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March 15, 2006

Skype Not Ready For Business, Say Some

Courtesy of CRN

A perception that Skype’s VoIP solutions aren’t ready for prime time may hold back the growth of the company’s new small-business offering, solution providers say.

Skype for Business, which made its debut March 9, offers small-business users of Skype's low-to-no cost Internet phone service a dedicated business support Web site plus new, certified Skype hardware and a control panel to manage group users and prepaid services.

Between 25 percent and 30 percent of the roughly 75 million users of Skype, now part of eBay, utilize the Skype for Business functionality, said Henry Gomez, general manager of Skype North America.

Skype has inroads into the channel, and distributors such as Brightpoint, Plainfield, Ind., offer Skype’s business service to resellers. Yet Tracy Butler, president of Acropolis Technology Group, a solution provider in Wood River, Ill., that caters to many small and midsize businesses, said Skype remains too much of a consumer product to be taken seriously by most business customers.

"Customers would throw me out on my ear if I came in suggesting Skype," Butler said. "Most will say, 'I'm not going to run my business on Skype.' "

Brightpoint declined to quantify sales of Skype solutions to businesses, but a spokesman for the distributor said executives have expressed the opinion that "there’s not much happening with Skype on the SMB front" right now.

A Skype spokesman said the percentage of Skype users utilizing Skype for Business were calculated from the number of users going to the business Web site. That metric gave no indication of how Skype was being used in businesses, he said.

Skype’s IP-based softphone solution can be loaded into laptops, PCs and wireless wide-area network (WWAN) handsets from vendors such as Linksys and D-Link. In taking such an offering to the channel, Skype will soon face competition from TelTel, a session initiation protocol (SIP)-based VoIP software vendor that plans to launch a channel program later this year.

On Tuesday, D-Link introduced its first wireless phone, a flip-style WWAN model running TelTel software. At the 2005 Consumer Electronics Show, D-Link unveiled an early version of its WWAN phone running Skype, but that product never went into production.

D-Link’s decision to go with TelTel was based on wanting "a better solution for broader content," a D-Link spokesman said. But D-Link still partners with Skype and sells a D-Link Skype USB phone adapter. The D-Link WWAN phone is slated to ship in about three months, he said.

Jack Chang, president and COO of TelTel, said that later this year the Santa Clara, Calif., company plans to roll out a formal partner program for solution providers that resell its Public SIP Telephone Network (PsipTN) network services.

Chang said TelTel has an advantage for businesses that Skype doesn’t provide: reliability. "In a pure peer-to-peer environment [such as Skype's], it's anarchy," he said. "TelTel has deployed servers all around the world to act as connection points, and they provide better voice quality, redundancy and disaster recovery."

TelTel's PsipTN network can be easily accessed and resold by solution providers, which can mark up the service to customers and pay TelTel a fee based on capacity usage, Chang said.

Skype makes it clear that its solution isn’t a telephony replacement service and can’t be used for emergency calling. But the company’s ambitions in the business space are real. On top of Skype for Business, other business-optimized offerings include Actiontec Electronics’ Vosky Exchange, which lets PBX systems connect with up to four Skype callers, and Skype-integrated business conferencing products from Polycom. Skype also can interface with via

David Lair, business and technology consultant at Xpedeus Information and Technology Business Solutions, a Brandon, Fla., solution provider that offers hosted VoIP solutions to SMBs, said he has never seen a customer running Skype. More sophisticated VoIP solutions for small businesses, such as those from Packet8, are affordable, and SMBs that seek a lower-priced VoIP solution and sacrifice reliability would be making a mistake, he said.

As free peer-to-peer VoIP software, Skype was popularized by its tremendous growth in the consumer market. Skype was bought by eBay in September 2005 for about $2.6 billion.

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