This lesson was driven home most recently when Nuance Communications acquired Swype, Inc., a small, company whose single product is software makes it simpler and faster to use your finger (or a stylus?) to enter text on a smartphone. According to this SEC filing and this comment by my associate Greg Sterling on Internet2Go, Nuance is committing something on the order of $100 million to merge Swype into its operations, presumably to add Swype capabilities to its Flex T9 interface.

In his post, Greg questions why Nuance needs to buy Swype, even as Flex T9 already outperforms Swype in some respects. He presents a list of possible answers to his question, including what I would call “the three P’s,” patents, positioning and personnel. But I would add a fourth: “Packaging.” Swype’s market proposition was simplicity itself: “Swype is a faster and easier way to input text on any screen.” That’s it. And it won over a following.

As for Nuance, it is following its time-tested modus operandi for constant improvement and refinement through acquisition. It’s been doing to bring specific refinements to its product portfolio automated speech processing – including voice biometrics, directory assistance/auto-attendant, text-to-speech rendering, dictation, medical transcription and other domains that benefit from solving specific problems. The core T9 technology came with the acquisition of Tegic from AOL-Time Warner in 2007 for $247 million. At the time I called it part of Nuance’s “Pay It Forward” strategy of constantly improving a mobile subscriber’s ability to take control of his or her device and the services provided through it.

For Nuance, it adds to its portfolio of technologies that support highly personalized mobile services. For Swype, it provides a windfall, liquidity event that satisfies its founders and investors. For those of us into pattern recognition, this acquisition is similar to the one that brought GroupMe – a year-and-a-half old, single-product company – into Microsoft/Skype’s pantheon of products and services. A journalist at the International Business Times-Australia accurately referred to GroupMe as “a super-small, zero-revenue tech company founded only last year at the Techcrunch Disrupt Hackathon.”

So why did GroupMe fetch a multi-million price (rumored to be between $65 and $78 million) from Microsoft? The resemblance to the Nuance/Swype deal is striking. First, GroupMe solves a known problem confronted by millions of mobile users as they try to form small groups on the fly. Or as GroupMe puts it on its Home Page: “Group Messaging from Any Phone.” Second, it’s not an “app,” it’s part of the user interface. It can be generalized across multiple modes and media. As we’ve learned with Google+ and, with some difficulty on Facebook or LinkedIn, we humans benefit from group-forming utilities. GroupMe’s core product may be the result of a mere eight hours at a TechCrunch Hackathon (using Twilio’s tools on Amazon Web Services EC2, incidentally) but it fulfilled a recognized Gap in Skype’s mobile user interface.

The acquisition enhances the Microsoft/Skype e-services genome. It’s a grand slam home run for GroupMe. From the mobile subscriber’s point of view, it improves his or her ability to take control of their device and the services it offers. See the pattern?

This means that the lawyers (and investors led by Silver Lake) are prevailing and the prospect Skype operating a “cloud-based” platform for application developers and go-to-market partners is becoming slim. Meanwhile, we can look forward to a Skype handset and a few locked-down relationships with network operators like Verizon.

It was founded in early 2006 to provide an application development environment (of “platform”) that made it easy to add telecom and messaging features to Web pages and Web services. They used a RESTful programming environment (with tools like Flex, Flash, Java, PHP, along with Microsoft’s .Net and Silverlight) to build “recombinant apps” that leverage APIs, including Skype Connect and XMPP (now embedded into GoogleTalk).

The first apps, which were made available right about the time of the acquisition, were Ribbit Mobile (which competed directly with Google Voice, but worked with existing numbers) and Ribbit for Salesforce (which provided a tight integration between Ribbit’s voicemail, text, and call handling capabilities and Salesforce’s cloud-based management of contacts and opportunities).

Word has it (this is where I may be overstating what’s really going on) that BT is taking Ribbit “internal”. That means it is less of an “exposure layer” to enable 3rd party developers or enterprise IT folks to build their own solutions and more of an application manufacturing resource for BT’s personnel to develop and deliver ready-made solutions. Ribbit Mobile, Ribbit for Salesforce and a more recently added “Bring Your Own Network” offering are the pre-fabricated service offerings that shorten the lead-time for BT and carrier partners to deliver features and services that employ Ribbit or BT’s IP-based network. After an encouraging start (purchasing Ribbit two years ago), BT remains pretty much a monolith.

Meanwhile, the move toward higher flexibility and open sourcing of application components and cloud-based resources appears to be accelerating. As I noted in previous posts on this site, Orange is very committed to its “Open Source Mobile Widget Program”, which is arguably more granular and more developer-friendly than the BT/Ribbit “bring-your-own-network” approach.

More reently, IBM, with its “Cloud Service Provider Platform”, is doing its best to help incumbent carriers transform themselves into reliable IP- or cloud-based, service delivery platforms. This represents an opportunity to move ever-closer to role of offering a highly-reliable, capacious and feature-rich “services grid”, which is a construct we strongly urge carriers, system integrators, application developers and enterprise customers to take a long, hard look at.

