Cost and Convenience of Skype Enterprise

By David F. Carr  |  Posted 04-14-2009

Skype Comes to the Enterprise

UPDATE: eBay plans to spin off Skype in an IPO.

Skype has begun testing a connection to corporate Voice Over Internet Protocol systems, which is something that enterprises have been asking for years.

Although Skype and corporate VOIP systems share the goal of avoiding phone company toll charges by routing voice and video calls over Internet-based data networks, they don't automatically work together. Corporate IP PBX phone systems typically employ a standard called the Session Initiation Protocol (SIP) to set up calls, whereas Skype uses a proprietary protocol. Now the two worlds will be linked with a new product, Skype For SIP for Business Users, which is entering beta testing.

The system allows corporate users to use their desk phones to make outgoing calls that can be routed over Skype's network at its low rates (about 2 cents per minute for most locations around the world). Skype users will also be able to make free calls to participating companies, and the cost to the company will be a fraction of the cost of a traditional toll-free number, according to Skype.

Why didn't this happen sooner? Although Skype has sometimes cited technical barriers to integration, another reason was that until now Skype didn't feel ready to tackle the business market, said Stefan Oberg, Director of Skype for Business.

"All the way from the start, we said we were targeting the mass market consumer in our product development and the communication," he said, and the business built itself around consumers who were willing to set up their accounts via self service and download and install it on their own. "Business tends to want someone to come in and educate employees, install a video conference room, provide training, and be there if something goes wrong. We haven't been able to provide that support until now." Even though Skype will probably provide most of that corporate support through consulting partners, the company need to carve out the time to create those partnership programs, he said.

Despite the lack of explicit support for business use, Oberg said about 35 percent of Skype users surveyed said they use the service for business purposes. For example, a traveling executive can use his laptop and a headset to make Skype calls to colleagues who run Skype on their PCs back at the office. The difference is that with the Skype for SIP integration in place, he could also place calls to colleagues who don't use Skype, instead making the phone on their desk ring.

About 10 companies are already testing the system, Oberg said.

Cost and Convenience of Skype Enterprise

Skype expects the biggest application of the technology, at least initially, will be making outbound calls at lower rates. Businesses don't have to install any special hardware or software, but they will have to modify the configuration of their IP PBX systems, following technical specifications Skype is publishing as part of this program. They also have to establish a corporate account on Skype that will be used to connect calls to and from the Skype network. Product manager Antonio Varanda said the most common configuration will be a least-cost routing setup, where the PBX will automatically compare Skype's prices to those available from other carriers before connecting a call.

For inbound calling, companies could publish a Skype ID in addition to or instead of a toll free number, and Skype users would then be able to call in from anywhere in the world. Those inbound calls are free to companies participants in the beta, but commercial pricing will be announced when the beta is completed. Oberg would only say it will be a fraction of the per-minute cost for a traditional toll-free line.

Once the calls are routed into the corporate PBX, they can be managed by the same call queuing mechanisms as any other incoming call. One insurance company in France that has been working with Skype to test the possibilities now drives about 10 percent of its inbound calls over Skype, Oberg said. That should be attractive to companies that want to have a broad reach without the expense of setting up toll-free numbers in each local phone market, he said.

"I think they will get a pretty healthy response," said IDC analyst Rebecca Swensen, who believes Skype's offer will be attractive to some large enterprises, as well as small-to-medium sized businesses. "It isn't going to be a replacement type of solution, but it can be a supplementary solution to a [VOIP] solution already delivered to the enterprise."

Even though enterprises have been asking for SIP interoperability for years, she doesn't think Skype waited too long to take advantage of the opportunity. The Skype for Business solution will benefit from the years Skype invested in addressing consumer expectations, and it comes at a time when the lines between consumer and business technologies are blurring, Swensen noted. "Skype has developed a pretty solid interface, and this is a well-rounded solution. It's not just for cheap voice, but has many other capabilities."

Skype is a subsidiary of EBay, which purchased it in 2005 thinking to leverage it as a communication tool for users of the auction network. But those synergies never materialized, and recently CEO John Donahoe has acknowledged that Skype could be spun off as a separate business or sold.