Microsoft Buys Skype, Illustrates Changes in Access Business

Microsoft has bought Skype for $8.5 billion, in an all cash deal. It is the biggest acquisition in the 36-year history of Microsoft.

Microsoft might would want Skype for a number of reasons. Read more about the deal here: http://www.carrierevolution.com/articles/209963/microsoft-buys-skype/.

A decade ago, one could have found much speculation about the extent to which application providers such as Google, Apple, Microsoft or others might "want to become telephone companies." As it turns out, that was the wrong way to phrase the question. A better way would have been to ask whether firms such as Microsoft, Apple or Google might "want to become communications providers."

Clearly, the answer to that question is "yes." None of them want to be "telephone companies," even though video collaboration, voice communications and messaging have become core features for a mobile device, a mobile operating system, email, social networking and other apps.

But that also should raise new questions. What is a "telco, cable company or mobile service provider," when devices, apps and to a lesser extent operating systems also offer communications features?

As it turns out, the unique role in the application ecosystem for telcos, mobile service providers and cable companies is "access" to the global Internet. That doesn't mean those sorts of firms do not also create and sell apps; they do. Voice, texting and video entertainment are apps created and sold by the access providers.

But as the Microsoft purchase of Skype shows, communication applications can be supplied by any number of entities, so the app function is not the "unique" role. The unique role is "access."

That does not mean access providers are restricted from the applications role, simply to note that apps are not the unique role. That also suggests access providers might in the future find sustainable revenue models that build on that unique access role. And many of those applications logically will grow from the unique access role.

Each contestant also can build on a core "app" competency. For mobile providers, location is obvious. For cable providers, many of which also have become content owners, content is a core "app" competency. For fixed line telecom providers, business services remain an area of key competence.

But as Microsoft's move illustrates, "communication services" no longer are a unique competence for access providers. A key competence, to be sure; simply not a unique and irreplaceable competence.