Tag Archives: VOIP History

Breaking News – Avaya to IPO

avaya-logo

avaya-logoFor the third* time in 16 years, Avaya will be going public to sell $1 billion worth of the company (how much of the company that represents is not clear) as announced in a press release earlier this afternoon. Avaya is not the same company you might recall in recent times. It is the combined entity of Avaya and Nortel Enterprise with a much larger sales footprint in North America channels, managed services including telepresence professional services and the recently announced discontinued BCM (transitioning products, channels and customers to IP Office).

The other times Avaya went public: in 1995 Lucent, the equipment manufacturing arm of AT&T was spun out and then in 2000 the enterprise division was spun out of Lucent as the standalone entity, Avaya. At the peak of the last market bull run, Avaya was acquired in a Private Equity transaction in 2007.

 

Stop the Presses! Avaya Enables Connections to Carrier!

What?

Avaya announced yesterday with some attempted fanfare that they’ve signed some kind of strategic agreement to interconnect their products with the global telephone company, Skype. Yawn. Isn’t that what IP PBXes are supposed to do?Next.

Thankfully, I was being briefed by a few really innovative companies and missed the all hands on deck presentations. Instead, I spent my time reviewing features that very few companies are doing – not wasted listening to the trivial feature described as extraordinary. A little over-PR for my taste.

WHAT? Cisco Wants to Buy Skype?

ciscologo

ciscologoI almost fell out my chair today. I heard from a friend (incidentally over Skype) that Cisco was planning to pre-empt Skype’s IPO and wanted to acquire the service provider for as much as $5 billion. Then, I read about it on the Wall Street Journal, and over at CNet. What a joke.

I am down on this initiative for a couple reasons: Cisco-Skype would be competing with Cisco’s biggest channels and customers, who have been loyally purchasing Cisco’s margin-rich routers and switches for years. Those channels and customers have alternatives and likely will act to win.

Although some note that Skype could complement the WebEx service, the fact remains that Skype’s operating philosophy is to avoid standards and focus on proprietary technologies and architectures. There are no technology synergies with Cisco products and Skype services. Cisco can integrate their products today with Skype today as part of the Skype developer program like many other IP PBX vendors have done, without having to spend 5 big ones.

If Cisco wants to pay too much to own a company that generates a little income, they’d be better off keeping it in the banks they have. In fact, Cisco would be better off BUYING A BANK. That way they can earn the spread on their money, instead of just the interest (zero or nearly zero today).

Frankly, Microsoft would be a better acquirer than Cisco, since it would give them millions more subscribers to add to their existing free services.

Skype Statistics 1H2010

Skype statistics comparing previous years

Further to Paul’s note about the upcoming Skype IPO, here’s the statistics update as of June 30, 2010.

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Hyped up on Skype!

skype

skypeIf you haven’t heard, Skype is going public.

It’s Initial Public Offering is expect to be about $100 million dollars and represents only about 5% of the company’s equity. Given that the company is worth something like $2 billion (based on the eBay divestiture), and is generating tons of cash, creating a market for Skype shares seems like a sound proposition.

Skype is the internet app company that enables Internet calls computer-to-computer including video calls, for free. It makes 90% of its money through SkypeOut, a service where PC-originated voice calls are terminated on cellphones and landlines. Widely successful with this simple service model, Skype has 560 million downloads, ~145 million users use the service at least once a month, and 8 million users (including me) who pay for services.

Lately, to continue its growth surge, Skype is pushing to greatly expand their network of possible devices. They’ve made big deals with mobile operators (Verizon-Skype comes to mind) where the app is available on the packet 3G network with select smartphones. More recently the Skype Developers Kit (SDK) is available to consumer device manufacturers – primarily TV manufacturers (Panasonic, Samsung, LG to name three popular brands) – that want to put Internet apps including Skype on their TVs. There are also Internet-attached phones that use Skype (we have one) that does not require a computer. expanding its convenient and cost-effective market share well from what it is right now.

Skype has over 560 million registered users this year which is a 50% increase from last year, according to Skype’s IPO filing by the numbers. These are the kind of numbers that prove that they are ready to play in the public market, but with only a small fraction of the company available, they will be positioned in the Google and Apple price range (hundreds per share).

Skype is joining Zipcar Inc in this year’s exciting IPO ledger. This is probably the most hyped IPO since Google’s IPO in 2004. Everybody expected it, just not this soon.