The Call 4 - 4/19/2004
From Michael Robertson, CEO and founder,
SIPphone.com
" Skype is perhaps the most over-hyped technology since PointCast. I even had a top technology CEO state that Skype would rule the telecom world. I was shocked at this assessment and when I prodded him for his rationale I was further shocked at the unfactual basis of his belief. Skype has received an avalanche of free press, but much of the information being distributed is either wrong or only half the story. Let me refute many of the Skype myths today and point out why it has no chance competing with the open standard SIP. "
Skype is so popular - it already has millions of users.
Skype claims to have millions of downloads, but it's not clear that translates into actual usage. There's no indication that those downloads turn into active callers. It's similar to when web sites talking about how many "hits" they get which have no correlation to actual visitors or web pages viewed. A quick search for users in their directory show only a tiny fraction - perhaps less than 1% are using their system. It would be nice if Skype showed actual calls per day which would be a much better measure. In one recent article they referenced 30,000 per day.
Skype can call regular phones.
Skype cannot call or receive calls from phones on the PSTN (the traditional phone system). I'm sure Skype wishes they could do this because they see the tiny % of people who actually use Skype on a regular basis. But currently Skypers can only call people sitting in front of a computer which is extremely limiting when compared to SIP minutes.
SIPphone users get the best of both worlds because they can call any phone in the world today and of course people sitting in front of a computer as well. This inter-connection with the PSTN is possible because SIP is an open standard. Open standards excel in connectivity because any company can write a product with a reasonable degree of confidence that it will inter-operate with others. There are many links in the chain needed to make SIP calls to the PSTN possible (end device, server, telephone switch, etc). At SIPphone we rely on different vendors for each piece and they all work together. Skype has chosen the proprietary path which means they must build each piece or commercially motivate a company to do so.
Think MP3 vs. Real Audio as an analogy. You had the entire tech world building MP3 devices and Real Networks could not keep up with the pace of development and eventually succumbed to the open standard. In spite of the fact that Real Networks had a giant lead. (Skype has no such lead.)
Skype's point to point system is better than a centralized system because it is more efficient.
Skype calls are point to point, but so are SIP calls. SIP voice traffic flows directly between callers so there is no advantage for Skype and in fact SIP has been doing point to point calls long before Skype since it was built into the original standard specification.
Skype is better because it's a pure P2P system from the inventors of Kazaa.
Pure P2P systems might have an advantage when attempting to circumvent copyright laws - at least until the police finally show up and kick down the doors like they did at the Kazaa headquarters. But a pure P2P system has enormous limitations making it unsuitable for an always-on communication method. Since the system only knows about you when your computer is turned on and connected to the net anytime you are not online it is as if you do not exist. A good voice communication system should be able to take voice mail for you, forward your call to another location or handle calls in a way you desire even if your computer happens to be off.
A pure P2P system can't do this - while these are already features at SIPphone. The SIPphone system can take voicemail when you're absent and send them via email for when you return. It can multi-ring three locations, it can even forward calls from one number to another. These features are all made possible by having centralized directory. It is a good idea for call traffic to be point to point, but you want a centralized directory to manage call routing. Without that you have a randomly used system which cannot reliably be used for business or personal communication.
Skype has software for PCs and PDAs.
Skype only has software for PCs running Microsoft Windows and PocketPC. SIP on the other hand supports virtually every computing platform today including Macs, PCs, and Linux computers as well as software for Palm and WinCE devices. The choices range from commercially supported programs to open source with a much wider range of platforms and features supported from literally hundreds of companies and thousands of developers. Skype will never catch up to SIP in software offerings because it is a proprietary system.
Skype voice quality is superior.
Skype uses a codec (voice compression software) called ilbc which is already in SIP software implementations. In fact, SIP is far superior because it has a negotiation feature which allow 2 devices to exchange information about the compression formats they support and select the optimum one. Skype has no such negotiation capability.
Skype is working on physical phones.
Plugging in a headphone to your computer is a nasty, under the desk, activity which only hard core geeks will do. The rest of the world wants a dedicated phone - like the ones they are already familiar with. Nobody wants a phone call dropped or missed because you had to restart Microsoft Windows. Skype is talking about how they'd like to be able to offer a physical phone but nothing exists yet.
Meanwhile more than 3 million SIP phones have already been sold. Today users can buy a business or consumer phone, adapters (which can be used with a cordless phone), routers (which have a SIP port already built-in) and many other SIP devices. These units can be plugged in directly to the internet and be used to place and receive SIP calls. Skype will never be able to catch up to the wide range of hardware already available for SIP ranging in prices from $50 to hundreds of dollars. In addition, there's phenomenal SIP technology coming out of labs around the world. Nokia is showing a new wireless phone that will do SIP and we'll soon be selling incredible video phones at SIPphone. I should stress that all these devices work together because they're all based on the SIP standard.
Can Skype succeed?
Skype is good software, cleverly marketed and even has a catchy name, but that is not enough to overcome its biggest flaw. It is closed technology trying to become the standard used by an entire industry. If Skype wishes to compete with SIP, they must publish their specifications to allow interoperability with other devices. They should also publish the source code to their product so it can be ported to more platforms and others can build upon it. These are very unlikely directions for Skype to travel since they have started down the traditional closed path.
It's true that Skype has raised over 20MM from VCs. That's a tiny fraction of the collective investment that hundreds of companies are making in SIP based software, hardware and services. Everyday SIP is widening its lead in technology and users. I'm sure the Skype team is a smart bunch of guys, but at the end of the day it becomes a classic open standard vs proprietary battle. Always bet on the open standard. Bet on SIP.
To discuss this topic or other realted topics, please visit our new SIPphone Forum.
Michael Robertson
CEO and Founder
SIPphone.com
