Is Skype ready for the corporate world?

Many credit Skype with bringing VoIP to the masses, but is it a viable replacement for all of your other phone services? Deb Shinder weighs the pros and cons of Skype for corporate use, and she takes the Skype 3.0 beta for a test drive.

With millions of users worldwide, Skype is arguably the most popular consumer-level voice over IP (VoIP) implementation on the planet. As of the end of last year, Skype, now owned by eBay, had more than 50 million users according to many reports—and more than 200 million downloads.

Most credit Skype with bringing VoIP to the masses. One big reason for its popularity is that it's freeware—at least, if you don't need to be able to receive calls from regular phones.

Is Skype just a toy for home users and techie types who don't want to pay for a "real" VoIP service, or does it have something to offer businesses? Let's take a closer look at the peer-to-peer VoIP software from the same folks who brought us the KaZaA file-sharing program.

What's different about Skype?

In its original incarnation, Skype is a type of "soft phone"—it runs on a regular PC on top of a standard operating system. (It's available for Windows, Linux, and Macintosh OS X.)

However, there are dedicated mobile Wi-Fi phones available that will let you make Skype calls without a PC (but not without an Internet connection). One example is the NETGEAR Skype WiFi phone.

Most commercial VoIP services operate on one of two standard protocols: Session Initiation Protocol (SIP) or H.323, which are standards defined by the IETF and ITU. Calls typically go through a call server, which manages the calls.

But Skype is a little different: It uses closed, proprietary protocols and peer-to-peer technology that depend on "supernodes." According to some analyses, Skype's P2P network is also fundamentally different from other P2P networks, but—not surprisingly—it's similar to that of KaZaA, which also uses the supernode structure.

Skype also differs from other VoIP services because it provides instant text messaging (IM) and file-transfer services—not just voice communication. With the free software, you can perform all these transactions with others who have Skype installed on their computers, and you can make calls to PSTN and cellular numbers.

However, you can't receive incoming calls except from other Skype users. To do that, you need to pay for the SkypeIn service, which is considerably less expensive than most VoIP services—coming in around $38 (U.S.) for a full year.

Skype features and concerns for business

Security is a big concern for businesses today, especially those in industries regulated under HIPAA, GLBA, and other laws that require them to employ measures to protect the confidentiality of certain information. Skype encrypts all voice traffic with AES, a strong encryption standard adopted by the U.S. government in 2002.

Many VoIP systems suffer from implementation difficulty because their protocols don't play well with firewalls and Network Address Translation (NAT) devices. But Skype works behind NAT and firewalls.

Skype is also available for Windows Mobile devices, such as the Samsung i730 Pocket PC phone. If you have an Internet connection, you can use it to make calls instead of using up your allotted monthly cell phone minutes. With a SkypeIn number, you also get a voice mail account, where callers can leave messages if you don't answer (including when your computer is off or disconnected from the Internet).

Businesses will like the fact that you can make outgoing calls to other Skype users anywhere in the world at no cost—and that includes video calls. You can even conference with up to four people at no cost, and you can engage in group chats with up to 100 people.

Through the end of 2006, you can also place outgoing calls to landlines and mobile phones in the United States as part of the free service. If you pay for a SkypeIn phone number, you can receive calls from non-Skype phones as well as forward Skype calls to your landline or mobile phone.

One problem you may run into is that Skype calls don't display caller ID information. All Skype calls show up on caller ID as 000-012-3456. If the called party has configured his or her service to block unidentified calls, Skype calls won't go through.

It's also important to remember (as the Skype Web site and software warn you frequently) that Skype doesn't provide emergency service. You can't call 911 with it, so it's not a good idea to rely on it as your only phone service.

What's new in version 3?

When eBay acquired Skype in 2005, part of the official announcement quoted eBay CEO Meg Whitman as saying, "By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net."

The newest version, Skype 3.0 (currently in beta), appears to be making good on the goal of attracting business customers. In fact, it boasts a business version that's easy to deploy to multiple machines on a network using Windows Installer (MSI) packages, and companies can centrally manage multiple accounts with the Business Control Panel. The administrator can then allocate Skype phone numbers and voice mail to users. (At the time of this writing, the business version of Skype 3.0 beta is build, whereas the regular Skype 3.0 beta is build

There's an optional feature you can install to allow you to call regular phone numbers on any Web site with a click. There are also a number of add-ons you can install to make Skype more productive, including:

  • Pamela—a personal digital assistant program for Skype
  • TalkandWrite—a whiteboard application with voice and video
  • Skylook—an extension that lets you record Skype calls and get SMS alerts, voice mail in your e-mail inbox, and Microsoft Outlook reminders by phone
  • SKY-click—a Web-based call center
  • Transclick—a translation plug-in for chat messages

The Skype experience

The last time I tried Skype, several years ago, I was less than impressed. Voice quality wasn't very good (using a T-1 Internet connection), and calls didn't connect reliably. So I was prepared to be disappointed when I downloaded and installed Skype 3.0.

