The Pros and Cons of Skype for Business

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.

Low-cost Calling

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, it’s 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, it’s 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

Skype’s 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. It’s not the only phone service they use, but it’s 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.

It’s more than just cost avoidance, though. “In-person is not the medium in which we want to test them,” Marshall points out. “It’s 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 company’s 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, it’s 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.”

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