Innovation and New Product Development Case Study

VOIP, SKYPE AND THE DISRUPTIVE TELECOM REVOLUTION

OR

Abstract:
In 'Disruptive Technology' as a management terminology gained popularity amongst practitioners, analysts and more so among academicians, as digital technology continued changing at a scorching rate affecting businesses - old or new alike. This case looks at one such disruption - VoIP (Voice over Internet Protocol) and its impact on the trillion-dollar telecom firms, the Cable Service Providers (CSP's) and the emerging net-giants. Traditional valuation models failed to justify valuations of disruptive technology as it emerges - however that does not deter established players, operating in technology areas acquiring privately held start-ups, having any resemblance to disruption for apparently phenomenal valuations. With reference to the acquisition of Luxembourg-based VoIP leader Skype, by eBay, this case presents the revolution in the communication industry in light of VoIP, and focuses on valuation methodologies. A challenge for managers is to absorb and adopt disruptive technology on an ex-ante basis, this case highlights the issues and challenges in identifying disruptive opportunities on a real time framework, and how disruptive opportunities impact the business models of traditional players and emerging entrants, and also finds the response from traditional leaders to emerging players, specifically in telecom, to take on and / or exploit VoIP.

Pedagogical Objectives:

Keywords :  Skype, eBay, Telecommunication, Disruptive technology, Broadband, PayPal, Convergence, Connectivity, Yahoo!, Microsoft, Google, Networking, Wireless, Cisco, Verizon