Skype Outage Poses Challenges For Microsoft

Enterprise managers may have questions about hosted services in the wake of Skype's problems, and they need to think about whether to use consumer services for business tasks.

Frank Ohlhorst

June 3, 2011

4 Min Read
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Skype, the free Internet calling service, crashed last week and would not allow certain users to make calls or even log into their accounts. Users of both the free Skype service and the company's paid offerings were affected by the outage, which poses a challenge for Microsoft.

Skype representatives acknowledged the problem with a May 26 post on the Skype Twitter feed. "Some of you may have problems signing in to Skype and making calls. We're investigating and hope to have more details to share soon," the company wrote.

Service was restored rather quickly and the problem was attributed to a software client glitch. A Skype blog post provided instructions to resolve the problem just a few hours after the problem was reported. However, Skype's relatively quick resolution to the problem did not assuage all customers, especially those who use Skype's paid services for VoIP and video conferencing.

"I travel frequently and have come to rely on Skype to stay in contact with clients, business associates, and many others while on the road," said Ted Hunter, CEO of Champion Networks, a Portland, Maine-based technology consulting firm. "Even an outage of just a few hours can be unacceptable, especially if I have conferences scheduled during that period of time."

Skype's outage comes just a couple weeks after the company made headlines by being the target of an $8.5 billion acquisition bid by Microsoft. Once the deal closes later this year, Skype will become its own division at Microsoft under the direction of its CEO Tony Bates. Microsoft plans to integrate Skype into its Kinect motion-gaming peripheral, Windows Phone 7, and other platforms.

There was no word from Skype on how many users experienced the problem, but the company said it was likely a "small number."

Nevertheless, a failure such as Skype's could have a lasting impact on the adoption of hosted services. "As we create more and more reliance on cloud-based applications, storage, and overall basic business functions," said Darrel Bowman, CEO of, an IT services company, "we as IT service providers need to vet our cloud partners more thoroughly to ensure they actually have the redundancy we need and expect if their cloud offering is going to be successful for us and our clients in the long-term."

Bowman is echoing a key point that many will agree with--for a hosted service to be successful, it has to be reliable, especially as far as business use is concerned. Reliability is something Microsoft will need to be sure to provide, if the company hopes to bring Skype under its bandoleer of business services.

The repercussions of the failure go a little deeper for Microsoft, which is trying to promote its Lync platform as a next-generation unified communications platform. With Lync, Microsoft aims to incorporate several communications platforms into a unified offering, combining email, VoIP, video conferencing, POTs, IM, and other technologies into a singularly managed entity. Arguably, Skype would become an ingredient of Lync.

However, the Skype outage has created some doubts about its viability for business use, as well as a component of Lync. Evan Leonard, president of Chips Technology Group, a Microsoft Lync Partner, said via email "The problems over at Skype continues to show it is a consumer-based solution, where outages are more acceptable than a business-class solution. Lync, on the other hand, is built for business and can be deployed in a hosted and client location configuration, with failover capabilities to ensure connectivity. I would recommend that businesses chose a business-class solution and not rely on Skype for any critical business functions."

Bowman said Microsoft needs to take some steps to turn Skype into a business service. "For Microsoft to successfully integrate Skype into its business offerings, the company will have put in place some sort of guarantees that reliability is part of the equation, giving users the five 9s of up time that has come to be expected with today's business-level products," he said.

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