Microsoft’s Skype Could Cost Jobs and Healthcare, Experts Say
Microsoft’s Skype Could Cost Jobs and Healthcare, Experts Say by UCStrategies Staff
Cisco warned that Skype, now acquired by Microsoft, would mean the loss of jobs and health care, as well as end Cisco’s sway in the videoconferencing business.
Two prominent professors in economics caution about the dangers of nonstandard communications software like Skype. Michael Katz, professor at the University of California, Berkeley, and Bryan Keating, Stanford-schooled economist, contend that the government should perform precautionary measures and make Microsoft turn Skype to be compatible with other products.
Otherwise, Cisco warned, Skype users could end up not having job training and health care.
The rationale: Skype is dependent on proprietary standards, meaning it can prevent its over 600 million users from calling non-Skype users. This also hinders businesses from reaching Skype users via remote video systems that deliver health care and job training.
The 43-page paper by Katz and Keating said that Skype does not support Cisco’s audio and video standards. The two economists also pointed out that Cisco could also pursue the same strategy – turn their products to be incompatible with Microsoft’s Skype.
Katz and Keating wrote: “A firm like Microsoft (and to a lesser extent Cisco) is therefore exactly the type of firm that might prefer incompatibility with products made by other firms... For example, to the extent that Skype uses protocols that do not interoperate with video-conferencing products based on industry standards, enterprise customers may find it necessary to use Microsoft video-conferencing products in order to access Skype’s 200 million active users.”
According to Brian Riggs, research director at Current Analysis, a firm that performs analysis on the telecom market, Cisco had a point. He said that Skype had not been friendly to standards and interoperability. But Riggs also pointed out that Cisco failed to make an “apples-to-apples” comparison in its criticism of Skype, because Skype is very different from what Cisco offers.
The fact is, many enterprises would gladly drop Cisco in favor of the less expensive Skype.
Microsoft could certainly keep Skype from being compatible with Cisco’s products. That way, the company can sell more Skype subscriptions and licenses to Microsoft Lync, its enterprise communications software.
But Cisco is seen to be exaggerating as Skype can actually be made to work with Cisco’s TelePresence systems. There are services that enterprises can buy that will work with both Skype and Cisco’s TelePresence. For instance, there’s Skype Connect and third-party connection services such as Blue Jeans Network.
It would be interesting to note that this was not the first time Cisco had protested against Skype. In 2010, Skype poached Tony Bates, a former Cisco executive, to become its CEO. In 2011, Bates then proceeded to sell Skype to Microsoft. In response, Cisco filed a complaint with the European Commission (EC) to block the $8.5 billion acquisition of Skype. But the European Commission approved the deal without conditions. And even though the deal had already closed, Cisco filed another complaint with the EC in February. (KOM) Link.