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Go Big, or Go Home. But Please, Spare Us The Whinging…

For some time there have been rumblings of disatisfaction within the Skype ecosystem.  It just seems as if they won’t go away, either.  The latest broadside is Katie Fehrenbacher’s Is Skype Neglecting Its Developers?

The grumbling comes from developers who feel that Skype isn’t doing enough for them, or that Skype is stealing their features.  Folks like EQO founder Bill Tam, who is unhappy that Skype chose to work with a competitor, or British startup Connectotel, unhappy that Skype built a competing feature, are openly criticizing the company for the quality of their developer program.

The fundamental premise behind an ecosystem strategy is that innovations by others make your own innovations more valuable.  As the vendor, your goal is to position yourself as the platform of choice for launching new and innovative applications in your market. You want lots of developers supporting your product.  Doing so allows you to position your company and product as a platform for innovation, especially amongst the highly influential (and notoriously early adopter) developer community.  You may expect any of these benefits as a result:

  1. Increases the value of your product to existing users
  2. Enables existing and new applications
  3. Unleashes innovation
  4. Creates Buzz amongst customers
  5. Attracts new users
  6. Opens new markets
  7. Reduces churn
  8. Increases ARPU
  9. Creates opportunities to leverage ISV $$ in support of your brand

Clearly there are a lot of benefits to a successful platform play.

So, what makes a good platform play?  A good ecosystem program?

Well, let’s start with developers.  A developer is going to ask five fundamental questions:

  • How big is the opportunity?
  • How easy is it for me to get started?
  • How easy is it for me to participate?
  • How and where do I find the information I need?
  • How long will it take?

These questions translate into working through some or all of the following checklist:

  1. Is there an Extensible platform
    1. published API’s
    2. rich, easy-to-use developer tools
    3. well written, clear and concise documentation with examples including sample code
    4. Developer resources, including support team, knowledge-base, bug reporting and support forums.
  2. Is there an Existing Customer Base ?
    1. How large and approachable is the community of users?  It has to be big enough to provide a realizable revenue opportunity for the developer!
  3. Does this Enable lots of developers ?
    1. No artificial barriers (i.e. $50,000 to join the program )
    2. Are there others? Existing Developers working on parallel, vertical or horizontal applications
  4. Are there mechanisms for monetization? For example, is there a real business in building MySpace widgets?
  5. Are there well defined Opportunities for Co-Marketing, Cross-Marketing, and Cross-Promotion?
  6. Are there any Success Stories?

The Skype program isn’t mature, but it also isn’t the failure that many are claiming.  The biggest gaps are:

  1. The platform isn’t as extensible as it could be.  Key API’s like Call Transfer are still missing.  The outdated COM object model for invoking the Skype client is a hassle to work with.  The fact that every application must invoke the client on the desktop is a constraint which prevents many new kinds of applications from being developed.  The GUI should be separated from the engine.
  2. Mechanisms for monetization are limited. Skype itself gives away features, and monetizes the application primarily through the use of network charges, thus undermining the developer who might wish to charge for product.  Skype needs to steal a page from Google, and find a way for developers to participate in their revenue stream.

Expect Skype’s strategy to mature quickly, however, now that players like AOL are starting to more aggressively build ecosystem plays.

As for the allegations of unfair play, that’s par for the course in the platform game.  By nature, platform vendors are fast followers, and applications developers need to be deep and fast innovators.  If you don’t have sufficient intellectual property, and sufficient depth in your products, then expect that the platform vendor will simply absorb your features in a future release.

Update: Later this evening, after this was posted, I got the following note from Bill Tam…

Hey Alec, I agree with many of your comments about what it takes to have a successful developer program. All developer programs go through a process of evolution and refinement. Skype’s is no exception. There’s no question it’s getting way better and we’ll all benefit from that.

We enjoy a great relationship with Skype and as I’ve mentioned many times before, their API makes it incredibly easy for third party developers like ourselves. We’re the most popular mobile download on Skype’s developer forum and we couldn’t have done that without Skype’s support. There’s absolutely no whining on our part. We are confident that our relationship with Skype will continue to flourish and that there will be opportunities for multiple partnerships..

Bill

I’m very happy to hear that Bill and his team have a good relationship with Skype, and that they view the current situation as nothing more than a growth phase in the Skype ecosystem.  Good on you, guys!

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