Where is Skype going with its business play?

Skype is aggressively targeting the small to medium-sized business market with its Skype for SIP offering. As Om Malik points out [1], Skype's announcement of interoperability with Cisco's widely deployed Unified Communications 500 system is indicative of a larger move by the company to attempt to win significant share in the business telephony market, as it has done in the consumer space.

Skype, which has already announced interoperability with ShoreTel [2] and SIPfoundry sipXecs [3], offers businesses a clear value proposition with its cheap international calling, its free Skype-to-Skype calls, and its video chat options. But Malik says that's about the only thing Skype has over competitive offerings, and hinted that the VoIP calling service needed to add features and improve reliability to overcome negative initial reaction to the Skype for SIP product.

With voice becoming increasingly commoditized, Skype has to see the writing on the wall for the margins of its consumer VoIP offering. While it needs its gigantic 480 million-strong user base to attract business customers via scale and to deliver cost savings from call volume economy, the price it can charge for SkypeIn and SkypeOut minutes will continue to decrease, especially as new, powerful entrants like Google undercut Skype on price [4].

Enter the Skype enterprise play, which if developed correctly, could begin to deliver recurring revenue to offset any decline in the consumer business. If, of course, it can overcome its stigma as being too unreliable and a pure "value" play [5]. 

Skype also announced this week that it will offer a Skype Service Partner Program to begin a concerted channel play. Skype Chief Strategy Officer Christopher Dean said the influence of channel advisors and consultants made a channel offering crucial to Skype's play in enterprise.

"Saving money is just the start of what we do for customers," Dean told PhonePlus [6]. "Skype is much more than voice."

Skype will have to prove that its business offering is indeed more than voice to experience significant uptake and the revenue that would follow. But as its overwhelming success in gaining consumer adoption has shown, a bet against the company should be made with caution.

- Pete [7]