After two years of solo performance in the VoIP market, Skype is now facing two heavy competitors: Gizmo Project and PeerMe.
Two years ago, Skype’s emergence was considered a highlight in the free PC-to-PC voice market, but today, this market is witnessing a boom of VoIP services emerging from peer-to-peer applications.
Peer-to-Peer is a sharing network that allows direct interaction between two computers running the same application software without going through intermediary computers. Notable names include GoogleTalk from Google, Triton from AOL (America Online Inc), Yahoo Messenger from Yahoo, and IVE from Sony. However, the two faces expected to be real competitors to Skype are Gizmo Project and PeerMe.
With its early launch, dominant market position, and solid backing from eBay, the question arises: Is there anyone who can defeat Skype? The answer is: The market still holds many opportunities for superior technological innovations, given that currently, among over a billion Internet users worldwide, only 40 million are registered Skype users.
Gizmo Project was introduced in July 2005 with aspirations to become a heavyweight in the VoIP market. Gizmo allows users to access all the services that Skype offers. However, the highlight of Gizmo Project is not the number of services or cheaper prices (PC-to-Phone) but its technological interaction capabilities. While Skype and traditional VoIP providers use peer-to-peer applications that only allow members to interact when using the same software or platform, Gizmo Project users can interact with users from many other VoIP systems. Even with PBX systems based on SIP (Session Initiation Protocol), which provides easy integration of voice with other web services, Gizmo Project also facilitates communication.
On the other hand, while Skype employs closed and proprietary platforms, Gizmo Project’s platform is entirely built on open-source standards. This is a significant advantage for Gizmo Project, as the trend of using VoIP services among households, businesses, and educational institutions is increasingly solidified – this is why experts believe Gizmo Project is on the right track.
Meanwhile, PeerMe was introduced in September 2005 targeting certain Asian markets such as Japan, South Korea, China, and India, employing a completely different business strategy compared to Skype and Gizmo Project. PeerMe does not compete on the principle of “cheaper prices, better quality” as other Internet phone companies typically do. “PeerMe is not just a phone call; it’s an integration of voice and web functions,” said Tom Lasater, co-founder and CEO of PeerMe.
Accordingly, bloggers everywhere can quickly meet and chat with their favorite bloggers. To pursue this business strategy, PeerMe has closely collaborated with web developers and database management companies throughout Asia. In the future, PeerMe hopes to generate revenue by integrating its services with online database services. PeerMe has also introduced two services that can add value for customers: a dating website (dating site) allowing users to converse with like-minded individuals and a language exchange service that enables users to practice foreign languages with native speakers.
Another technological aspect that PeerMe aims to exploit is the trend of integrating the Internet with mobile devices. Users of mobile phones will use PeerMe not only to access familiar services like games and music but also to easily communicate with bloggers, dating websites, and those with whom they wish to practice foreign languages.
Clearly, Gizmo Project and PeerMe have certain advantages that could make them formidable competitors to Skype. However, one thing is certain: achieving this will not happen overnight, as Skype already boasts 40 million global users, while Gizmo Project and PeerMe have just entered the VoIP market.
For Gizmo Project, its open structure, ease of making calls to landlines and mobile networks, ability to store call information, and high interaction with other VoIP networks are undeniable advantages. However, currently, the most convenient VoIP connections for users are still the internal network connections – if white-collar workers are satisfied with Skype, they may not easily switch to another network, even if it’s Gizmo Project.
Thus, Gizmo Project must implement many breakthrough solutions to increase its subscriber base before considering obstructing Skype. For PeerMe, the principle of building user communities on the web and sharing online databases appears very convincing from the perspective of anticipating technological trends. However, PeerMe still needs to work diligently to attract web developers and database management companies to realize its business strategy.
Of course, in the rapidly changing VoIP technology landscape with the emergence of numerous competitors, Skype does not want to remain a spectator. Not only is it expanding its PC-to-Phone SkypeOut service to Asia – Skype has partnered with Pacific Internet to offer this service in Singapore and is currently seeking licenses to provide services in China – but recently, Skype also introduced version 2.0 beta, allowing users to make free video calls.
Indeed, VoIP service providers based on peer-to-peer applications are engaged in a race to improve technology with many interesting business strategies, and of course, the biggest beneficiaries of this race are the customers.
Ba Lam
