2. INTRODUCTION
• A disruptive innovation offers a lower performance than what the
mainstream market has historically demanded
• At the same time it provides some new performance attributes, which
in turn makes it prosper in a different market
• As it improves along the traditional performance parameters it
eventually displaces the former technology
3. BACKGROUND
• Early 2000’s: emergence of the internet was challenging the telecom
sector, which held an unopposed position in the field of
communication via features like voice calls, text messages etc.
• Telcos (voice carrier companies) had come to charge high tariffs for
their services and the consumers were now willing to shift to a
cheaper option, if any
4. VOIP AND P2P: TWO DISTINCT
DISRUPTIVE TECHNOLOGIES
• VoIP:
• IP based application used to provide convenient communication between users
• Essentially used for real time transfer of voice communication
• Major VoIP service providers in 2000’s were cable companies like Time Warner
Cables, telcos like AT&T and Verizon etc.
• Major drawback: VoIP calls were vulnerable to security threats
5. VOIP AND P2P: TWO DISTINCT
DISRUPTIVE TECHNOLOGIES
• P2P:
• Major development in the way of structuring applications that enabled rapid
transfer of data-packets by mutually exchanging information & services between
producer and consumer of that information
• Rather than being divided into clients and servers, in P2P applications a node
may act as both a client and a server
• Several applications based on this technology were launched, for example P2P
file sharing by Napster, P2P communication by NNTP & Instant Messaging(IM)
etc.
6. PERCEPTION OF THE TWO TECHNOLOGIES
• Following the norms of evolution of disruptive technologies, both VoIP
and P2P were individually under-valued by traditional lead customers
in their respective markets and were generating lower gross
margins, in addition to being perceived as ‘‘low-end’’ by industry
incumbents (Thomond et al., 2004)
8. SKYPE
• Global Internet Telephone Company based in Luxembourg that
provides a quick, easy and cheap way for subscribers to make VoIP
calls bundled with P2P technology
• Founded by Niklas Zenstrom and Janus Friis
• Features like Skype video/audio chat, Skype Out, Skype In, Skype
Voicemail, Skype SMS
• Tariffs considerably cheaper than traditional telcos and other VoIP
platforms and ‘Skype to Skype’ totally free
9. WHY SKYPE IS SUCCESSFUL
• Voice quality as good as traditional telephones
• Service of VoIP + P2P
• User friendly (easy to install/use)
• Privacy ensured by encrypted VoIP calls
• Simple and effective promotion strategy, use of strong ‘word of mouse’
networks to build up a mass of users
10. EFFECTS ON THE TELCO INDUSTRY
• Telcoms forced to re-think their business models to reduce their costs
• More and more players introducing VoIP services
• Customer base shifting to Skype, stealing traditional player’s profits &
threatening their existence
• Competitors such as Viber, FaceTime, Tango, Google
Hangouts, Jitsi, VoxOx and Goober rising in the market
• The whole industry has gotten redefined
