Catching Up: Skype CxO’s Speak Out

Over the past couple of weeks, during which I have taken a vacation and then dealt with an internal network issue at my home office, there has been no holiday on news related to the IP Communications space. So this week I will offer a series of posts talking about communications from Skype’s new executive team, about building strong partnerships in an IP-based communications space, about the role of API’s and finally about our mobile-enabled world. Each of the players I reference will have a significant impact on how the world of IP-based communications and real time conversations will evolve. Let’s, however, start with Skype.

Towards the end of June, Skype announced the appointment of Scott Durchslag as Chief Operating Officer, responsible for the day-to-day execution of Skype’s offerings and programs. COO’s are usually not in themselves corporate visionaries but latch on to a vision and ensure that it can be executed to bring a “delightful user experience” while building a profitable business. RIM’s COO for Blackberry, Don Morrison, is an excellent example here1. While RIM co-CEO Jim Balsille sets the business strategy and co-CEO Mike Lazardis builds technology strategy based on his early vision for wireless devices going back to 1992, Don is a seasoned telecom executive who is responsible for building and managing a customer-driven organization worldwide, including the distribution partnerships, carrier relationships, ISV programs and enterprise support programs that have contributed to RIM’s ongoing success. (Full disclosure, Don and I are graduates of the same business school.) RIM also has a COO for Administration and Operations, Dennis Kavelman, responsible for the operations side of RIM’s manufacturing and customer information infrastructure services. While critical to the success of RIM, neither of these COO’s is in the prime spotlight when it comes to discussions about RIM but they are mission critical to making things happen. All this to set the expectations of the role that new Skype COO, Scott Durchslag, is expected to play in ensuring that Skype executes for success.

Scott was recently interviewed by Harold Wolinsky on what message he has for current customers and what got him excited enough to want to join Skype in this role:

  • The remarkable team at Skype and what they have developed to date
  • The current climate where not only global warming but also rising gas prices are causing us to rethink when we have to travel and how we communicate with both our friends and our business colleagues
  • The paradigm shift in communications from hardware to software. “Software owns the future in communications”. (Thus, my forthcoming post about the API discussions raging on the blogosphere.)
  • The untapped revenue potential where Skype currently is running at a (profitable) $500 million annual run rate in a multi-trillion dollar market space.

His message for the developer community (in an era where both Apple and RIM have set new, but different, business models for delivering third party applications to the consumer and enterprise respectively):

If there is one thing I have learned about developers from my experience in mobile, it’s that they are at the absolute cutting edge of what can be done. Some of things we never think of are invented by some young developer trying to create cool things for himself and his friends. You really want to be able to make it as easy as possible and as economically rewarding as possible for those folks to be innovating around your product.

The interview goes on to discuss his message for Skype employees and where Skype goes next. Read it for the details.

At this point, Scott’s challenge amounts to demonstrating execution — not only through innovation in software but also in structuring and executing on compelling partner programs that drive third party innovation as well as delivering more effective support programs that “delight the user”. But the most crying need is to create broader market awareness of the potential for IP-based communications through integrating the rollout of the innovative software technology with more effective marketing practices. Communicating effectively to Skype’s user base and target audience along with rebuilding once again the viral enthusiasm that lead to Skype’s initial market acceptance and deployment have to be the key goals here. Individually each of these goals is a challenge but also Scott will be measured by how well he can coordinate these activities such that Skype breaks down the disconnects that have occurred in the past between engineering, marketing and business development. Scott may have had success at Motorola with the RAZR (but where Motorola did not invest in future development); the question today is can he bring his experience at Motorola and elsewhere to build Skype’s ongoing, sustainable success?

And the bottom line for both Josh and Skype will be whether they can build enough value into Skype over the next twelve to eighteen months to either make Skype either a major profitable eBay business unit or an attractive acquisition by a third party at a reasonable profit relative to eBay’s past investments in Skype.

1RIM Executive Team Bios

About Jim Courtney

Bringing over thirty years' experience in the sales, marketing and management of cutting edge technology businesses.

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