Will Amazon Chime Steal Share from Skype and UCaaS Providers?

Amazon's entry last week into the crowded universal communications fray with the launch of its Chime service could pose a challenge to the likes of Microsoft's Skype for Business, Google Voice and a swath of fast-growing players such as Twilio, Bandwidth and Bluejeans, among numerous others. However, a quick look at the initial service suggests it has no obvious technical advantage over its rivals, hence it's not immediately likely to attract enterprises that use VoIP and UC offerings from Cisco, Avaya or Microsoft.

Anyone who has followed Amazon's meteoric growth over the past two decades knows not to take a blind eye to the company's track record in upsetting most -- though not all -- of the industries it has invested heavily in. Chime comes out of the company's AWS cloud business though technically it's available to consumers and businesses. I was able to create an account using my Amazon Prime credentials. And if you look at the success the company's retail business had with its Echo and Dash intelligent devices that respond to voice commands, one can imagine the possibilities Amazon might have up its sleeve.

The company has released three packages: the free version offers chatrooms and allows video calls between two parties; the "Plus" plan, priced at $2.50, adds to that screen sharing and access to a corporate directory; and the "Pro" package, which costs $15 per month, allows meetings between up to 100 participants. Scott Gode, VP of products at Seattle-based Unify Square, a longtime provider of management services for large Microsoft Skype for Business customers, said Amazon's pricing is comparable with the cost of services offered by other UC providers.

"It's very much akin to unified communications-as-a-service providers that are out there and similar to the pricing that Microsoft offers as well," Gode said. "The big difference Microsoft has is it's bundled together with Office 365, whereas the Amazon stuff -- even though its backend is on AWS -- has a standalone pricing model."

Telecommunications service provider analyst Irwin Lazar, a VP at Chicago-based Nemertes Research, agreed that Chime lacks the integration Microsoft's Skype for Business offers with Office 365. But he believes over time that could change. Likewise, Lazar believes Amazon is looking to challenge Google's G Suite. "Ultimately I think their goal is to compete with Office 365 and G Suite. But they have a long way to go," Lazar said. "The biggest immediate impact is potentially downward price pressure on the Web conferencing providers," including PGi, GoToMeeting, Zoom, BlueJeans and Cisco's WebEx, among others.

While AWS runs the world's largest cloud infrastructure, the company hasn't focused on communications and networking services. To boost its entry into the Universal Communications as a Service (UCaaS) market, AWS has partnered with network backbone provider Level 3 Communications and Vonage. Amazon signaled its interest in jumping into the market late last year when the company acquired San Francisco-based Biba, a chat, video and audio conferencing tools provider, a year after buying video signal processing company Elemental for just under $300 million.

Lazar noted that many UCaaS providers that Chime will now compete with run their services on AWS. "But Cisco, Google, and Microsoft have pretty robust cloud infrastructures of their own, so I don't think AWS gives them any real advantage," he said.

Posted by Jeffrey Schwartz on 02/24/2017 at 1:21 PM