DISRUPTIVE INNOVATIONGROUP 8:

HIMANSHU ARORA

NIKHIL SINGHVI

DEEP DAGA

CHITTRESH DHAWAN

SWATI SINGHAL

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

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

VOIP AND P2P: TWO DISTINCTDISRUPTIVE 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

VOIP AND P2P: TWO DISTINCTDISRUPTIVE 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.

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)

SKYPE

• http://www.youtube.com/watch?v=5nRKyQ11494

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

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

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

REFERENCES

• http://www.makeuseof.com/tag/fed-up-with-skype-here-are-6-of-the-best-free-alternatives/

• http://www.onlinemarketing-trends.com/2011/06/skype-timeline.html#.UopIYpJpkZF

• http://are.berkeley.edu/~sberto/SkypeHype.pdf

• http://faculty.poly.edu/~brao/skype.pdf

• http://www.examiner.com/article/word-of-mouth-or-word-of-mouse