A few weeks back, I commented that even though Shirky correctly states that VoIP is a product and not a service, he nonetheless considers Vonage to be a success. Well, a few days back he recognized that “Vonage and a number of the other VoIP startups present themselves to the customer as phone companies, emulating the incumbents they are challenging.” He calls this “Plan A”, that is aiming to "replace the phone system slowly and from within." He identifies Skype and other IM clients that let users talk as having a more radical plan of "replac[ing] the phone system. Period." This is “Plan B”. But these are not products; they are also service providers. It is true that their services are currently free. But their architectures require network resources. IM based service providers have deployed servers and the voice traffic goes through them. Recently I read a quote from one of them (unfortunately I am not able to locate it now) that they are not publicizing voice chat capability because of this. Skype requires Supernodes in the public Internet. As more and more people subscribe to broadband and use home-based routers, the fraction of Skype subscribers who could act as Supernodes will diminish. Already in countries like Australia where bandwidth consumption is tracked, people are complaining about being a Supernode. That means, Skype has to deploy their own Supernodes, thereby exposing the fact that Skype is a service. So the search for a product continues.
Posted by aswath at March 1, 2004 06:10 PM