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Detente in IM's Cold War?

  • Skype protocol cracked. By the end of this month it seems that we may have the ability to interoperate with the Skype network without needing… Skype. That opens up the possibilities for Skype PBXs, Skype CRMs, and so on.  Big news!
  • Yahoo / MSN Federate, creating a massive IM cloud, bigger than anything else on the planet.  It sucks that they aren’t opening this up further, but it’s a first step.
  • GTalk is the dog of IM systems. With just 3.4 million users, who really gives a damn what they do?

Big news.  Tectonic plates are in motion.

We all believe that the future holds a common presence cloud, the same way that today there is a common dial-tone standard.  Indeed, presence has been referred to as the next dial-tone.  However, the unified presence cloud, while a nice concept, isn’t anything that the big players are really that interested in enabling.

It’s not a technology problem.  Microsoft’s LCS team has successfully federated all of the major technology networks — you can download the interop spec. Moreover, there is an IETF draft which contemplates this interop also.

The problem is the business of IM.  It monetizes eyeballs. Walled gardens are a nice proprietary lock-in, which keeps the eyeballs from straying too far.  In fact, yesterday I had two pretty stark confirmations of that. When asked what providers should do if they wanted to federate with the MSN cloud, Don Dodge replied in the comment stream on his blog as follows:

Blake Irving is in charge at Microsoft and Brad Garlinghouse is the contact at Yahoo. Earthlink, or any other IM company should contact them for details.

Go talk to the man.  Kiss the ring!

Privately, another individual, writing about LCS, said:

The big public cloud folks all require business deals to federate. They have also been reluctant to federate among themselves up till this Yahoo-MSN link. But this is only one link out of three. The specs show how LCS federates with MSN (and Yahoo and AOL) but the public clouds allowing such a connection is up to them.  They all have deals with various other IM providers. For example AOL offers federation to IBM ( with Sametime) and Jabber customers in addition to LCS customers.

So, we, as consumers and developers, are pawns in a turf war between entrenched interests.  It’s IM’s cold war.  Left to their own devices, the blocs in charge of the controlled economies of Soviet IM-istan will present us with a “unified” network which is more akin to the old Bell model, than anything represented by the values of the internet.  The one player, Google, who has been open, has displayed such ineptitude at marketing their platform that nobody cares.  XMPP, while technically interesting, has no momentum.  Tieing GTalk to the XMPP platform was a poor choice.

It’s getting to the point that some, like Stowe Boyd, are calling for a regulator to step in.

Enter Skype. Or, at least, their chinese hackers.

Phil Wolff writes that Skype could choose any of these strategies:

Open. They’re already on the path to opening up more of their apps at the API level. Skype could embrace this at the protocol level too. This is the hardest thing to do, but may pay off in the long run. Exposing these protocols is the only way for the Skype network to become an industry standard. And it would put Skype in a position of leadership the way Microsoft is for dot net, Sun is for Java, and Adobe is for Flash.

Switch. Skype could change the protocols, breaking the new software. This is a costly and temporary solution; tricky but doable. Replacing Skype clients for updates is hard enough; getting everyone to migrate could kill the brand love. It won’t be long until the Chinese engineers figure out how to get in again.

Quash. Skype might try to blow out the startup’s fire. eBay has a powerful combination of PR, lobbyists, litigators, and business allies. Even in China. Skype could try to accuse the startup of piracy. My guess is Skype will tread litely. These tactics rarely work in China and often tarnish the reputation of the outsider applying the pressure.

Ignore. Skype has enough to do. Wait and see.

Invest. Buy the team, put them to work.

Yup.  However, Phil, the only real option is to open up. Skype should take a leadership position in publishing those protocols, and encourage others to build upon them.  The Skype client becomes the first, and possibly the best, way to use the Skype protocol, but not the only way.

