The voice-over-Internet service can help SMBs save money, especially on overseas calls, but you need to understand the risks involved to make an informed decision.
Recession-battered small businesses looking for an edge can now find one even if only a small one in Skype, the low-or-no-cost voice-over-Internet service that until now has mainly been of interest to consumers.
Skype, launched in Europe in 2003 but acquired three years ago by eBay, offers free voice and video calling between Internet-connected computers running the Skype software and equipped with microphone and speakers or a plug-in telephone headset.
The Skype software is also an instant messaging (IM) client similar to Microsoft Windows Live or Yahoo Messenger, delivering presence information showing which of your contacts is online and available.
The company makes money by selling premium services, such as voice mail, SkypeIn (a number that people with regular phones can use to call you on your computer via Skype), and very low-cost calling from computers to regular landline phones and cell phones (SkypeOut).
The SkypeOut Unlimited World plan, for example, offers unlimited calling to landlines in over 40 countries including virtually all developed and some developing countries for $12.95 a month. An unlimited U.S. and Canada plan costs $2.95.
A SkypeIn number, available for 45 U.S. states and 20 other countries, costs $18 for three months or $60 a year, with 50 percent off if you also buy a SkypeOut subscription.
Skype for Business
Skype was originally designed for individual use, but the company also offers Business Control Panel, an online utility that makes it easier for a company to provision and manage SkypeOut and SkypeIn accounts for multiple employees.
Third-party suppliers also offer appliances for integrating Skype with an existing office phone system. And now Skype itself is jumping into this market.
The company is currently beta testing technology that will allow an IP PBX (private branch exchange) that uses the session initiation protocol (SIP) to route calls made on a regular phone in the office over Skype.
Skype likes to point out that more than 30 percent of its global user base uses the service for business. However, its likely that a greater proportion of business use is overseas and that a much smaller percentage of business users have integrated Skype with their office systems, or use it for most of their calling.
I think a number of small to medium-size companies are leveraging Skype in limited capacity, said Jayanth Angl, a senior research analyst at Info-Tech Research Group Inc. But in most cases, its not a core service that the enterprise relies on.
Still, in a 2007 survey by Skype of 250 companies using the service, 95 percent claimed to have saved on telecommunications costs and 80 percent said using it increased employee productivity. A majority also agreed that using Skype helped them communicate better with customers and to work more closely with colleagues.
A Strategic Tool
Skypes unified communications capabilities mean it can make sense for other reasons as well. For example, at Brightstorm Inc., a San Francisco start-up that produces distance learning videos for high school SAT and ACT students and streams them over the Internet, Skype is a strategic tool. Its not the only phone service they use, but its vital.
Brightstorm recruits charismatic, personable classroom teachers from all over the country to teach its video courses. With prospects outside the Bay area, the selection process culminates in a Skype video call in which the teacher auditions.
You can imagine the investment of time and dollars if we had to fly to Boston or Denver to meet these people in person to evaluate if they were great teachers, said co-founder and CEO Jeff Marshall.
Its more than just cost avoidance, though. In-person is not the medium in which we want to test them, Marshall points out. Its how well they do on camera. We use pretty high-end video cameras to shoot the lessons, but a Web cam is a better proxy of that than doing it in person.
Brightstorm also works with outsourced software engineers in Costa Rica to build its slick Web site. The companys chief technology officer in San Francisco is in constant contact with them using Skype IM, and occasionally voice and video.
The company estimates it saves between 30 and 70 percent by using off-shore programming talent. For a company like ours, where the technology build is a non-trivial undertaking, its a pretty significant savings, Marshall said.
And having Skype available to smooth communications is critical. Often the challenge with outsourcing overseas is that cultural barriers, language barriers and time-zone barriers outweigh benefits, he said. Any tool that helps mitigate those risks is very, very valuable.
Whats the Catch?
So if Skype is such a great free or very low-cost tool, why arent more businesses using it? Skype works over the open, often congested, Internet and employs peer-to-peer technology that involves other Skypers computers to help route calls.
