Microsoft Begins VoIP Bloodbath

    February 20, 2006
    WebProNews Staff

What many had speculated for a while seems to have been verified from the words of Steve Ballmer: Microsoft is entering the VoIP market, offering free calling through Wi-Fi-ready mobile phones running Office Communicator for Windows Mobile. Upon the news, one analyst predicted a “bloodbath” for mobile operator stocks.

Why is it every time Steve Ballmer speaks, I swear I hear the Imperial March in the background?

The Microsoft foray into the Voice over Internet Protocol (VoIP) market shouldn’t be that surprising. A 27-page whitepaper the Redmond, Washington-based company released in 2003 discussing the technology and ways to decrease the cost of voice and data communication was one hint.

EWeek’s Michael Myser called a Microsoft VoIP move “only natural” in 2004 with the company’s release of its Live Communications Server 2005. An effort to horn into the telephony market, said Myse, was “not entirely surprising.

Speculation increased when the Beast of Redmond bought PC-to-PC phone company Teleo last August. In fact, writers were still pondering the VoIP inevitability as late as last week. But speculation was limited to paid search and click-to-call.

ZDNet’s Russell Shaw, unimpressed by Office Live beta, asked in a Wendy’s commercial reminiscent voice, “where’s the VoIP?”

Then, on Valentine’s Day, Ballmer delivered a keynote address at the 3GSM World Congress in Barcelona that most likely broke the heart the of mobile communications providers everywhere.

From the keynote transcript, Ballmer is using a mobile phone:

PAUL: Yeah. Hi, Steve. How’s it going?
STEVE BALLMER: I’m great, Paul, as long as the demo works. (Laughter.)
DAVE KARLE: All right, Paul, we’ll talk to you later.
PAUL: Bye.
DAVE KARLE: Now, let me go back to the contact card before I finish this up.
STEVE BALLMER: Now, that call, how was that call transmitted?
DAVE KARLE: That was a VoIP call.
STEVE BALLMER: That was a VoIP call transmitted using the voice capabilities in our instant messaging software, along with the client software in Office Communicator for Windows Mobile.

Let the “bloodbath” begin.

A press release issued from Spain the same day gave a few more details:

Introducing Microsoft Office Communicator Mobile

With Microsoft Office Live Communications Server, Communicator Mobile offers workers an enterprise-grade solution for mobile devices that goes beyond just simple voice services. Communicator Mobile incorporates connected communication modes such as security-enhanced instant messaging, presence awareness and integrated VoIP telephony.

Communicator Mobile is expected to be available for download for Live Communication Server customers within 60 days.

Intended for the business world, the service may spread to private users next. In sixty days, says, the St. Valentine’s Day massacre will be complete.

Cyrus Mewawalla, an analyst at Westhall Capital, believes VoIP, when backed by Microsoft, will have a more devastating effect on mobile operators than it did on the fixed-line operators, which saw their voice revenues slashed after the introduction of VoIP services such as Skype.

“Internet voice does not even have to take market share to force traditional operators to cut their prices. The mere thought of free voice is enough to make customers push for price cuts,” said Mewawalla, predicting a bloodbath for mobile operator stocks.

Dum dum dum dum da dum dum da dum dum da dum. (heavy, mechanized breathing)

STEVE BALLMER: We’ve already sold over ten million units. (breathing) Communicator brings presence and instant messaging and voice capability to the Microsoft Outlook and Office (breathing)this is a killer

Dum dum da dum dum da dum dum da dum

Drag this to your Bookmarks.

Add to DiggThis Yahoo My Web