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Brian Riggs
Brian is a member of Ovum's Enterprise team, tracking emerging trends, technologies, and market dynamics in the unified communications and...
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Brian Riggs | October 31, 2012 |

 
   

Lync Gets Skyped

Lync Gets Skyped The enterprise communications system gets incorporated into the Skype business unit. What does it mean?

The enterprise communications system gets incorporated into the Skype business unit. What does it mean?

Interesting and unexpected news this week: Microsoft has apparently placed the Lync team under Skype, which operates as its own business unit within the Microsoft org structure. I was incredulous when I first got wind of it since it was one of those "someone told someone who told me" sorts of things. But someone also told Dave Michels, who broke the story on his blog. And if two industry analysts heard the same thing, then it's gotta be true, right? In any case, Microsoft is keeping mum about it, so all we can do at this point is speculate as to motivations and meanings. So here I am, speculating.

By way of background, there are two ways of looking at where Lync has fitted in organizationally up until now. The first is through the prism of SEC filings, the most recent of which places the Lync team in something called the Microsoft Business Division that "develops and markets software [Office, Dyanmics] and online services [Office 365] designed to increase personal, team, and organization productivity." Skype, for its part, is in the Entertainment and Devices Division that "develops and markets products [Xbox, Windows Phone] and services [Skype] designed to entertain and connect people."

But track down an org chart and Microsoft Business Division and Entertainment and Devices Division are nowhere to be seen. Rather, Office and Skype are their own divisions, led by Kurt DelBene and Tony Bates, respectively. But any way you slice it, Lync has been in the BU that develops Office, while Skype is separate and off doing its own thing.

Now if you ask me, it has made perfect sense to have the Lync team part of the Microsoft Business Division...er, the Office Division...whatever. Lync's chief value proposition and competitive differentiator has been the degree to which it can be integrated with Microsoft's larger suite of business productivity software. This is also the way Lync often finds its way into the enterprise: it's purchased and deployed by Microsoft-friendly CIOs and/or IT departments interested in Microsoft-based communications software that plays nicely with other Microsoft applications on which the company is highly dependent.

And it has made sense for Skype to be separate...at least it sort of makes sense. While its main business lies with consumers, Skype has long had its eyes on the business market, and its SIP trunk alternative is seen as particularly disruptive to telcos. More traction in the enterprise market would help Skype better monetize its network, and Microsoft is eager to do this given the huge chunk of change it spent to acquire Skype. Lync has proven traction among businesses--both as a corporate IM platform and a PBX alternative--so integrating it more closely with Skype could further Skype's fortunes in the enterprise market.

The thing is, though, the Lync team doesn't need to be part of the Skype organization for product integration to take place. Witness the Lync Server 2013 upgrade, in which Skype federation figures prominently. Microsoft didn't need to remove Lync from the Office Division to make that happen in pretty short order. Just like shuffling Lync over to the Skype division won't mean integration with the Office products will grind to a halt. That will need to be ongoing regardless of where Lync sits organizationally.

Next page: What's the long-term plan?



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