Moreover, it could work for Skype. Today, unlike Google Talk, Skype has brand, momentum, a large customer base, and an active ecosystem of partners.  These are the ingredients for a successful platform play.  Unlike the dominant players, Skype makes their money from traffic across network bridges, from applications partnerships (like TellMe), and from downloadable add-on’s to the application.  They are much less dependent on monetizing eyeballs than AOL, MSN, or Yahoo.  There wouldn’t be the tension between their existing business model and a platform model which AOL, MSN, and Yahoo have to contend with.  As the incumbents, AOL, MSN and Yahoo would be victims of the Innovators Dilemma.  Skype would be the disruptor.

How about it, Niklas?  Let’s see a bold move by Skype. You can change the balance of power in IM’s cold war, dramatically.  How about if Skype published the protocol, convened an advisory group of their best customers, developers and users, and committed to submit the protocol to a standards process?

Would SIP survive?  Who knows.  But we, consumers and developers, would all benefit.

{ 8 comments… add one }

  • Charlie Paglee July 14, 2006, 8:36 am

    All of this conjecture is very interesting, but I think we will have to wait for two weeks. This morning a reporter told me that Skype has denied that this is even possible. I think it is going to take a little while before they believe / realize that this is real.

    I personally think that Skype may end up buying this company in order to hire this fantastic group of engineers. But the moment they do this they send a message out to every other hacker in Cyberspace: hack Skype and earn big bucks. So in the end they may also end up opening their protocol.

  • Alec July 14, 2006, 9:12 am

    It will certainly be interesting to see what they do over the next few weeks. I think this is a huge opportunity.

  • Rick July 15, 2006, 8:14 pm

    Alec, aren't you contradicting your entire argument for openness when criticize Google for using XMPP, an IETF open standard.

    Skype has brand name and Google doesn't? Why didn't Nokia select Skype instead of Google for the 770? I don't understand you're comments.

  • Julian Bond July 15, 2006, 11:11 pm

    Let's be careful here that we're comparing apples and not apples with oranges. Some of this is to do with voice, some video, some chat and some presence.

    – The MSN-YM! linkup is chat only.

    – GTalk and LibJingle opened up the possibility of voice interop between GTalk, Jabber, AIM, iChat, Trillian, Gaim. But we're still waiting for any real code. In the 9 months since the announcement, Skype have shipped several point releases, numerous bug fixes and several major enhancements. The winner in this game is going to be the one that consistently ships early, ships often and keeps innovating. The only one of all the players who seem to be able to do this is Skype.

    – MSN-YM! are claiming 350M accounts. Using the same methods of counting, Skype is somewhere between 50 and 100M. The only player in this game being reasonably honest about numbers is Skype with their members online figure.

  • Anonymous July 15, 2006, 11:53 pm

    If LCS and SIMPLE are the building blocks for fedaration, then we're screwed. SIMPLE is anything but simple, a mess of a protocol where no two implementations seem capable of anything more than very basic presence and message exchange. XMPP is the only protocol with proven federation and interop, and events like the livejournal.com launch with XMPP prove that it does have momentum. Guess we'll see what happens. :)

  • Alec July 16, 2006, 6:31 pm

    Rick – I tend to take a pretty pragmatic view to standards. They are useful so long as deployed in sufficient numbers that developers want to target them. XMPP is definitely a standard, but it's got a very small following. Hence, my call for Skype to standardize their protocol (which has a large following).

  • Alec July 16, 2006, 6:32 pm

    Agreed Julian. Apples are very easy to confuse with Oranges in this environment.

  • rajiv August 17, 2006, 11:22 pm

    Respected Sir,

    If you check gtalk messages through ethereal software, It will not show u actual message body
    ,or all XMMP headers, tags. Now gtalk messenger is sending messages in a encrypted format for new
    versions of gtalk messenger.
    Please let me know if anyone of u knows, which encryption method gtalk is using.

    I m not sure that they r encrypting messages, may b they r using diff protocol or dif messages format.But it sends messages to goowy messenger in xmmp format. means u can see the messagees sent to goowy, through the ethereal software.
    Please give me information about, what changes they have made to gtalk messenger,
    which encryption method they r using..

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