Microsoft’s IM and consumer VOIP Power Play

This could be seen as an unholy alliance for many!

I can think of alot of other things that Microsoft can do with $8.5b, such as making their MS server product more stable, eradicating blue screens of death from Windows 7, and perhaps get the next release of Halo out on the streets

But this singular move tells the world where they want to go, and they have their sights set on the telecommunications industry in a big and nasty way.

My last post talked about some of the reasons why Avaya, one of the largest telecommunications providers in the world, took a loss of some $900 million last year. Putting aside the Nortel acquisition, some of that loss was a loss in real world revenue. And alot of that loss could be blamed on the Microsoft Lync insurgence.

I have MS certifications and I can tell you, that the Lync product is good, quite good. Yes it still does have its limitations and issues. But for many a business, Lync makes things very easy, and very cost effective. And with the majority of companies out there with a Windows desktop and Windows servers, the dialogue about “Hey, mister IT director, we can remove all of your voice costs in one fell swoop”, its no wonder why Lync has gained such moementum.

The purchase of Skype means that Microsoft will be the dominant force across all VOIP communications for consumers. With their MS messenger as well as Skype, they will have the ability to directly market and sell services to hundreds of millions of consumers and businesses alike. The ramifications could also hamper Google, as linking a new skype could encourge Bing searches, etc. and remove Google searches altogether.

For my beloved telecommunications industry, I worry about the more traditional players. Mitel, Avaya, Cisco, as well as many others, should be worried. I forecast a day where Microsoft provides new and innovative features and services on Lync platforms for Skype only users… blocking out the others, and forcing more businesses to adopt their services.

This is not yet over, either. The unholy alliances of Avaya/Nortel and now Microsoft and Skype is heralding in a new phase in this industry; a phase of consolidation and rationalisation across the manufacturers. This will likely be good news for the consumer, as there will be a little more simplicty in the marketplace, standards will improve and there will be some interesting innovations. But for some of the manufacturers, there will likely be some victims.