Management of Technology Final Assignment

Business Model Canvas

Sitti Alvina
1306393181

Skype Business Model Canvas

Contents
Company Profile ...................................................................................................................................................................................................................... 2
Skype Business Model Canvas ................................................................................................................................................................................................. 3
Relationship Matrix ................................................................................................................................................................................................................. 9
Patterns ................................................................................................................................................................................................................................ 11
Mapping Environtments ........................................................................................................................................................................................................ 12
Risk Mapping ......................................................................................................................................................................................................................... 15
New Alternative Future Business Model ................................................................................................................................................................................ 16
References ............................................................................................................................................................................................................................ 20
Appendix ............................................................................................................................................................................................................................... 21

Skype Business Model Canvas

Company Profile
Skype is a global technology leader that enables real-time communication over the internet. It offers high-quality, easy-to-use tools for consumers and
businesses to communicate and collaborate globally through voice, video, and text message. 663 million users are registered, out of which 8,8 million are
paying users. It can be accesed by its website (www.skype.com) or its apps that can be downloaded on the web. Skypes products are on multiple platforms
including iOS, Blackberry, Linux, Android, and Symbian. It is already integrated with Facebook. It is found on 2003 by Niklas Zennstrom and Janus Friis.
The software is invented by Ahti Heinla, Prliit Kasesalu, and Jaan Tallinn. On 2005, Skype was purchased by eBay, SkypeOut Services was banned in South
China, and the video call is introduced in late 2005/early 2006, and then the number of users reach 100 million. On 2007, users were unable to connect to the
network because of a Skype system wide crash. On 2008, Skype founders had conflicts with eBay and destabilized the company. Fortunately, Josh Silverman
becomes CEO and brings the stability to Skype. Since 2011, it becomes a part of Microsoft that has some Pros and Cons. The Pros are microsoft gains
Skypes community of 100 million active members who log more than 100 million minutes each month, the technology will help a number of Microsofts
products like Windows Phone 7 become more competitive, and by purchasing Skype, Microsoft has gained a popular service and has denied its competitors
from acquiring it. The Cons are many worry if Microsoft will screw up the purchase consequently hurting Skype, Skypes employees my move on to other
companies if they do not like working with Microsoft, and by paying nearly $ 1,000 for each Skypes active users, many wonder if Microsoft overpaid.
Skype has many features that are offered to users worldwide, such as: send message, skype to skype, skype out, skype number, skype to go, skype
connect, video conferences, and conference calls. It is free to start using skype for several features like skype to skype, video call, and instant message with
other people on skype. But, you have to pay to get some extra services like call phones, access WiFi or send texts. You can pay as you go or buy a
subscription. Skype has marketing services, including advertising that allows businesses to market their products or services selectively to Skypes user base.
Now Microsoft has the opportunity to put Skype into as many platforms as possible. We do not know for sure how the company will do that, but you can take
a look at the possibilities

Skype Business Model Canvas

Skype Business Model Canvas

Skype Business Model Canvas

1. Customer segment
Skype has the mass market for the customer segment type. The distribution channels, value proposition, and customer relationship focus on one
large group of customers with similar needs & problems. The skype customers are internet users who want to communicate via internet. They can be
individual users or companies. A company can use Skype manager to manage their needs of Skypes features for meeting and other business requirements.
2. Value Proposition
Value propositions that the customers get are some features like send message, skype to skype, skype out, skype number, skype to go, skype connect,
video conference, conference calls, and communicate easier and cheaper. The users can send message via Skype to skype, make calls to non-skype number
via Skype out, use Skype number to make phone calls, make international calls via skype to go, use skype connect, use video conferences and conference
calls and pay cheaper (especially for the international calls), even free for some features, like send message, and other skype to skype communication
3. Channels
Channel is something that delivers the value proposition to the customer. Skype has some distribution channels, like the website (www.skype.com), the
mobile application, hardware, and skype manager for companies. The users can use Skype via the website or download the application for pc and mobiles.
The hardware is one of the channel too, since it is the main media to distribute the value for the customers. The hardware can be personal computers, tablets,
and handphones. For companies, they can use Skype manager to have them manage the features for the companys needs.
4. Customer Relationship
Skype has some customer relationships. They are personalized self service, payment of skype, skype subscription, and skype software download. The
personalized self service is a customer service that available to help you with your difficulties using Skype live online. Users also can pay for some extra
features and subscribe, and skype software that are downloaded by the users worldwide.

