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Skype Ready For Business?

The voice-over-IP service's promise of free or low-cost calling and videoconferencing is music to SMB ears, but a lack of key business communication features should give business owners pause.

Free, free, free. That has been the promise of many new Internet technologies. Free is a word that Skype has used to attract customers to its voice over IP (VoIP) calling services, Recently, the company has been focusing on expanding its reach to corporations, so the question arises: Should small and midsize business take a look at these services? Yes, but with some caveats.

Skype is a proprietary telephony application that enables users to place calls over the Internet. Initially, the software was used for PC-to-PC communications but has gradually been enhanced so it runs on different systems.

"Skype services are quite popular in Europe," said Ken Agress, research director for Burton Group, a division of Gartner. The Luxembourg-based VoIP company made a name for itself by offering customers low cost international calling. In fact, its customers account for 12% of all international calls -- during peak periods more than 20 million Skype users are online.

Recently, the vendor has been focusing on the business market. "Skype has done a good job developing its customer base but needs to generate higher margins and become more profitable," said Jon Arnold, principal of J. Arnold & Associates.

Things To Consider

Businesses will find that the service has some attractive features. It is simple to use: generally, individuals can download the software and be making calls in a few minutes. It is inexpensive: in May, the service provider announced pricing plans for as little as one cent a minute. In addition, the carrier has been expanding its service portfolio: in January, the company made a push into the videoconferencing arena.

However, there are potential downsides with Skype. The fact that the technology is proprietary could scare away some users. Users need to download the software and put it on their computer, which can increase security issues. "Companies need to be wary that Skype could be used to overwhelm them with spam," stated Burton's Agress.

Initially, the service worked with only other Skype clients, but the vendor has enhanced its service so users can call anyone. However, some companies, fearing spam and malware, block all Skype calls at the firewall, which may limit a firm's ability to converse with customers and clients.

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