Microsoft/Skype merger hits snag

22 Feb 2012

Last year Microsoft announced its intention to buy Skype, to capture video conferencing at the low end and to integrate it into its more upmarket Lync system. But there have been objections.

It seemed like an easy path from here. Microsoft had agreed to buy Skype, no doubt planning some sort of integration into Office 360 so people would get a more seamless online Microsoft experience with elements of UC at a remarkably low price.

The European Commission had agreed the merger could go ahead. But then unexpectedly Cisco has asked the EC to look again at the conditions under which the merger may happen.

Put simply, Cisco is concerned that far from growing the market overall, any tighter links between Lync and Skype will actually inhibit new users from buying into UC. Cisco filed an appeal with the General Court of the European Union this month, seeking not to block the merger but to get assurances that Microsoft will encourage open standards rather than tie everyone to Skype technology.

There’s room for some debate on how realistic this is. Microsoft certainly isn’t used to opening its systems up for everyone else voluntarily. It’s no Apple, it’s true, which could be seen as a series of technically elegant walled gardens which are pretty but walled nonetheless. But in the past it’s been surprisingly resistant to any real openness of standards. It took legal manoeuvres to get it to offer users a choice of web browser when they first set up their system.

More conspicuously it’s important to remember that although 95% or more of the desktop market uses it, Windows isn’t an open system at all. It’s very much proprietary to Microsoft. Granted, Microsoft makes code available to developers and most software manufacturers for the desktop are only too pleased to work with it – this may be fading a little as things move to the cloud but it was true for an awfully long time. But this is the market coming to Microsoft and selling in its playground, not the other way around.

So Microsoft may be less than likely to welcome rival technologies into its Lync environment. Which presumably is why Cisco felt it was worth approaching the authorities to enforce this. And if Cisco’s view of the market is right then this is going to work in Microsoft’s favour anyway, by growing the market overall.

An announcement will no doubt be made in due course; at this stage Microsoft is sitting pretty on this being a refinement made after the deal had been agreed. How willing the EU will be to turn around and say “OK, we goofed, here’s a revision” could dictate the outcome.

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