Skype Business Model Canvas

5. Revenue stream
The revenue streams that Skype has are credits and subscription from the users. Users can pay credit and subscriptions for some features and finally can use
the feature. Most of the users, especially companies do not mind to pay for some features since the feature help them to grow their businesses. Skype can also
get the revenue streams from companies that advertise their products on Skype
6. Key Resources
Skypes key resources are developers, skype brand, and software. The developers are important to Skypes development, since it developed the software and
the other things that support Skype and make it usable for the users. The brand itself is one of the key resource because Skype has its loyal customer that
already comfortable using it than using the competitors products.
7. Key activities
Skypes key activities are software development and customer service. Software development is one of the key activities because it is important to the
development of the company. Customer service is important too to mantain the relationship between the company and the customer and keep the the
customers loyalty.
8. Key partnership
Skype partners with several companies such as Microsoft, Telecom companies, Hardware manufacturers, and payment providers. Microsoft buys Skype on
2011. Skype also partners with hardware manufacturers such as LG electronics and panasonic to produce monitors that are connected to Skype that displays
high quality picture. Skype partners with Telecom companies and payment providers to pay for credits for feature like Skype out.
9. Cost structure

Skype Business Model Canvas

The cost structure is made of fixed cost and variable cost. The fixed cost is for building, machine,and the employees salary. The variable costs are software
development, marketing, customer service, partner fees, and telecom costs for the skype out features.
Relationship between value proposition keywords to the design of the map
Skypes users will get some value propositions from the product such as sending messages, skype to skype, skype out, skype number, skype to go,
skype connect, video conferences, and conference calls. With these features, skypes users can communicate easier and cheaper, especially for international
calls. To maintain the quality of the services that delivered to the users, the company must develop the software well and the customer service have to handle
the users complaints profesionally. Therefore, the company must recruit the best human resources for its development.
Relationship between target market characterisitic to your value proposition, and why you think you are better than competitor.
The Skypes target market is internet users worldwide who want to communicate via internet. They can be individual users or companies. With
Skype, people do not need to meet to see each other and pay high to make international calls anymore. They can send messages via skype, make phone calls
via skype to skype, and make video calls for free and pay a little bit more for extra services such as phone calls via skype out, access WiFi, and send texts.
What makes Skype better than the competitors are Skype offers voice call, phone call, video call, instant messaging, desktop sharing, and file sharing while
the competitors only offer some of it. For example: Google voice only offers voice call, phone call, and video call. Apple FaceTime only offers phone call and
video call. Facebook chat only offers instant messaging. GoToMeeting only offers video calls, instant messaging, and desktop sharing. Cisco WebEx only
offers video call, instant message, desktop sharing, and file sharing.

Skype Business Model Canvas

A table list on how key activities are derived from all activities needed to support customer relationships, channels and value propositions
No

Key Activities

Customer Relationship

Software development

- Skype software download

- Personalized self service

Channels
-

Customer service

- Personalized self service

Skype.com &
skype
application
Skype
manager for
companies

Skype.com &
skype
application
Skype
manager for
companies

Value Proposition
-

Send message
Skype to skype
Skype out
Skype number
Skype to go
Skype connect
Video conferences
Conference calls
Send message
Skype to skype
Skype out
Skype number
Skype to go
Skype connect
Video conferences
Conference calls
Communicate easier and
cheaper

A table lists on how each key activities is related to key resources, cost structure, and key partners
No

Key Activities

Key Resources

Cost Structure

Key Partners

Software development

- Software

- Customer service
- Telecom costs
- Software
development

- Microsoft
- Telecom companies
- Payment providers

Skype Business Model Canvas

2

Customer service

- Developers
- Skype brand
- Software

- Software
development
- Marketing
- Customer service

- Payment providers

Other Possible Revenue Stream

1. Skype map
2. Develop paid membership content
3. Sell chat stickers, frame and themes for the application
4. Sell sound fiters to add more fun to the conversations
5. Skype games

