Skype Now Available from Inside Outlook.com

Skype for Outlook.com is now fully available in the United Kingdom, Germany, Brazil, France, Canada and the United States. 

Outlook.com, which already allows Outlook users to connect with Facebook, Skype, and Google friends, now allows users to make Skype video calls directly from inside Outlook.com.

With Microsoft also making Skype part of the Windows operating system, we now have reached a point where users might just expect to be able to communicate using voice, video and text, from inside their mail apps and when using Windows PC devices. 

That trend has been developing for years, with communications becoming part of other apps, and over the top messaging apps proliferating. 

But such capabilities also illustrate why communications service providers are so intent on creating new revenue streams. They have to. 

10 Firms Win Parts of $10 Billion U.S. Interior Dept. Cloud Computing Contract

Verizon is among 10 firms supplying portions of a $10 billion 10-year contract for cloud services to be used by the U.S. Department of the Interior.

Cloud-based storage, secure file transfer, virtual machine, and database, web, and development and test services projects are among the functions and services the Department of Interior purchased.

AT&T, IBM, Lockheed Martin, Unisys, CGI Group, Aquilent, Smartronix, Autonomic Resources and Global Technology Resources got parts of the contract as well.

IBM says it won $1 billion, the largest contract it ever has gotten from the federal government for cloud-related services.

As always, the contracts might best be described as representing a “maximum of $1 billion” for IBM, since the actual value will hinge on how fast the projects can be implemented.

Amazon earlier in 2013 won a $400 million, four year deal to provider services to the Central Intelligence Agency.

The bids do not settle the issue of who the dominant suppliers ultimately will prove to be in the U.S. market, since the market is just beginning in earnest.

Nor do the bids definitively answer the question of how much success major U.S. telcos will ultimately have in the cloud services market, and how far their success could extend beyond transport services.

How Big a Phone Will You Carry All the Time?

How big a device will you carry with you, all the time, like you carry a mobile phone? Samsung Mega is going to provide some real-world testing, as AT&T, Sprint and US Cellular introduce the phablet this fall.

The 6.3-inch display on the Mega creeps closer to the crossover point between the smallest tablets and the biggest phone, and might be a test of whether a single device can replace the phone and the tablet.

Lots of people might not want to make such a choice, just as many people use PCs, tablets and smart phones, with each device used in distinct ways.

On the other hand, it still isn’t clear what percentage of on the go users might actually prefer a phone that has a screen large enough to replicate many of the functions a tablet might, under other circumstances, provide.

If you have used a Samsung Note, with a 5.5-inch screen, the move to a 6.3-inch device is somewhat incremental.

Where a Galaxy 3 or Galaxy 4 will fit in some cargo pockets, a Note really does not. Some of us have not found that a barrier to using a Note as a full-time phone.

The issue is how a pants pocket-sized 6.3-inch device will be received. The answer probably will be that for some users the Mega is a fine choice, giving many of the advantages of a small tablet without the need to carry one.

Others will probably find that is useful when fully mobile, but that a tablet gets used when a person is at home or other places where mobile support is not needed.

Perhaps the story here might turn out to be that “one size does not fit all,” giving Samsung a chance to create a new market segment (on the assumption that a phablet does not displace the tablet market, but represents a segment for mobile devices).

China Aims for 50 Mbps in Cities by 2020

The Chinese government now has a target of nationwide broadband coverage by 2020, and plans to rely heavily on mobile networks to achieve that goal in rural areas, while urban areas could see gigabit networks, even if the nearer-term bandwidth targets could likely focus on Wi-Fi coverage in key public urban areas by 2013 and fixed broadband coverage for 50 percent of all households by 2015.

50 Mbps is a stated objective for urban areas.

Cloud Computing Nears "Trough of Disillusionment"

Cloud computing is nearing a point where many observers or users are destined to become more disillusioned. And that will be a good thing. The reason cloud computing disillusionment will be a good thing is that such disillusionment, the end of overly-inflated expectations, is a normal part of the adoption cycle for most important technologies.

Only after the hype has worn off, and expectations are aligned with a better understanding of how value is generated, do major new innovations actually reach a stage where they routinely are used, and routinely generate value. 

Cloud computing has moved well past the peak of the hype cycle and is positioned near the bottom of the “trough,” a position Gartner might say shows cloud computing is largely past the stage of inflated expectations.

Cloud computing is not yet a standard technology delivering well-understood value. That still lies ahead.

By way of comparison, “big data” is almost at the peak of inflated expectations while the Internet of Things hype still is building.

Near field communications, a technology mobile service providers are hoping will prove vital for mobile-enabled commerce, the Isis and other mobile wallet services, still is on the back side of the hype curve, indicating it will yet be some time before the inflated expectations are wrung out.

