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Lync Gets Skyped

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, 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 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?

So if Lync-Skype product integration will continue apace anyhow, why excise Lync out of the Office Division and transplant it into Skype? One possibility--and here's my grand piece of speculation--Microsoft plans to completely meld Lync and Skype together. Where there is currently a premise-based product delivering enterprise-grade UC functionality to businesses and a cloud-based service delivering consumer-grade UC functionality to consumers, there will be a single platform that can be deployed on a server or adopted as a service that delivers varying degrees of UC features to businesses and consumers alike.

This would be a long and complex undertaking given the vast differences in Lync and Skype's underlying technology. It would require completely reworking one or both products, not just doing the comparatively straightforward integration work that has taken place so far. Much better to do something on that scale in a combined Lync-Skype organization.

Another, less grandiose, possibility, is that Microsoft plans to develop a carrier-class hosted UC service. Microsoft already has this--sorta kinda--with Lync Online. But Lync Online doesn't have the Enterprise Voice capabilities that currently make Lync Server 2010 a viable alternative to traditional PBXs. If Enterprise Voice was added to Lync Online, Microsoft would have a viable alternative to carriers' hosted UC services. In this scenario, Microsoft would deliver both the carrier-class UC service and trunk service a la Skype Connect. I don't know enough about the Skype infrastructure to say how much the Skype network would be needed to deliver this. Maybe someone who is more of a Skype expert could weigh in.

Of course, both of these scenarios would pit Microsoft against its service provider partners intent on offering Lync-based hosted UC services of their own. Some are doing this using Lync Server 2010 Multitenant Pack for Partner Hosting, while others like BT are basing their services on standard Lync servers deployed in their data centers. But the Lync team has never been shy about at first relying on partners then competing all out against them. Just ask Siemens Enterprise Communications. And Mitel. And Nortel. Ok, you can't ask Nortel. But you know what I mean.

(Incidentally, are Lync Online and Lync Server 2010 Multitenant Pack for Partner Hosting also under Skype now? Because Lync Online is a component of Office 365 which, as far as I know, is still part of the Microsoft Business Division or Office Division or whatever. Or has Office 365 been moved over too and word about it hasn't spread just yet? Frankly, moving Office 365 over to Skype could make as much sense--more even--than moving Lync over. All the cloud eggs in one basket, if you know what I mean.)

Well, that's enough prognosticating for one day. Please bear in mind that I have no inside knowledge as to Microsoft's motives behind this move or its aspirations for where it will lead. The company is being surprisingly secretive about it, so what I wrote here is the product of my own fevered imagination. If you disagree or have other ideas as to where this is going, be sure to comment below!

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