SKYPE case study
1. Describe the environment in which Skype competes based on the three characteristics of high-tech markets (Chapter 1).
Like most Hi-Tech products, Skype also has to deal with the three major uncertainties in the form of Market Uncertainty, Technological Uncertainty and Competitive Volatility.
Market Uncertainty-(1) While Skype has a huge user base by now, there are still many people who are uncomfortable about using Skype due to security and quality concerns.
(2)Due to proliferation of social networking sites like Facebook, and instant messaging services like Watsapp, many people do not feel the need to make a call through Skype unless absolutely necessary.
Technological Uncertainty-(1) Skype’s peer to peer proprietary technology restricts people from using Skype unless people on both sides of the communication channel are online via Skype.
(2)Past cases of system blackout due to Microsoft upgrade had caused a huge problem with users doubting Skype’s Technology.
Competitive volatility: Skype is now facing competition from a large number of VoIP operators (such as VSee, Viber, Google Hangout) as well as non-VoIP operators (like FaceTime). Skype needs to evolve its model f it has to keep up with changing trends.(details in answer 9)
2. Given the technological uncertainty present in the VoIP mobile market, would Skype be likely to emerge as the leader? Explain your reasoning.
Some facts:
Skype’s revenue in 2013 had grown up to USD 2 billion (compared to 800 million in 2013 and only a mere 71.8 million in 2005)
Skype International call market share (including traditional carrier based services and other VoIP services), had risen to 33%.
Given the above facts and figures, it looks like Skype is here to stay. Skype also has the “early mover” advantage- so much so that “Skyping” has become a common terminology to refer to VoIP based Video calling in general(at least in India).
Nonetheless, Skype does face a threat from other VoIP
Like most Hi-Tech products, Skype also has to deal with the three major uncertainties in the form of Market Uncertainty, Technological Uncertainty and Competitive Volatility.
Market Uncertainty-(1) While Skype has a huge user base by now, there are still many people who are uncomfortable about using Skype due to security and quality concerns.
(2)Due to proliferation of social networking sites like Facebook, and instant messaging services like Watsapp, many people do not feel the need to make a call through Skype unless absolutely necessary.
Technological Uncertainty-(1) Skype’s peer to peer proprietary technology restricts people from using Skype unless people on both sides of the communication channel are online via Skype.
(2)Past cases of system blackout due to Microsoft upgrade had caused a huge problem with users doubting Skype’s Technology.
Competitive volatility: Skype is now facing competition from a large number of VoIP operators (such as VSee, Viber, Google Hangout) as well as non-VoIP operators (like FaceTime). Skype needs to evolve its model f it has to keep up with changing trends.(details in answer 9)
2. Given the technological uncertainty present in the VoIP mobile market, would Skype be likely to emerge as the leader? Explain your reasoning.
Some facts:
Skype’s revenue in 2013 had grown up to USD 2 billion (compared to 800 million in 2013 and only a mere 71.8 million in 2005)
Skype International call market share (including traditional carrier based services and other VoIP services), had risen to 33%.
Given the above facts and figures, it looks like Skype is here to stay. Skype also has the “early mover” advantage- so much so that “Skyping” has become a common terminology to refer to VoIP based Video calling in general(at least in India).
Nonetheless, Skype does face a threat from other VoIP
References: [1] http://en.wikipedia.org/wiki/Skype [2] http://blogs.skype.com/ [3] http://www.reportlinker.com/ci02085/Voip.html [4] http://point-topic.com/wp-content/uploads/2013/02/Point-Topic-Global-VoIP-Statistics-Q1-2013.pdf