Most people I know who use Skype didn't have a video/computer calling solution before Skype. The barrier to installation for a new service that is much lower th

Most people I know who use Skype didn't have a video/computer calling solution before Skype. The barrier to installation for a new service that is much lower than switching to a competing service. If they're just getting into that kind of service, the benefits are quite large. Switching to a competing service has much less utility to them, because they already have a solution for the main problem; in this example, calling people. Switching requires losing their old contacts (network effect) as well as learning a new system. To put it in equation: Installing something like skype for the first time: Total utility of program - hassle of installing and learning a new program = large benefit Installing a competitor: Marginal utility of somewhat better program - previously available contacts on old system - hassle of installing and learning a new program = much less benefit