The good news for supporters of cloud computing and NFC is that although there should be a further period where disillusionment is significant with both technologies, the period of useful adoption will follow next, with clear-eyed understanding of where value lies.

But that still will be a process of years, not months. Its supporters, while desiring faster progress, probably also recognize cloud computing is part of a larger transition of computing architecture that also includes embedded and highly distributed computing modes. 

Something that complex will displace existing ways of doing things, but it will take a while.

The “evolving relationship between humans and machines” is the way Gartner has chosen to organize the latest version of its “Hype Cycle for Emerging Technologies.”

That shows the generally heightened hype around smart machines, cognitive computing and the Internet of Things, or machine-to-machine communications. In the telecommunications business, that hype is seen in the attention now paid to connected car systems, home security and sensor networks of all sorts in the energy business.

Gartner's hype cycle reports are intended to  provide strategists and planners with an assessment of the maturity, business benefit and future direction of more than 2,000 technologies.

New hype cycles this year include content and social analytics, embedded software and systems, consumer market research, open banking, banking operations innovation, and information and communication technology (ICT) in Africa.

"In making the overriding theme of this year's hype cycle the evolving relationship between humans and machines, we encourage enterprises to look beyond the narrow perspective that only sees a future in which machines and computers replace humans,” said Jackie Fenn, Gartner VP and fellow.

Three trends are at work, Fenn notes. Technology such as wearable computing devices augment humans. In other cases, machines replacing humans.

A virtual assistant acting as an automated customer representative provides one example of that second trend.

The third trend is humans and machines working alongside each other, said Fenn.

Hype Cycle for Emerging Technologies, 2013

Alteva, Frontier, Windstream Show Transformation Success, and Limits of the Strategy

Alteva is not alone among rural telcos by embracing a growth strategy built on business customers, rather than consumers. Windstream and Frontier also have chosen to do so. And you might well be surprised at the degree of success each of those firms has achieved, at least on the revenue sources front.

“UC revenues increased 21 percent over the last 12 months and now contributes 53 percent of consolidated revenues,”, said David Cuthbert, Alteva CEO. “Users or seats on Alteva's hosted platform at the end of the second quarter increased by over 15 percent from the installed base at the end of the first quarter.”

In other words, revenue growth now is driven by the hosted voice communications business, not the traditional telephone business.

Consolidated revenue was $7.4 million for the second quarter of 2013, an increase of over eight percent  from $6.9 million in the same period of the prior year. UC revenues, net of eliminations, were $3.9 million in the second quarter of 2013. In other words, the new revenue sources provide 53 percent of total revenues.

Telephone revenues, net of eliminations, were $3.5 million in the second quarter of 2013, down from $3.6 million for the same period of the prior year and down from $3.8 million in the first quarter of this year.

Alteva, a provider of hosted or cloud-based unified communications or hosted PBX service (depending on your preferred terminology) in 2011 was bought by Warwick Valley Telephone Co. for $17 million.

Gross margin also has changed because of the weight of UC application revenue. In the first six months of 2013, Alteva says it added over 30 percent of the installed UC base of users that had been accumulated for the past eight years. As a result, the UCaaS (unified communications as a service) recurring revenue from seats in service has driven consolidated gross margin to 57 percent of revenues, said Cuthbert.

Warwick Valley, based in Warwick, N.Y., provides telecommunications services in southern Orange County, N.Y. and part of central New York and northwestern New Jersey, as well as a competitive local exchange carrier business, USA Datanet.

There are a couple of lessons here. Sometimes a business is in secular decline because demand for its product is declining, much as any product you might think of also has a product life cycle.

That will have uncomfortable and nevertheless real implications for rural telco business strategy. There simply are times when a business is destined to decline, if it sticks to its current product line.

Sometimes that business is destined to decline, if more slowly, even when it adds major new product lines. Think of the transition from selling voice only, to selling triple-play packages.

And one traditional problem for rural telcos is that there simply aren’t that many potential customers in a service territory, even if a provider gets almost all the potential customers as actual customers.

Warwick essentially made a choice to harvest its original business--being a rural telco--and recreate itself--through acquisition--as a hosted communications provider.

One might be tempted to suggest that this is a growth strategy for all or most or many other rural telcos. And there lies the other lesson. What works for a few firms will not work for most firms, because the new markets are not big enough to support hundreds to thousands of suppliers on a sustainable basis.

So one other lesson is that transformative measures must be taken early, before the opportunity is foreclosed or made hugely more risky because one is entering a crowded or saturated market.

In other words, what a few might succeed in doing to transform their businesses cannot work for all members of the same class.

Still, the uncomfortable reality is that, for nearly all rural telcos, sooner or later, a business exit is necessary, either by sale or transformation. Sale will be the most common outcome.