Skype Business Model Canvas

Relationship Matrix

Skype Business Model Canvas

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Skype Business Model Canvas

Table 1. Relationship Matrix

Notes:
S

: Strong Relationship

: Moderate/Medium Relationship

: Weak/Little/No Relationship

Patterns
The pattern of Skype is Freemium. Fremium stands for business models, mainly Web-based, that blend free basic services with paid premium services. The
freemium model is characterized by a large user base benefiting from a free, no-strings-attached offer. Most of these users never become paying customers,
only a small portion, usually less than 10 percent of all users, subscribe to the paid premium services. Skype is categorized as a Freemium business model
pattern for several reasons, such as:
1. Skype enables users to make calls via Internet. Free calls are fully routed through the Internet vased on-so-called peer to peer technology that employs
user hardware and the Internet as communications infrastructure.
2. Users pay only for calling landlines and mobile phones through a premium service called SkypeOut, which offers very low rates.

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Skype Business Model Canvas

Premium paid
services

FREE services

Mapping Environtments
Market

Market segments

Targeting people who communicate via Internet, for example: make international calls, chat, video calls, etc.
Indonesias increasing number of middle class income is a market growth potential. (+RS)

Forces
Market issues

Users who want to make calls, send message, video calls, and the other features that Skype had and doesnt want to
spend too much money (+VP)

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Skype Business Model Canvas

Needs and demands

People needs a high quality network so they can use the features well (+VP)

Switching cost

Skype is free of charge for basic feature and you can pay for premium features, similar with the competitor. Switching
brand is very easy. (-CS)

Revenue attractiveness

Skype has premium features that the customer must pay for it and Skype offers advertisement placement which gives
benefits to the revenue streams (+RS) but on the other hand is not pleasant for most customers. (-CS)

Industry

Supplier and other value

The software development is developed by the software developer (+VP)

Forces

chain actors

Hardware manufacturers that partners with Skype. (+KP)

Other content developer that develop the network, etc (+VP)

Stakeholders

Microsoft owns Skype and make Skype as built-in apps (+KP)

Competitors (incumbent)

Apple FaceTime application who already built-in in Apple devices so Apple users often prefer using it than other apps
(-CS)

Other competitors, like Google Voice, Facebook chat, GoToMeeting, and Cisco WebEx dont offer as much feature as
Skype does (+CS)

Skype brand (+CS)

New entrants (insurgents)

Other competitors that offers new features that Skype doesnt have (-RS)

Substitute products and

Cisco WebEx can be a substitute products since it offers almost all of Skypes features like video call, instant
messaging, desktop sharing, file sharing but they dont offer voice call and phone call (-RS)

services
Key

Technology trends

Trends in using internet to communicate is very promising. Event companies use it for video conference, etc. (+VP)

Trends

Regulatory trends

Information, technology, and communication regulation in Indonesia. (+VP)

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Skype Business Model Canvas

Societal and cultural trends

The number of people connected to the internet is increasing. Indonesian are using the internet more than ever and still
growing. (+VP)

Socioeconomic trends

The user can be any age category who want to make calls via internet (+CS)

Macro-

Global market condition

Recently at the first and second quarter of 2015, Indonesias economic growth is slowing down. (-RS)

economic

Capital market condition

Rupiah is weakening against the US Dollar. (-RS)

Skype already has loyal users (+CS)

The number of people who use internet is increasing and the internet infrastructure development is on progress in

forces

Economic infrastructures

Indonesia, mostly on area near Jakarta (+CS)

Commodities and other

Internet infrastructure development on rural areas is still limited. (-CS)

PCs, smartphones, webcams, earphones continue to have positive sales growth. (+VP)

resources

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Skype Business Model Canvas

Risk Mapping

Key
Risk by New entrants (Insurgent) (-RS)
Risk by Substitute products and services (-RS)
Risk by Global market condition (-RS)

Risk by Capital market condition (-RS)

From the risk map, we can conclude that:

Risk caused by new entrants (insurgent) has high impact and high probability, so Skype company should take immediate action to mitigate and
control the risk by developing features and make some trial promo for the premium features for example. Skype must keep update for the new
technologies too.
Risk caused by substitute products and services has high impact and high probability. This is a high risk problem, so Skype must mitigate and control
this risk by doing innovations for their features so the users will stick to them and wont use the other products.

