How Skype will impact Microsoft

At $8.5 billion, the acquisition of Skype is probably Microsoft’s biggest. MS tends to buy much smaller outfits, where it integrates technology. It is clearly trying to build a compelling online presence with Microsoft Live and xBox Live.

One could argue, $8.5 billion is the only way Microsoft will ever get people to buy Windows Phone. Skype is cross-platform so Skype users may be worried that they’ll all need Microsoft Live accounts, or worse, Windows hardware. Perhaps Microsoft will attempt to integrate Skype into future versions of its operating systems. One can see how a version of Embedded Windows with Skype may be compelling for TV manufacturers who could offer armchair video conferencing on their LCD and plasma TVs.

But what about the enterprise? I think $8.5 billion is a lot to spend. And it is hard to see how, with Skype,  Microsoft will offer smaller, medium and larger organisations anything they cannot already get.

So if MS is spending this much on effectively buying a bigger stake in the consumer market, will it continue to develop enterprise products with the same zeal it has done previously. The enterprise is slow-moving, dislikes big changes. Windows 7 is a success, but look how long it has taken Microsoft to get there.

So perhaps, with the acquisition of Skype, Microsoft CEO, Steve Ballmer, is showing the world that Microsoft will buy its way into the consumer space, irrespective of cost, and arguably, at the expense of innovation in the enterprise.

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