RealTime IT News

Skype Eyes Business Dollars With SIP Service

Skype is working to deliver on its promise to target corporate customers, announcing today the beta version of Skype SIP for Business.

The new software promises to allow employees to make domestic and international calls using regular office telephones instead of relying on a headset and a PC, thanks to Skype's integration with SIP -- short for Session Initiation Protocol, a voice over IP (VoIP) protocol used on many business telephony networks.

The integration can also offer new functions for companies, who can now be reached by Skype users through "click-to-call" from their business Web sites, according to the eBay-owned (NASDAQ: EBAY) company. The calls will be received through their existing office system at no cost to the customer.

For corporate IT, companies will be able to manage Skype calls with existing hardware and applications that perform functions such as call routing, conferencing, voice mail and call recording, Skype's Peter Parkes wrote in a blog post.

At the same time, businesses can benefit from Skype's global calling rates when placing calls to landlines and mobiles worldwide from devices connected to their PBX systems, Skype said. The charge for calls made to cell phones and landlines will be 2.1 cents per minute -- the same as its consumer service. And similarly to how Skype doesn't charge for PC-to-PC connections, there will be no charge for calls made from computers to other Skype networks.

"According to IDC, 438,000 IP PBXes were shipped worldwide in 2008, so this represents a significant opportunity for Skype, and for small, medium and large businesses around the world," Parkes wrote.

During the beta period, all calls will be charged at standard Skype rates, the company said, adding that it plans to announce further pricing details when the product is fully launched later this year.

The news comes as Skype's parent company eBay works to execute a significant shift in its core business from auctions to other selling formats as it battles Amazon for market share.

Since buying Skype in 2005 for $2.6 billion, eBay has been under pressure to start reaping some revenue from the VoIP player. That's become especially critical with it now facing competition from other Internet giants like Google, which most recently announced its own Internet phone service, Google Voice.

In particular, Skype's SIP for Business news comes on the heels of its announcement to investors and analysts that it will double its revenue to over $1 billion in 2011. Skype CEO Josh Silverman laid out a strategy that involved beefing up its core business with the introduction of ads and social network-styled marketing, bolstering its mobile and hardware ventures by partnering with smartphone and hardware makers, respectively, and by ramping up its corporate offerings.

"First we will focus on small businesses," he told analysts, "and then we will move to enterprise in due time."

The SIP move is prudent, and should prove to be a "win-win" situation, Rebecca Swensen, IDC research analyst for enterprise mobility and IP communications services, told InternetNews.com.

"The business world has been waiting for them to do this for a while, to provide the ability to use Skype through PBX for cheaper calls, so it makes sense from a business perspective," she said. "Businesses right now want to do anything to lower their costs, and they can do that without much, if any, up-front cost, so it's good for them. If businesses can use Skype SIP to make calls cheaper, that's a great first step for Skype in terms of entering the market. They have traction in the small business market, but this will give them a beginning with large enterprise. So it's a win-win situation."

In terms of how the Skype initiative will influence the market as a whole, Swensen said for now she doesn't expect corporate clients to abandon their existing set ups. "At this point I don't think any businesses are going to drop their other voice services, but they will continue to look at new ways to save money or deliver services so it's a first step."

As far as future announcements on the enterprise front, Swensen said we can expect to see more from Skype sooner than later. "I've been hearing from businesses, resellers, that they've been looking for an enterprise solution from Skype, so the demand is out there, so I doubt it's going to be a wait-and-see approach on Skype's part," she said. "At the same time, I think they want to be sure to roll out quality business solutions properly. It parallels the strategy they took in entering the mobile market. They don't want to make any mistakes so they have to be sure they're delivering the right apps and services."

Overcoming obstacles to enterprise market

Peter Hall, principal analyst at telcom consulting firm Ovum, said the move should help Skype overcome obstacles it faced with the enterprise market -- namely the reluctance of IT managers to embrace the technology.

"Though Skype says 35 percent of its users use it for work, most of that is not with the sanction of the IT department," Hall said. "IT managers tend to frown on Skype because it's a consumer approach, so there are issues of perception, fears that it will punch through firewalls, but those are far-fetched. Still, Skype has spent a lot of time reassuring them of security, and by-and-large, it is as secure as what the business apps they're using."

To help IT managers feel comfortable with the technology, Skype has made it more enterprise-friendly, Hall said. For example, a feature that allows users to transfer huge files can be disabled by IT when installing it for their workers.

"Managers were worried that an employees could exchange huge company databases without anyone knowing," Hall said, "So it's things like that the Skype was paying attention to."

This strategy, along with the SIP announcement today, puts Skype in a better position to compete at the enterprise level, Hall added.

"The latest announcement means Skype can be integrated because SIP is the de facto standard for enterprise VoIP," he said. "Skype had shunned this, they used their own proprietary protocol, but they recognized that SIP is what the majority have employed."

While the news today signals that Skype wants to be taken seriously by big business, Hall said that may take some time. "Right now it's really still the smaller businesses that are extremely interested. Enterprise-size companies aren't going to be drawn in so much by cost-savings, because they have the power to negotiate similar rates with their existing provider if they don't already have good deals on calling rates," he said.

"And a in a survey we've done with large enterprise, the result was that the majority don't regard Skype as a serious voice service -- this was last year. Two-thirds said they didn't like employees using it because of policy issues."