Skype’s Secret Sauce Extended to Include Embedded Devices

The secret sauce used by Skype that results in the excellent voice quality of Skype-to-Skype calls and facilitates quality in Skype-to-SkypeIn/Out calls is the Voice Engine for PC and Voice Engine for (Windows) Mobile licensed by Skype from Global IP Sound (“GIPS”). Combining codecs, echo cancellation technology and other voice and packet management features the various GIPS Voice Engines eliminate or minimize the impact of inherent (wired or WiFi) network problems and deficiencies introduced by factors such as delay, jitter, packet loss, clock-drift, acoustic and network echo.

In a press release last Monday, Global IP Sound announced the extension of this relationship to include Skype’s licensing of Voice Engine for Embedded such that the GIPS features and technology can be deployed in voice-enabled hardware devices. In an interview with Wendy Toth, VP Marketing, and Dr. Jan Linden, VP Engineering at GIPS, we learned:

  • This agreement will permit the incorporation of GIPS Voice Engine technology into future WiFi phone offerings. (It is not included in the recently released WiFi phones announce last month.)
  • It would facilitate the offering of a Skype for Symbian phones (such as Nokia’s N-Series) although no such client has yet been announced by Skype.
  • In July Skype/eBay and GIPS resolved the patent dispute that Skype effectively assumed upon Skype’s acquisition of Sonorit and Camino Networks.

Eleven years ago I had been close to the scene when Microsoft did an original one-time licensing of the Spyglass Mosaic web browser that formed the core of the original Internet Explorer; Spyglass then went out of business within the following year as they had no sustainable revenue stream. I asked Wendy what was different about the GIPS business model such as to sustain and grow their revenues, given that Skype has licensed GIPS but has no ongoing revenue base for basic Skype calls. She responded:

  • GIPS has developed a business model that relies on both initial one-time and ongoing usage revenues.
  • GIPS has built up a diversified customer base such that GIPS’s success is not significantly dependent on their Skype relationship.
  • GIPS has set the bar for voice quality through their unique overall methodology for voice processing, incorporating echo cancellation and their proprietary codecs.

Other questions we posed to Wendy and Jan:

  • What is the status of Global IP Sound’s video technology which was demonstrated at Fall VON last year? Effectively they have extended their Voice Engine into a Multimedia version that incorporates video technology. The initial licensee of Voice Engine Multimedia is AOL. To date there has been no licensing by Skype but she would not reveal whether there were any negotiations to extend Skype’s license to include Voice Engine Multimedia.
  • Where do you see the real push or pull for compatible hardware devices? Dual mode WiFi handsets and compatible ATA devices.
  • What is the most significant trend you have seen in the past year? Asia is a market that is growing much faster than our North American and European markets. Of particular note are Korea and India.
  • Where do you see the market in three years? We will see VoIP go away as a term as it becomes transparent to all voice communications infrastructure. On the other hand it will impact how we communicate as new voice applications evolve. GIPS will be a player anywhere there is voice processing on the network. As an example, have a look at GIPS Border Interface Engine, bringing GIPS technology to the carrier market at the VoIP/PSTN gateway.

In summary:

  • Expect to see new Skype-Certified hardware incorporating GIPS Voice Engine Embedded in the not too distant future.
  • Given that their relationship has matured to the point where they can quietly resolve potentially divisive issues such as the patent dispute, the GIPS-Skype relationship that is a key element contributing to Skype’s success has become much stronger.
  • Going forward GIPS will be a player in the VoIP communications ecosystem at the client, device, network and carrier level .
  • Question: Will Skype take advantage of other GIPS Voice Engine technology to provide improved video as well as a Symbian Skype client?

About Jim Courtney

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

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