If the Windows Operating System Were a House, It Would Look Like This

From here. It reminds me of the much older "if operating systems were airlines, which I actually continue to find much funnier:

What if Operating Systems Were Airlines?

DOS Airlines

Everybody pushes the airplane until it glides, then they jump on and let the plane coast until it hits the ground again, then they push again jump on again, and so on.

OS/2 Airlines

The terminal is almost empty, with only a few prospective passengers milling about. The announcer says that their flight has just departed, wishes them a good flight, though there are no planes on the runway. Airline personnel walk around, apologising profusely to customers in hushed voices, pointing from time to time to the sleek, powerful jets outside the terminal on the field. They tell each passenger how good the real flight will be on these new jets and how much safer it will be than Windows Airlines, but that they will have to wait a little longer for the technicians to finish the flight systems.
Once they finally finished you're offered a flight at reduced cost.  To board the plane, you have your ticket stamped ten different times by standing in ten different lines. Then you fill our a form showing where you want to sit and whether the plane should look and feel like an ocean liner, a passenger train or a bus. If you succeed in getting on the plane and the plane succeeds in taking off the ground, you have a wonderful trip...except for the time when the rudder and flaps get frozen in position, in which case you will just have time to say your prayers and get in crash position.

Windows Air

The terminal is pretty and colorful, with friendly stewards, easy baggage check and boarding, and a smooth take-off.  After about 10 minutes in the air, the plane explodes with no warning whatsoever.

Windows NT Air

Just like Windows Air, but costs more, uses much bigger planes, and takes out all the other aircraft within a 40-mile radius when it explodes.

Mac Airlines

All the stewards, stewardesses, captains, baggage handlers, and ticket agents look the same, act the same, and talk the same. Every time you ask questions about details, you are told you don't need to know, don't want to know, and would you please return to your seat and watch the movie.

Unix Airlines

Each passenger brings a piece of the airplane and a box of tools to the airport. They gather on the tarmac, arguing constantly about what kind of plane they want to build and how to put it together. Eventually, they build several different aircraft, but give them all the same name. Some passengers actually reach their destinations. All passengers believe they got there.

Wings of OS/400

The airline has bought ancient DC-3s, arguably the best and safest planes that ever flew, and painted "747" on their tails to make them look as if they are fast. The flight attendants, of course, attend to your every need, though the drinks cost $15 a pop. Stupid questions cost $230 per hour, unless you have SupportLine, which requires a first class ticket and membership in the frequent flyer club. Then they cost $500, but your accounting department can call it overhead.

Mach Airlines

There is no airplane. The passengers gather and shout for an airplane, then wait and wait and wait and wait. A bunch of people come, each carrying one piece of the plane with them. These people all go out on the runway and put the plane together piece by piece, arguing constantly about what kind of plane they're building. The plane finally takes off, leaving the passengers on the ground waiting and waiting and waiting and waiting. After the plane lands, the pilot telephones the passengers at the departing airport to inform them that they have arrived.

Newton Airlines

After buying your ticket 18 months in advance, you finally get to board the plane. Upon boarding the plane you are asked your name. After 6 times, the crew member recognizes your name and then you are allowed to take your seat. As you are getting ready to take your seat, the steward announces that you have to repeat the boarding process because they are out of room and need to recount to make sure they can take more passengers.

VMS Airlines

The passengers all gather in the hanger, watching hundreds of technicians check the flight systems on this immense, luxury aircraft. This plane has at least 10 engines and seats over 1,000 passengers. All the passengers scramble aboard, as do the necessary complement of 200 technicians. The pilot takes his place up in the glass cockpit. He guns the engines, only to realise that the plane is too big to get through the hangar doors.

BeOS Air

You have to pay for the tickets, but they're half the price of Windows Air, and if you are an aircraft mechanic you can probably ride for free. It only takes 15 minutes to get to the airport and you are cheuferred there in a limozine. BeOS Air only has limited types of planes that only only hold new luggage. All planes are single seaters and the model names all start with an "F" (F-14, F-15, F-16, F-18, etc.). The plane will fly you to your destination on autopilot in half the time of other Airways or you can fly the plane yourself. There are limited destinations, but they are only places you'd want to go to anyway. You tell all your friends how great BeOS Air is and all they say is "What do you mean I can't bring all my old baggage with me?"

Linux Airlines

Disgruntled employees of all the other OS airlines decide to start their own airline. They build the planes, ticket counters, and pave the runways themselves. They charge a small fee to cover the cost of printing the ticket, but you can also download and print the ticket yourself. When you board the plane, you are given a seat, four bolts, a wrench and a copy of the seat-HOWTO.html. Once settled, the fully adjustable seat is very comfortable, the plane leaves and arrives on time without a single problem, the in-flight meal is wonderful. You try to tell customers of the other airlines about the great trip, but all they can say is, "You had to do what with the seat?"