There is a lot of noise in the system this week questioning when we’ll see the first fruit of Microsoft’s acquisition of Skype. I think it is important to put this acquisition in context, because I find people’s expectations a bit naive.
Skype has been part of Microsoft since mid-October 2011. Sure the acquisition was announced in May 2011, and certainly discussions between the companies on ways to work together could have been going on for many months before that. But on that day in May when the ink on the agreement between the companies was still wet a funny part of (U.S. at least) anti-trust law kicked in. Neither company was allowed to make any changes to their product plans, strategies, business plans, etc. until the transaction closed. The only allowable activities were around planning for what would happen once the acquisition was complete. This is meant to keep the two companies “whole” in case the transaction is blocked by regulators. But sadly it means that anything that Microsoft and Skype want to do together couldn’t even be started on until mid-October. Why haven’t we seen anything out of the acquisition yet? Well, it’s only been 3 months!
While the impact of anti-trust law is not a Microsoft-specific factor, other factors are. As soon as you become part of Microsoft the pressure becomes intense to make your product a Microsoft product. How quickly can you move to the proper installation technology? Help technology? Meet globalization guidelines? Address all of the legal requirements Microsoft is subject to around the world? And perhaps most importantly, bring your products into line with the Security Development Lifecycle (SDL) process. You can continue shipping existing products without addressing these issues, but as soon as you release a new one you have to be on the path to it being a Microsoft product.
No you don’t have to have everything “Microsoftized” in a single release. For example on the SDL front you likely have to do an evaluation to see where you are, address anything serious, and then seek exceptions to ship with more minor issues (e.g., False Positives in your code). Those exceptions don’t last forever, so after that first release you are going to have to devote resources to finish the SDL work as soon as practacle.
There is more flexibility on fronts other than the SDL, but still there will be pressures to address them quickly. Let me take a legal example, the placement of international borders and the names of places. Where these are in conflict Microsoft (and other companies) have had to make decisions on how to present them (e.g., on maps) that balance the requirements of the conflicting parties. Failure to do so can result in Microsoft products, and not just the offending product, being banned from sale in those countries. Imagine releasing a Microsoft Skype and having a China ban the sale of Windows and Office because Skype offended the Chinese government (even though as a standalone company Skype was allowed to slide on addressing China’s concerns). In addition to its immediate negative business impact, the PR hit is unacceptable.
Beyond the integration impacts I’ve mentioned it is also important to decide what you want to do that immediately says “we’re a Microsoft product now”. In other words, show some positive benefit of the combination. Usually that means some kind of real integration with other Microsoft products. The most obvious one of those for Skype would be to support the use of Live ID as an alternative to Skype’s own identity system. Is it necessary that they do this in a first release, no. Would it immediately send a message and add 100s of millions of users to Skype’s user base? Yes! Are they doing this? Eventually of course. But would they hold the first release to make an initial stab at it (e.g., still require creation of a Skype ID but allow it to be linked to a Live ID) for a first release? I would.
I expect new Microsoft Skype products to start shipping later this year, perhaps as early as this spring (depending on what they were working on prior to May 2011 and how much they try to Microsoftize things). But we all have to keep our expectations in check. The acquisition process is not pretty, and the real work of integrating the companies and the products has only been going on for 3 months.