Enter Redmond

So the hype surrounding Microsoft's entry into the VoIP race has already burned through its second stage.
First, there was the announcement: Microsoft's chief executive Steve Ballmer had unveiled a mobile version of the software giant's voice-capable business IM system, Microsoft Office Communicator at 3GSM.

Some believed that this Skype-style free internet voice service for mobile phones could, essentially, kill companies like Vodafone.

Then a day or two passed, and Vodafone's stock held steady. What gives?

Seems analysts were unimpressed. Talk went along the lines of, okay, so they have a client now, so what? Is there a 3G version? Techworld had a nice piece featuring an analyst from Disruptive Analysis. It's too good not to quote: "The main importance of the announcement is to show that mobile VoIP is now important enough for a sluggish brute like Microsoft to lurch aboard, said Bubley: "The history of Microsoft has been to leave it up to third party developers, and then move in when it is important enough. It's instituionalised mobile VoIP."

Good on MSFT to show us that VoIP had reached prime time, something we've been saying for many, many, many months.

The open question, now that the opening salvo has been fired, is what Microsoft will do next.

And also, what AOL will do next. Looks like AOL and MSFT are chasing the same market: business-class users that like the chat function of the various IM products, and get how taking it to the mobile VoIP level would be a good idea.

Without going out too far on a limb, it's safe to say that Microsoft, not to mention Yahoo, AOL, Skype, Vonage (with its IPO pending), and many others have ushered in the mobile VoIP era.

Microsoft's primary option would be an Office bundling (Office is its cash cow, after all, after Windows) which would take VoIP to the streets. AOL is still struggling to justify its existence in a post-we-are-no-longer-the-top-dog-at-Time-Warner-era. For them, VoIP's a good play in its rapidly eroding proprietary-Internet play. Skype and Vonage will be the ones to beat in the open market, as will Yahoo, and perhaps, in time, Google.

Personally, I can't really see how Microsoft can mess up an Office integration, except for the fact that the savvier the market gets, the more people migrate away from closed systems.

On the other hand, packaged products continue to have their appeal, and the more successful MSFT is at making VoIP integration completely transparent, easy to use, and virtually cost-free, then that will be how Redmond claws into the VoIP space. Witness how they killed a third of Netscape's business, and how they took on Quicken.

Of course, Netscape and Intuit are still around, the former in radically changed form, and the latter less so.

Proving that Microsoft can't kill every space it targets, can't dominate on demand, and can't prevent nimble competition from flanking it at will.

It's Goliath. And there's lots of Davids.