For this reason, call and connection quality are not always as good as they are on the public switched telephone network (PSTN) or even on VoIP (voice over Internet protocol) services that use some of the same IP voice technology as Skype, but run over private networks. Security is also a concern.
Skype does not offer a service level agreement (SLA), which many other business telecom providers do, warranting that service will be available and quality good, often at risk of financial penalties to the provider. Skype in effect guarantees only best effort.
For small, budget-minded companies, using Skype some of the time may be a risk worth taking. Even if it is a little glitchy or static-y, were used to making compromises, Marshall said of his young company. If the voice connection is less than perfect, thats not what were most concerned about.
In fact, Skype has worked well for Brightstorm. Hes not among the front-line users in his organization, Marshall said, but he does not hear complaints about Skype from those who are. Its meeting the need.
What are the possible downside risks for other organizations? There are a few.
On a bad Skype call, voices may break up, occasionally to the point of not being able to continue the conversation. And sometimes there will be latency a noticeable lag in the signal reaching its destination, which makes for awkward, stilted conversations.
That said, on good Skype calls, voice quality is in fact better than on a regular phone call because Skype uses wide-band technology that sends twice as much audio information as the PSTN or most VoIP services. Voices sound fuller, less tinny, more realistic.
And many people and even some critics are often surprised at how good and consistently good Skype has become. Connections so poor that intelligible conversation is impossible have become much rarer.
Skype is attractive because it is very good quality compared to other similar services, noted Angl. (Hes referring to services such as Gizmo5, Google Talk and Yahoo Messenger with voice.)
Security and Reliability
Angls firm, however, has more often urged clients to exercise caution when considering using Skype. Another reliability concern, he said, is that the service could go down completely. It has happened before, he pointed out, referring to a two-day outage in August 2007. It could happen again.
The far greater concern is security. Its not so much the risk that Skype conversations could be intercepted and proprietary information divulged. Its more the threat that the IM client could infect a company network with malware, Angl said.
Allowing a public instant messaging application on user workstations may conflict with corporate policy, he pointed out. Many companies have already banned Skype for that reason, similar to the way theyve blocked Windows Live [Messenger] or Yahoo Messenger. Skype represents another threat. I cant overstate that concern around security.
Not that Skype in particular has often been implicated in malware attacks the contrary, in fact. But it is a program outside the control of the organization that crosses its firewall.
If that wasnt enough for IT professionals to want to err on the side of caution, the fact that Skype also could use their companys computing and network resources to route other users calls clinches the case even if, as Skype insists, its use of any one users computer is minimal.
Skype for PBXs
Can you somehow avoid these security concerns but still get at least some of the benefits of Skype? You can, said Angl.
Use the new Skype SIP technology, or a third-party solution such as a Skype PBX gateway appliance from VoSKY. (ZiPCOM Co. and others also have gateway appliances, and Skip2PBX has a software gateway solution.)
With this approach, you dont install Skype software on each users desktop, you connect an existing IP PBX to the gateway and then to the open Internet and Skype.
This allows you to provision Skype trunks for long distance calling using SkypeOut. Instead of dialing 9 from a regular phone to get an outside line, an employee might dial 8 for a Skype trunk.
The Skype SIP technology and at least some of the other solutions also support SkypeIn. You could have a click-to-talk button at your Web site that allows customers to call you on Skype and then route the call through your PBX to a contact center agents desk phone.
This approach eliminates the malware risk because users dont have the Skype client on their desktops. But it also means they dont get the benefits of presence, instant messaging and video calling.
I dont think theres enough value in the long distance savings [to make it worthwhile] for most companies, Angl said. But it might be for small organizations that have a high volume of overseas calls.
Is Skype for business an idea whose time has come? It depends entirely on the business and its tolerance for risk. Proceed with caution.
Based in London, Canada, Gerry Blackwell has been writing about information technology and telecommunications for a variety of print and online publications since the 1980s.
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