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Story URL: http://www.silicon.com/research/specialreports/voip/0,3800004463,39128799,00.htm

The Skype ecosystem: A labour of love
Will third-party developers take Skype to the next level?

By Sylvia Carr

Published: Friday 18 March 2005

The popular VoIP tool Skype has spawned not only a community of loyal users but a cottage industry of software and hardware products that are adding to its appeal. Sylvia Carr reports.

What started as a casual interest in a new voice-over-IP application has become a website that's tracking a growing phenomenon surrounding one of today's biggest brand names online.

The site is SummitCircle.com. The VoIP app is - what else? - Skype. And that phenomenon? A cottage industry that's grown up around Skype of software add-ons, hardware and services for the voice communications tool.

Louis Philip (a pseudonym under which he runs the SummitCircle site) first heard about Skype in the summer of 2004 and was impressed the company was using peer-to-peer technology for telecommunications - and that the number of Skype users was growing so fast. He thought it could be the start of something big.

By the autumn of 2004 he'd collected quite a few links to Skype sites and related products and at the same time was looking for a project to give him some hands-on experience in marketing. As opposed to taking a university course, he started SummitCircle.com - a site with which Louis says he wants "to always have one single, simple focus - give users a place to go to find information about Skype phones, add-ons and communities".

The site now boasts links to 150 different products and communities with around five new ones added each week. The range is impressive - as are the new capabilities they give the VoIP app. There are software add-ons that give Skype voicemail (a feature Skype itself is now beta-testing) and integrate Skype with email programs such as Microsoft Outlook. There are phones you plug into a computer so you don't need a headset and adapters to allow you to use a standard phone with Skype. The community aspect shows up with sites where you can find others to chat with in foreign languages or directories of businesses you can contact with Skype.

SummitCircle is also an information hub with links to Skype-related articles and news. "I want to not only provide the most comprehensive and well organised listing of Skype related products and communities, I also want to do find the newest sites for my users," Louis explains.

Since Louis launched SummitCircle last December, the number of Skype products has mushroomed - at a rate that surprised him and much of the industry - so that now he relies on his readers for help. They submit sites and product descriptions which he reviews for accuracy before they are published; they also rate the quality of links with a '5-star' system. "In the future I would hope that the community can create much of the content," he says.

The creation of this Skype 'ecosystem', which bears a resemblance to the environment surrounding Apple's iPod both in the availability of third-party products and in the fanaticism of the community, is no accident. In November 2004 Skype released the API for its application to encourage just this sort of activity.

Skype CEO Niklas Zennstrom told silicon.com: "What we want to do is create an ecosystem around Skype. We believe we can focus on the core of Skype, the communications and IM and so forth, and what we want to do is encourage third parties to either do standalone utilities or to also integrate Skype into other software apps. By integrating Skype into Outlook or a PIM or ERP [application] or any kind of groupware you get a much better user experience."

The fact that one of the most popular add-ons is voicemail - a feature Skype is itself developing in beta and hopes to charge for - doesn't concern Zennstrom. "I think it's good people get more choices," he says.

Thus far this appears to be the mantra for Skype with regards to making money - do what's good for the users and that will wind up good for the company. Skype gives away its software for free but charges for its SkypeOut service - which lets users call standard telephone calls - and its new SkypeIn service - which gives users a phone number others can reach them at. It also plans to charge for features such as voicemail and for a Skype for Business offering which is due out later this year.

James Enck, European telecom analyst at Daiwa Securities SMBC Europe, said: "If there is an endgame [for Skype] it needs to be in building a huge user community and being a gateway to people who want to tap into it and make money from it." (continued on next page...)