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Skype Business Model Canvas

Risk caused by Global market condition has low impact and high probability so it is a medium risk problem. Skype must control this risk by making
strategies to overcome some global market conditions.
Risk caused by Capital market condition has low impact and high probability so it is a medium risk problem. Skype must control this risk by making
strategies that can reduce the effect from capital market condition problem.

New Alternative Future Business Model

Every company has to develop new alternative future business models. New alternative future business models are needed to develop the business in order to
solve the environment risk. Revenue stream can be reduced by these environmental risks. There are three drivers to be considered, there are customer-driven,
finance-diven, and multiple-epicenter driven. Customer-driven innovation is a innovation that based on customer needs, facilitated access, or increased
convenience. Finance-driven innovation is a innovation that driven by revenue stream, pricing mechanism, or reduced cost structures that affect other
business model building blocks. Multiple-epicenter driven is a innovation that is driven by multiple epicenters.
1. Customer-driven innovation
Alternative Future Business Model Canvas 1 explanation (Customer-Driven Innovation)
New business alternatives need to be developed to solve the problems that come from the environmental risks. The problems that come from the risks can
affect the revenue stream. It can decrease the users loyalty and reduce the revenue streams that the company get. The innovation that Skype plans to do is a
new feature called Skype translator. For more than one decade, Skype succesfully break geographical barrier to people who want to communicate and see
each others face. But there is another problem. Sometimes people cant communicate well because they still have a barrier. They are restricted by languages
that they dont understand from another countrys user. Using innovations from Microsoft Research, Skype will remove another barrier to make it possible for
people to communicate irrespective of what language they speak. Skype brings people together to make progress on what matters to them. Skype Translator
will open up endless possibilities for people around the world to connect, communicate and collaborate; people will no longer be hindered by geography and
language. They just have to say what they mean with their own language and Skype will translate it to be the other users language via text that appears on the
conversation bar.This innovation affects the revenue streams and key activities. For the revenue streams, if Skype put this feature on the premium feature,
Skype will get new source of revenue streams or if this feature is free and bulit-in in every feature of Skype , like you can use it while you make phone calls,
video calls, conference calls, etc, Skype will still get the revenue stream because some feature like make call to non-skype users (SkypeOut) is one of the
premium features which is not free.

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Skype Business Model Canvas

2. Finance-driven innovation
Alternative Future Business Model Canvas 2 explanation (Finance-Driven Innovation)
Plain chat message that only contains texts is so boring. There are many competitors that already did the innovation to add stickers features for chatting
features. More stickers that are available, more expressive the chat will be. To affect the revenue streams, Skype does not only offer free stickers but also sell
stickers to be purchased. The price doesnt have to be expensive. Maybe just around 1$-2$ for a pack of stickers. Also add celebritiy edition stickers or other
seasonal stickers that suit the situation that is happening that time. For example if it is World Cup time, sell Football players stickers edition. This innovation
affect many aspect on business model canvas, such as: key activities, cost structure, key resources, and revenue streams. On key activities, it affects the
software development. On cost structure, it add one more point, it is stickers designers that Skype has to pay. On key resources, it adds one ponit, it is sticker

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Skype Business Model Canvas

designer that has to design the stickers. On revenue streams, it affects credit & subscription that Skype get from the selling of the stickers.

3. Multiple epicenter-driven innovation

Alternative Future Business Model Canvas 3 explanation (Multiple epicenter-driven Innovation)
To affect more aspects on the business model canvas, Skype has to do the multiple epicenter-driven innovation. For example, Skype can develop a new

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Skype Business Model Canvas

feature called Skype game. It is a bulit-in feature that can be played by users. Users can play the game with one of their Skypes friend live. To make this
feature, it affects software development in key activities, add one point in key resources which is hire the game developers, add one point in cost structure to
pay the game developer, and get extra revenue stream from the bulit-in features inside the games that the users can purchased. Also Skype has to develop the
lighter version of their mobile apps, so users will not hesitate to install and use it on their phone, not only on their PC and tablets. This innovation affects
software development in key activities and add one point on customer segment. It is expand the customer segment more, not only people that use it on PC and
tablet but people will also use it with their handphone, even on their apple watch.

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Skype Business Model Canvas

References

http://blogs.skype.com/tag/innovation/
http://www.skype.com/
Business Model Generation by Alexander Osterwalder & Yves Pigneur

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Appendix

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Skype Business Model Canvas

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Skype Business Model Canvas

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