How Skype Plans to Dominate Business Telephony

31 Comments

skype_logoSkype, a division of eBay (s EBAY), is likely to announce tomorrow that the beta version of its Skype for SIP offering will interoperate with Cisco Systems’ Unified Communications 500 system. This follows closely on the heels of similar arrangements struck by Skype with Shoretel and SIPfoundry’s sipXecs platform. In addition, the company is said to be working with Avaya, a major enterprise telephony equipment provider. These are a few of the many moves being made by Skype to expand its business to the corporate market.

Skype for SIP was announced in March 2009; it was criticized by competitors and others for being mostly vaporware and a generally ill-conceived product. Skype, of course, feels otherwise. “There are a lot of companies that are looking for paid and supported versions of Skype,” said CEO Josh Silverman in a conversation last week. “People are using it for in-enterprise video calling.” The company is working on developing an enterprise version and an enterprise license, Silverman explained.

“We are pretty big on video calling,” Silverman told me. The company is putting a lot of resources into building a better video conferencing experience, he said, because he believes that person-to-person video calling is going to be as big as video. That absolutely makes sense because today the definition of communication is constantly changing. In the past, the world was all about voice, then instant messages and now video calling. People are sending messages and status updates via Twitter and Facebook. The communications are now multimodal.

While he wouldn’t get into product specifics, Silverman dropped enough hints about Skype’s enterprise future. “We are working to develop an enterprise software product that is built around productivity vs. simply cost savings,” he said. That’s a very telling statement: At present, Skype’s only utility is that it’s a cheap calling service that can leverage about 480 million subscribers and its ability to buy long distance minutes on the cheap.

One of the reasons Skype is popular with corporate users is because it’s fairly easy to use; making face-to-face video calls for free via Skype is simple. The GigaOM Network uses Skype to conduct most of its business with members of our team who are in remote locations.

Related: Last week, I had a lengthy conversation with CEO Josh Silverman about his plans for Skype in the coming years. In the first part of the conversation, Josh discussed his lobbying efforts to get Skype working over 3G networks.

31 Comments

Mick

Note on call Quality:
Don’t confuse the call quality when calling through the Skype client on your computer with the quality of a SIP solution. The SIP is sooooooo much more stable. The call quality on the Skype client on you computer is depending on your computer power, your broadband capability etc.

Rick

Who would put their business on Skype when they could get the rug pulled out from under them on the flip of a switch!? Founders as good as mafia men.

Paul

The perception of Skype is that of a consumer tool that connects penniless young folks for free, but for many business users it is pretty powerful productivity tool.

Seeing when people are available, being able to IM them to set up a convenient call, sending URLs and text instantly during a call (the latter is great for bridging language barriers), screen share, conference calls and file transfer all make Skype a productivity tool, not just a cost reducer. And that’s before video, which may prove to be better for maintaining relationships than for building them.

Skype (in fact, much of VOIP) does have some call quality problems, but the good calls are much better than POTS (Skype’s consumer focus and low-cost architecture let them use wideband codecs for richer voice).

The gap between brand image and product capability/use is huge. I hope Skype’s marketing department is up to the challenge.

David Evans

Now that Skype on Mac has some parity with windows I’m liking it ok, although iChat is still much better.

Didn’t skype just shut down their developer network? They have failed to bolt on so many interesting things to Skype, and now going after the business segment, after so many years? Desperate times, desparate measures. Good look going up against Cisco.

eBay screwed up big time, Jajah is getting some serious traction these days and Gizmo never really took off. Interesting times indeed.

Of course Yahoo messenger is my favorite app when it comes down to it. It just works, nobody getting sued and making bonehead business decisions and it does everything skype does and more.

Sanjeev

I am using Skype since a long time and performance wise it is really awesome but yes, It is a bit bulky. If they can make something like “Skype Light” for normal usage will definitely help them in future. Video calling is really going to be as big as video, now a days normal people are also preferring video calling.

Mike

The open source communications platform sipXecs already has their Skype for SIP connection template built and tested.

Now if Skype would just get with the program and turn on SIP for the masses we’ll be good to go. When is that going to happen?

-Mike

Ankur Jain

Om,

Is Skype still part of eBay? (it is mentioned in the first line of your blog post)

-Ankur

Anonymous

Good to see Skype plugging into enterprise voice solutions. I have been using Skype for almost two years for my voice/video conferences and found it to improve my productivity. I would love to see easy access to LDAP, Cal & Outlook. Skype may win as ease of “Click and call” IMO would drive adoption. It would be much better option than pick up the phone, punch in #s and dial. Laptop is my desk-phone now and will be there as long as use laptop.

It would be interesting to see what business model would emerge as Skype interoperates with different enterprise systems.

Jaysan

On 1-1 video: let’s face it – the learned behavior of some amount of anonymity (visual in this case) in one-on-one tele-communications is difficult to break through. I think the barriers to adoption will be lessened by allowing users to use some form of avatars instead. but preferably in a form that maintains the outlines of the users’ visual and body language while masking true fidelity.

that (in)famous a-ha video of the eighties where band members were depicted as charcoal sketches in a comic strip comes to mind.

John

I agree with you JD some people feel that way, however it’s growing more and more popular. I love skype but it has it’s limits considering its voip which is sometimes poor quality and only skype to skype is free. For everything else I have to use my conference calling service which is also free and not mention reliable!

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