Monday, 1 November 2010

Cloud Computing and Video Conferencing: What's Next

One of the most interesting areas in technology these days is telephony, with all its flavors: voice, video, and video conferencing. And, as far as we've come, we're about to see another wave of innovation in the space.
Not only is cloud computing the mode by which these services are delivered, but also, the way they're morphing gives us clues about what it going to happen to cloud computing itself.

Let me begin by sharing an experience that illustrates just how far we've come and how fast the journey has been. Ten years ago I was on the phone with AT&T sorting out something about our service, when the rep said "I notice you make a lot of calls overseas. If you signed up for our international calling plan, your per-minute costs would go from $1.50 to $.11."

That's when I knew a revolution was occurring. When a vendor offers a way for you to save 90% on the cost of its service to you, an enormous marketplace shift is underway.

Today, I routinely make Skype video calls overseas at no charge beyond my basic Internet connectivity. By the way, the quality of the calls is far better than the landline equivalent. Imagine that: Great quality. Video. Delivered for free.

And, by the way, a few years ago, when I first started using Skype, I found a lot of people inside businesses were reluctant to use it; they seemed to regard it as "personal," or "consumer-grade." Today, that reluctance has disappeared. Indeed, over the past year I've noticed that people seem to prefer Skype to regular telephony, viewing the opportunity to do video calls as providing a superior communication mode.
So I was very interested in some developments over the past few weeks.

First, Google has integrated Google Voice into its e-mail client. Motley Fool discussed this at length and speculated on its effect upon Skype. Essentially, this boils down to "can Google Voice attract users away from Skype?"

Second, speculation mounted that Cisco might buy Skype before its upcoming IPO. Techcrunch discussed this possibility here.

And then Cisco launched its own personal videoconferencing service, Umi, designed to offer higher-quality video. Of course, many people noted that its $500+ equipment purchase price, along with a $25 per month fee, might make it more suitable for small businesses rather than individuals or families.

The Big Market Shift

To me, these developments dramatically illustrate the impact of digitization and monopoly markets.

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