal has tarnished Lenovo’s reputation, causing partners and customers to consider alternate brands


Humans and machines: A dynamic duo

In its latest tech report, Accenture predicts an increasingly ‘blended” workforce, with humans and technology working side by side to bolster efficiency, increase safety, and make great things happen