Blog Post

Does Skype have Infrastructure?

Some sleuthing shows that it does…

One of the most amazing aspects of Skype has been this unshakeable belief that the company does not have any network infrastructure, barring a few directory servers and other more web-related boxes. In the early days Vonage offered same arguments – we don’t have network infrastructure – thus we are more efficient. More subscribers signed on, network outages began, and well there is infrastructure. And increasingly it costs money.

How can Skype be any different? After all despite its P2P nature, there needs to be some management. The edge can be smart, but hyper-smart? And given that it’s growing like weeds after a monsoon shower, I wondered how could Skype sustain the quality that endears Skype to its users.

I admit, after contemplating about this road, I put this on the back burner. I have been lately distracted by other stuff I am keen on these days, and have largely ignored the nuanced stuff lately. I am trying to rectify that. Fortunately for all of us, there are three men who did not believe – Aswath Rao, DG Lewis, and James Enck.

Lewis thinks that now that Skype had SkypeIn and SkypeOut, it needs to connect with PSTN, and that means hardware that would interface with partners like Colt, iBasis, and Cable & Wireless. He argued that since Skype uses a proprietary technology, it would at some point need to convert signals to more commonly used protocols.

Somewhere, SkypeOut traffic has to be converted from G.729a packets to G.711 A-law or mu-law TDM (and the reverse for SkypeIn). And somewhere, call control signaling has to be converted to some standard PSTN signaling for network interconnection.

Aswath then theorized:

My theory is that they treat the media gateways as Skype clients and so they “register” with a supernode, which are Skype’s own computers. These supernodes map Skype protocol to SIP. Here SIP is only a “trunking” protocol. So the mapping is not complex.

James, did more work, and chatted with his sources within the company and came up with this argument:

“It is my understanding from recent conversations with the company itself that Skype has built and deployed its own-spec gateways, and that supernode designation is far from a random selection process. Also, the now-famous “authentication server in Denmark” is not the only one of its kind.”

In final conclusion, there are signs that Skype has infrastructure, though details on it are hazy. Aswath puts it best when he writes,

For a long time Vonage and its apologists were claiming that they do not have any network infrastructure and are still able to offer voice service. It has stopped as the network failures became well known. Slowly it is becoming Skype’s turn.

9 Responses to “Does Skype have Infrastructure?”

  1. Wes

    boring as it might be, the damn laws of economics come in the way of progress sometimes. anyway i hope they make enough money to be around and put pressure on the competitors who will now have to be spectacularly brilliant in terms of offering services to consumers.

  2. Wes Felter

    Speaking of how to value Skype gives me a thought. The part of Skype that is free is free to run. The part of Skype that costs money, costs money to run. It’s so boring when you look at it that way, though…

  3. Wes,

    i think it is not a controversy, just a healthy debate. i suspect as they roll out more and more money making services – important for a corporation – they will be needing more of this infrastructure which is going to increase their hardware costs, and cost of operations. in other words we would have to value skype differently,

  4. Wes Felter

    The real question is what fraction of calls touch the infrastructure.

    For Vonage, every call touches their directory server, and I suspect 99% of calls go through their SIP-PSTN gateways.

    SkypeIn and SkypeOut calls must be handled like Vonage calls, but what fraction of pure Skype calls touch Skype-owned infrastructure? It could be a small number.

    I don’t see why there is any controversy over this. To connect to the PSTN you need some infrastructure somewhere (AFAIK); to claim otherwise is just not credible. Whether the infrastructure is owned by Skype or one of their partners doesn’t matter IMO; the customer is paying for it one way or the other.