Ultimately, everyone is getting poised for competition “on the glass.” In the enterprise setting it’s a “battle for the desktop”, where applications and features are presented in portals that include feeds, softphones and most-favored applications. Because “the glass” extends to mobile devices, BT and Ribbit were being far-sighted when they made Ribbit Mobile one of their first commercial offerings.

The latest cohort of RC app developers is dealing with a riddle that has plagued the IVR (interactive voice response) and ASR (automated speech recognition) community dating back to the late 1990s. Enterprise customers say that they want flexible tools and application development environments (ADEs) in order to generate custom solutions that bring competitive advantage. Yet, what they often want is a trusted vendor (or resource) that provides an inventory of pre-fabricated solutions that help them bring new products or services to their customers quickly and reliably.

In the world of speech applications, it’s a lesson that the likes of Apptera, TuVox or Voxify have learned as they morphed into providers of specific applications rather than mere tools providers. I think the enterprise demand for reliable solutions to specific problems is driving demand for custom applications, built from well-understood components and running on rock-solid lower layer network resources. That means BT’s approach (bringing Ribbit in-house) may accomplish both near-term and long-term goals.

No financial (and precious few technical) details were provided today, but the result of the alliance is that Avaya can respond to a long-standing demand from existing customers to support low-cost long distance service over the Internet via Skype. The two companies have been working “in parallel” (to quote Avaya’s Alan Baratz) for some time now. Indeed, support of Avaya-branded PBXs were core to the launch of Skype Connect back in August. In addition, because both companies reside in the investment portfolio of Silverlake Partners, a tighter alliance has been long anticipated.

Now that the two companies are overtly working together, Avaya customers are being prepped to expect a package of solutions that will make it easier to use a broader array of Avaya-branded resources to control who, where and how their employees can have their voice calls carried over Skype. The roster of “session management” resources in play includes the Avaya Aura™ Session Manager or Avaya Aura SIP Enablement Server, as well as the CS1000, Avaya IP Office, or BCM (for those Nortel customers now supported by Avaya). Note that overall Quality of Service (QoS) for calls carried over the Internet cannot be guaranteed by any of the session initiation resources.

Avaya plays an important role in the process of “enterprise hardening” Skype. Avaya’s elements will handle important functions around security and regulatory compliance allowing Skype to fulfill its long-standing role as a network for cheap long-distance and international calls. As the technology roadmap takes shape, the two companies are talking about support of contact center functions, eventually including support of work-at-home agents.

According to Alan Baratz, who heads Avaya Global Communications Solutions, Avaya’s customers are just beginning to make their move to Aura and the Session Enablement Server, so this announcement may not have as wide-reaching impact as it suggests. In addition, the tactical decision to confine roll-out to North America will also put a lid on its global dimensions. The lack of mature standards for interoperable videoconferencing and federated IM will also serve as speedbumps when it comes time to deploy solutions in 2011.

Meanwhile, enterprise migration to IP-telephony is destined to accelerate organically. Competiting infrastructure providers Cisco and Alcatel-Lucent are articulating strategies to bear that seem more “open” and developer-friendly. But the power of the Skype brand and its popularity among a loyal following of 125 million “active” users serves as a ready-made base of users who are familiar (and in most cases quite pleased) with the service.

BTW: Elsewhere in the social and mobile realm, Skype is doing some “deep integration” with Facebook, as noted by Greg Sterling here.

The Google Voice landing page lists the primary features as “One Number” (for all your phones), “Online Voicemail” (that behaves like email) and “Cheap calls” (which are actually free in the U.S. and Canada). Yet I think that those features are listed in reverse order of importance to folks that are generally unacquainted with VoIP services, call management and the joys of automated transcription of voicemail messages.

Of the dozen of so people I’ve invited to use Google Voice, those of us who use it to make free calls to Canada are the happiest. Most of the others have either not used the service at all, or occasionally give out their “Google Voice” number to people with whom they are carrying out business. After a few months of using the service, most don’t know their Google Voice number by heart (I know I don’t). Recent invitees have been able to pick a vanity number (like ones that include their names) that they find easier memorize.

With cheap calling as the primary reason people register for Google Voice, it is on a collision course with Skype when it comes to growing the user base for enhanced VoIP services. Indeed, it is probably not a coincidence that Skype chose this day to open its waiting list for “Skypekit” a library of software and API’s to help application developers integrate Skype into their offerings for all sorts of devices and mobile platforms.

Stepped up activity surrounding Google Voice and Skype will lead other “cloud based” telephony platforms (like IfByPhone and Bandwidth.com, among others) to step up their game. Thus the second half of 2010 should emerge as a golden age for phone apps. With newbies entering the market both as customers and as application developers, the best counsel I can provide is to say (as I have in the past), “The difference between a brilliant phone app and a stupid phone trick is the attention paid to the quality of the user experience.”

