The initial payoff for Microsoft will be in its consumer business. The company paid a lot of money for a name-brand that boasts 600 million registered users, and which it can now integrate into not just applications but also, more profitably, gaming and search. That's the big bang, initially, although it's actually not all that big: In 2010, less than $1 billion in revenues from 8.8 million paying users, and a loss overall for the company. Additionally, while Ballmer stressed the value of Skype's 100 million users connected for about 100 minutes a month, that doesn't strike me as all that great. How many minutes do you spend on your cell phone, landline and PC--talking, texting, emailing etc.? Presumably far more than 100 minutes a month, which puts Skype usage into pretty good perspective.
That said, for consumer Internet communications, there are two players, Skype and Google, and with Microsoft now behind it Skype is well positioned to put the combined vendors way out in front for the foreseeable future. If nothing else, the acquisition could keep prosumers on Microsoft apps, and grab some market share for Bing, as well as enable mobile apps and services down the road.
On the enterprise side, things are a lot murkier. Much has been made about the fact that Skype gives Microsoft a good leg up in the cloud, and with Microsoft's channel and trusted-partner status, it could help Skype for Business succeed; access to business buyers and conveying to those buyers a sense of enterprise-grade performance, support and security were the two biggest roadblocks Skype faced on that front.
But is that, in fact, the business Microsoft wants to see succeed--or will it want to re-brand Skype for Business as "Lync in the Cloud," or simply make it part of Office 365? If it does that, it's paid a hefty price for technology, not branding or customers--too hefty, if you ask me. If it doesn't do that, where does it go with Lync and Office 365? (Skype is, by most accounts, better at handling communications over the Internet; Lync is better at integrating with enterprise networks and other enterprise communications. Put them together and it's like peanut butter and chocolate, Microsoft is thinking, but is it really that easy? No way.)
Microsoft's acquisition history is mixed at best, and Skype is a big one, which means it will involve all the challenges of previous purchases and then some. To me, the deal is reminiscent of Cisco's WebEx purchase and, in a different way, the AOL-Time Warner merger. Cisco could have used WebEx to replace its existing UC apps and services, but it didn't, and hasn't still; instead, it continued to sell WebEx as a stand-alone service--and although WebEx continues to do well (unlike Skype, it's profitable, and was when Cisco bought it), it hasn't helped Cisco transform its broader business or, I would venture, convert non-Cisco WebEx users to its networking and telephony gear. Meanwhile, when AOL and Time Warner merged, AOL was the sexy upstart that gobbled up the old fogey and promised to take it into the Internet century on the backs of its 20 million users. And...we all know how well that turned out.
For Microsoft to make Skype work on the enterprise side, it will need to make hard decisions about whose technology to use for what (perhaps jettisoning its own for Skype's in some areas); support multi-vendor integration (what, pray tell, will happen with the Avaya partnership, or Skype's recent agreement with Citrix Online?); and have a clear vision for and commitment to selling Skype into the channel (sales that may come at the expense of Lync). Experience suggests all three are difficult tasks that take courage and leadership. Microsoft's gambling $8.5 billion that it will succeed, but the payout is likely years away, if it comes at all.