Skype Ready For Business?

Skype

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.

Skype

Like many Internet-based services, Skype can have outages. In January 2010, the service was down for 3.5 hours. In August 2007, it was down for 36 hours. While the company claims to be working on the problems, assuring 100% uptime can be problematic.

The fact that calls run over the Internet increases the likelihood of reliability issues. Unlike the old phone network where end-to-end connections are guaranteed, calls are routed along Internet lines whenever bandwidth becomes available. If calls are made during heavy traffic periods, problems, such as latency, interruptions, or even dropped calls, can occur.

Third-Party Vendors Step In

The basic service is missing many features that businesses need, but consumers can often get along without. For instance, Skype does not support 911 calls.

In some cases, the needed features are available for an additional charge from Skype. For instance, customers can pay extra for caller ID. In other cases corporations have to go to a third party to fill the void. Pamela Systems offers automatic call recording, an answering machine for voice and video calls, automated chat reply (if a person is not available), Skype voice mail management, and e-mail forwarding of audio files.

As mentioned, Skype has recently started hosting videoconferences and some companies may want to archive such sessions. HotRecorder, which works with Google Talk and other instant messaging clients, allows searchable meta text to be added to each recording. A selection of emotisounds, such as laughs and claps, can be inserted into the conversation for later podcasting.

Helpful, But Not A Panacea

Overall, observers say Skype can be helpful but is not a small and midsize business communications panacea. "Skype is not robust enough so a business can use it for all of its voice needs," concluded J. Arnold & Associates' Arnold. "However, it can serve as a nice compliment -- say for low cost international calls -- to a company's existing calling functions."

For Further Reading

-- Skype Plans $100 Million IPO

-- Intermedia Adds Cloud PBX Service

-- Bandwidth.com Enhances Voice Servicess

-- Ringio Enhances Cloud Based Voice Service

Paul Korzeniowski is a freelance writer who has been writing about networking issues for two decades. His work has appeared in Business 2.0, Entrepreneur, Investors Business Daily, Newsweek, and Information Week. He is based in Sudbury, Mass. and can be reached at [email protected].