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The gospel according to Niklas Zennström |
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Depending on your point of view, Niklas Zennström is either a geek idol who made peer-to-peer applications palatable for the masses, or a capitalist genius with a talent for selling off his companies when the value is high and before the lawyers start circling. Quite possibly he's both. Together with his long-time business partner Janus Friis, Zennström has been responsible for bringing the world two of the defining applications of the Internet era: KaZaA and Skype. KaZaA (P2P file sharing) ended up succumbing to a welter of litigation strewn across the Australian court system, but by the time that happened Zennström had already sold up and moved on to co-creating Skype (P2P communications).
The latter's offer of free calls between Internet users and cheap calls to existing phone lines proved insanely attractive; Skype now boasts more than 220 million users. It also proved very profitable when eBay coughed up something in the order $US2.6 billion to buy the company back in October 2005. That money has helped fund yet another venture, Joost (essentially P2P TV), which appears on track for commercial launch by the end of the year, with 1 million beta testers already on the system.
Having originally set up Skype because he was having trouble communicating with friends spread between Stockholm, Copenhagen and other exotic European locations, it seems strangely appropriate that Zennström (now London-based and still Skype's CEO) decided to face the media during a Skype press event in Tallinn, Estonia's capital city, and the location where 300 coders beaver away on improvements to Skype. (It might have been even more symbolically appropriate to beam him in via Skype, but the well-established principle that video conference links will always go haywire at the crucial moment, especially if journalists are present, had already been demonstrated in earlier presentations.) So here, in the flesh, the gospel according to Zennström.
Will Skype ever go open source?
One of the more frequent criticisms of Skype from the technically inclined is that it uses its own proprietary protocol rather than a defined IP telephony standard. Developers can build add-ons to Skype via its Extras program, but any other integration possibilities are minimal because of the 'black box' approach. While open source advocates might whine, there's no imminent change on the horizon. "We've chosen to have closed source on our products," Zennström said. "Closed source is a way for us to protect our trade secrets and also to protect our users." The logic is that not having an open protocol makes Skype less susceptible to spam and identity theft. No-one argues it makes Skype impervious, but the approach does seem to slow the criminal and annoying down.
"For us, it's not a question of principle, but of being pragmatic," Zennström explained. Skype itself is a big consumer of open source software, including Apache, FreeBSD and PostgreSQL, and contributes improvements back to those projects, but its own code vault is staying firmly sealed.
Is there such a thing as a typical Skype user?
220 million customers is far from chicken feed, but there's still something of a perception that Skype is more a tool for geeks rather than a mass-market tool. Even Zennström concedes that this was an issue with the first release of the product: "The original version was made by computer scientists for computer scientists," he said.
These days, however, he argues that there really isn't such a thing as a prototypical Skype user. "The market is whoever is using it." Other observers seem to bear that out. "In my studies, if you want to look at the typical Skype user, it's like a Polish taxi driver," said Stefana Broadbent, who runs the customer observatory for Swisscom Innovations and thus spends her days watching just what people do with their PCs. (Sadly, we didn't get to find out how many Polish taxi drivers this actually involved.) "It's all about conversations," Zennström concluded. "That's the vision we have with Skype, to enable the world's conversations."
Are more platforms for Skype on the cards?
With stable versions for Windows and Mac, an ongoing beta for Linux and versions for Windows Mobile/Pocket PC platforms, Skype is already pretty widespread. Windows, predictably, accounts for the bulk of users, but Skype threw a bone to Mac users back in May by introducing call transfer on the Mac version prior to Windows getting it. The main obvious gap is the lack of a version that can work on Symbian phones, even though these represent collectively a much larger potential market than the Windows Mobile field. According to Zennström, test versions have been built by the company. However, the problem is that while Symbian exists as a unified brand, in practice building software that will run on different Symbian hardware platforms is difficult. "There's no backward compatibility between different Symbian versions -- it's very challenging," he said. So Symbian owners probably shouldn't hold their breath.
What else needs to be fixed?
Personally, my biggest objection to Skype is that even at version 3.2, it's still rather inclined to crash at unexpected moments. Zennström, however, is eyeing off slightly more precise goals, particularly in terms of audio and video call quality. "There's a lot of work to do in terms of making the basic quality better," he said. Skype's mobile-aping giant green and red buttons are pretty intuitive, but Zennström also reckons that there could be improvements in that area as well. "We need to make things really simple. We can't just have a product that works fine for us, we need one that's OK for our sisters and our mothers." (Actually, that does imply one feature of the typical Skype user that wasn't discussed earlier: by the sounds of it, they're all men. Female techies, rise up and object!)
And just why did eBay buy Skype?
eBay's purchase of Skype was something of a surprise. Company officials justified the decision at the time by suggesting that integrating the ability to make Skype calls into eBay's auction listings would ensure better communications between buyers and sellers. I don't know about you, but 18 months down the track I still don't often run into listings featuring Skype usernames on eBay. According to Zennström, I may just be looking in the wrong place. "That's been very popular with more complex products, high-priced products and collector's items," he said. In any event, Zennström argues that there were other benefits to the buyout. "There were two reasons for eBay to buy us. One, we're actually a great standalone company. The other opportunity is the synergies between the three companies."
Three companies? Yep, apparently it's the integration between Skype and PayPal (eBay's online payment subsidiary) where the action really is. "We're doing a lot of processing inside PayPal and letting people send money." Zennström said. Whether that needed a multi-billion dollar deal might be debatable, but one of the advantages of being the world's first P2P millionaire is always getting the last word.
Submitted Date: Jul 27, 2007
Source: Australian Personal Computer
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