The description of the range of services to be offered sounds exactly like the Skype application offered on the iPhone. The most salient difference will be that the app will be running constantly in background on the nine devices described (which is not possible on the iPhone). It also marks the symbolic end to Verizon’s (as well as its wireless cohort’s) long-standing concern that VoIP services offered over the data link will cannibalize their core voice revenues. John Stratton, Verizon’s Chief Marketing Officer, told attendees of the Mobile World Congress that he was not concerned about either erosion of the voice traffic on its network or a decline in quality that would result from congestion caused by massive demand for Voice-over-3G.

Stratton said that the application was jointly developed from the ground up, leaving many details up for interpretation. My own belief is that the always-on Skype will be “link agile” using WiFi when available, 3G in some cases or the Verizon cell network if required to sustain qualities. At least that’s how I would architect the service given that subscribers must contract with Verizon for one of its Voice and Data plans. According to an article by Roger Chen in the Wall Street Journal, the “cheapest monthly voice plan now costs $40 for 450 minutes, and a $30 data plan is required with any smart phone.” So you may as well make the best use of all the links you can.

As for the impact on the wireless VoIP world at large, the application seems underwhelming. Sure it rattles AT&T Mobility’s cage by offering a nailed up voice-over-3G service one week after AT&T made it clear that it would continue its WiFi only approach. Yet, the range of services that are offered have an entry-level feeling to them. Meanwhile, Mobile World Congress was brimming with some really impressive X-over-wireless-IP services. Of special interest to me is a “video calling over the Internet” offered through the iTunes store by Fring and this intriguing voice-to-voice universal translator service offered by wireless personal assistant specialist VoxOx.

Harking back to my post about “satsificing”, I’m not sure that any of the services will work at high-levels of quality in all instances, but they are working well enough to make them ready for prime time.

It was a move that, among other objectives, aimed to please FCC Chairman Julius Genachowski, who is also quoted in TWICE, commending “Apple’s decision to open its platform to 3G calling, an action that will create new opportunities for entrepreneurs and provide more choices for consumers.” The immediate beneficiary is Connecticut-based iCall, which has added “free phone calls” from the iPhone to a roster of free or low-cost voice calls using PCs running specified versions of Windows, Linux or MacOS.

According to reports Fring has already joined iCall in the AppStore, while Skype says its app is ready but waiting for a few tests and modifications to be complete. The move dramatizes the opportunities presented by iPhone while, at the same time showcasing how opportunities can be created or destroyed at the whim of Apple’s policymakers. At this point, just a few days after Google launched its Web-based access to Google Voice features, there is no turning back, and charging forward means that new features and functions are bound to augment vanilla, free long-distance.

The phrase “over-the-top” suggests a level of extravagance (think of “over the top” entertainment). Yet, during the past 10 years it has become synonymous with “cheap international calls”. In 2010, I expect OTT to return to form and refer to all sorts of value-added services and innovations, whose providers take advantage of those “cheap” or “free” minutes to take VoIP “beyond customary boundaries” (which happens to be one of the Dictionary.com definitions for “over the top”). Avaya and 02 are seeing the same trend, and we can expect a stream of acquisitions, partnerships and innovative service offerings that take incumbent carriers and traditional enterprise infrastructure providers over-the-top and outside their comfort zone. Case in point: BT with Ribbit.

Avaya’s overall message to the marketplace is that it is simplifying enterprise telephony and communications. Indeed, it has cleaned up its catalog of business communications solutions and it has created a new architecture, Aura, that is more conducive to embedding key components of voice processing, call processing, database management, analytics and reporting neatly into either the IP-based cloud. The approach is deceptively simple, meaning that there are a lot of moving parts. Absorbing Nortel and phasing out the Nortel brand adds one more level of complexity to the solution delivery process.

Now that Nortel and Skype share a major investor, Silver Lake, Olga Kharif in BusinessWeek reports here that executives from the two companies are “in talks” to determine how the two companies can better work together. Both Nortel and Avaya were heavily vested in IP-based “unified communications” strategies, putting emphasis on client-side management of presence, instant messaging and collaboration. Both had formal relationships with both Microsoft, to support Office Communicator and IBM for its UC Squared line up.

Having a SIP-based network to support inexpensive Internet-based voice calls independent of IT vendors might play well as a “simple solution” during the Nortel-to-Avaya transitional period (which will last years). We’ll certainly be watching the development of Avaya’s product roadmap to see where there is room for Skype.

As part of the Skype for SIP open beta program, Skype has created a low introductory price for the monthly channel subscription of $6.95 per month. According to Phil Wolff’s post, the going rate for Skype Out is $0.2.1 per minute in 36 countries.