Thursday, March 2, 2006

Was that a dumb move?

It seems AMD is now suing Skype because of the exclusive deal they have with Intel regarding the availability of a conferencing feature only on machines with an Intel dual core processor. I thought something like that would happen and not only because the US have a tradition in making lawyers rich. And it makes me wonder...

  1. what strategic purpose may have convinced Skype to strike a deal of this sort? After all, their business is to provide hassle-free low-cost telephony services to as many people as possible. So why exclude non-Intel users?

  2. if indeed Skype's 10-way conferencing feature requires processing power that only Intel is supposed to be able to provide, then is this not a clear indication of the limitations of a communications technology? If you can't catter to the needs of 10 people trying to have a conf-call, then how can you expect to serve the professional market? And if you don't want to serve that market (I wonder why that would be the case), then how do you expect to achieve returns justifying a price tag somewhere between 2.5 and 4 billion USD?

  3. what value is there on Intel's side to go for something like that? I doubt it will bring them more sales of their dual core processors and on the image front it probably confirms the recent impressions that they are struggling badly in segments of the processor market where their dominance had not been challenged seriously in the past.

  4. would a consumer buy a PC with an Intel processor just to be able to have conf-calls with 10 participants? would a business go for Intel based machine when renewing their equipment simply because of the set of exclusive deals with software makers that Intel has or will have?

  5. what resources and how much focus will this whole thing compell Skype to invest in the legal fight instead of trying to develop their business?

Being one of the top names in a business often means that lots of people will try their best to beat you. And some of them just have the talent to challenge you very seriously. These are not times when incumbent can sleep on their laurels... In Skype's case, I believe Jajah is a formidable contender who will seriously curtail Skype's market ambitions (unless the incumbent is able to focus on redefining its strategy... and, no I don't believe anything less than that can save them when Jajah goes live with all its potential). This whole deal looks silly, but perhaps it is just me not being able to see its value... If you have an opinion, or answers to the above questions, let please me know. I'd hate to die totally stupid :)


  1. dear alex, to answer at least one of your doubts you can check to see that even an intel spokesman said that there are no instructions that specifically enhance the performance of voip software like skype's in intel's dual-core chips, and that skype's software uses a function called "GetCPUID" to permit 10-way conference calls only when that function detects an Intel dual-core processor on start-up. this at least clearly toggles the doubt whether you need 'special superpower' to process the 10 users conference.
    i just think that this is to be related, on a broader scale, to the compelling and scaring trend according to which currently software companies are concentrating more on the hardware/software connubium to expand through multinational agreements and to protect from fraudolous usage of their applications, rather than considering real improvements of the applications themselves.
    some examples.
    TC (trusted computing). highly controversed at this time, and windows vista. even though very recently microsoft is saying that vista is not going to use TC, i personally believe that if this is going to be the case for vista, certainly not for the next microsoft OS to come.
    apple osx. since the partnership with intel, osx is checking for the presence of specific hardware on the processor, otherwise it simply won't install nor work. this is to guarantee design usage of macs (which i personally agree with) but at the same time it forces mac users to buy mac hardware.
    windows XP 64-but edition: delayed, it is supposed, notably because intel wasn't ready with a competitive 64-bit processor, while AMD was. maybe this is to be related to the recent 'friction' between microsoft and intel, pushing the latter to engage in the famous apple partnership and, as covered in this topic, other partnerships such as the skype one. just conjectures, though.
    i'm just sad to believe that most efforts done nowadays seem to be coverring 'security', 'legality', 'encryption' aspects of the software applications. question remains: whose security. i personally enjoy the freedom of using my computer, like installing various OS such as linux and freebsd, much more than 'securing' my data against a very randomly and unrealistic usage by any wanna be hacker. i actually think i'd rather trust them than any multinational controlling by distance what is going on my computer.

  2. Yes, Roberto, your analysis is spot-on.
    Actually there is a hell of a lot of critical fights going on now, which will determine whether or not we stay in a world of autonomous responsible individuals or move to an institutionalized rigid world as the neo-cons would want it. This is really the fight between the values of Lawrence Lessig, the EFF, Public Knowledge, Creative Commons (all of which I support) and the straightjacket special interests are trying to weave for all of us. Scary perhaps. Worth taking position on, definitely.
    Let's keep the networked world a funky place :)

  3. i'm afraid multinationals might really win over this time, since these are the ones building the hardware components we are talking about.
    a major switch to linux would be a solution? unfortunately this requires time, efforts, and intelligence. and should it work, it won't be long before someone claims and obtains the ownership of the copyright on it (bell labs? :)
    oh, heck. feeling pessimistic today. i'd probably take out my old electronic kit from the cave and start playing with it.

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