Instead, I was pleasantly surprised. At almost 14 MB, the download isn't tiny, but the installation went smoothly and only took a few minutes. Over my 15-Mbps FiOS connection, the sound is as good as my landline and better than my Lingo VoIP and cellular lines.

One difference I noted between the consumer and corporate versions was that the former automatically imported my contacts from Outlook, whereas the latter didn't. However, I was able to do so easily by selecting the Import option from the Contacts menu.

I signed up for a SkypeIn phone number to test the feature, and Skype activated the number I selected within 10 minutes. You can request a specific number in your area code, which Skype will assign you if it's available, or you can choose from a list of available numbers.

I was able to immediately make calls from my landline to the new number and leave voice mail. The History tab displays voice mail messages, along with missed calls.


Is Skype a viable replacement for all of your other corporate phone services? Probably not, if only because of the emergency 911 limitations. But it's becoming more reliable and robust all the time, and the price certainly beats that of other VoIP providers. Skype is certainly an inexpensive way to add extra phone lines, with a whole slew of features that are business-friendly.

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Deb Shinder is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. She currently specializes in security issues and Microsoft products, and she has received Microsoft's Most Valuable Professional (MVP) status in Windows Server Security.


Debra Littlejohn Shinder, MCSE, MVP is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. Deb is a tech editor, developmental editor, and contributor to over 20 add...


I have been using Skype for over 3 years and it is great and by the way most 911 calls are made with mobile phones today so who needs the old phone systems anyway, that argument is as dead as the Encyclopaedia Britannica in book form.

We all know - in technology - power lies with Standards and consumer acceptance; and since Skype seems to have both ? including a rapidly growing global following, it appears to be poised to become to Telecommunications ? what Linux is to PC operating systems. A friend who works for an airline, and frequently travels overseas - first turned me onto Skype, over a year ago. He had been using it from his notebook PC for some time, and after I installed it ? I began hearing from him on a regular basis, from places as diverse as Germany, England, Kuwait, parts of Africa, Japan, S. Korea and Taiwan. Though the quality of the connections varied from place to place - mostly by the frequence of dropped connections, the voice was usually quite good - and best of all ? the calls were free. Over time, the consumer version I presently use has been steadily improving, especially after I learned how to configure my router to employ QoS on the ports used by Skype. With a new business version of Skype now available, I suspect SMBs and IT consultants will begin exploring the options presented by Skype - both for it's potential of saving on phone and long distance bills, and for other VoIP / Chat and e-mail communications enhancements ? only available on systems to expensive for small businesses. By adding Skype to existing services, rather than replacing those already in use, Skype can be phased in to create a hybrid system, maintaining the stability of analog lines, while adding the specialized features available in Skype. Two years ago, I setup exactly that kind of hybrid system using ATT CallVantage VoIP lines in a client?s offices. We began by adding two VoIP lines for long distance savings, and as a way of checking the stability of this ? basically consumer level service, when added to an existing business system. After installing the ATT lines, the staff was instructed to use these new VoIP lines when making outgoing long distance calls. Several times over the next year, we poled the company staff about their experience with the VoIP lines, and were told they could not tell the difference between the analog lines and the ATT VoIP lines. As a result, we added two more VoIP lines and dropped four of six costly analog business lines ? cutting over $200 a month from my clients previous phone bills. Skype, like the ATT system, can use converter boxes to connect to existing phone wiring, permitting the new VoIP lines to be connected to a key phone system. This allows the cost savings and advanced features of VoIP to be used, with out replacing an existing expensive digital phone network. With two analog lines still in use, phone communications can be maintained ? along with 911 service, even if the hi-speed internet service used by VoIP, is disrupted. Aside from the VoIP modem, your only other consideration is that your hi-speed internet service can support up to 90kb of internet bandwidth, per VoIP line. Having had some experience with Skype in my home, where I learned to stabilize calls at my end using QOS, I now plan to experiment with adding Skype to my clients existing systems, the same way we did ATT VoIP. Adding Skype costs very little ? even with the addition of the SkypeIn phone number, and when the system has proven it's self ready for prime time, it will be goodbye to the more expensive ATT lines, including possibly one more analog line ? for additional savings and services not available though ATT. By working with new services like Skype, we can all help new technologies gain acceptance, which in the end ? keeps we techs on the cutting edge, helps our clients stay competitive - and sends a message to the big corporations that there are limits to what they can charge, as long as consumers still have options.


I believe Skype will use our servers & workstations as an ever increasing 'telephone' exchange for Skype. It goes beyond NAT and Firewall - so how is that 'Ready for Businesses?'. Lets cut out this nonesense and create a business solution on a basic 'Open-Source' PC and customise it per business - and the Administrator can choose the numbers available - clients, associates and staff! We must have a solution like this available now - anyone know??


see article for some fundamental criticism. it is not manageable, it is not safe enough, there is not 1st level support, there are no SLA for businesses. you cannot make reports, the current corporate skype is identical to the public skype beta.

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