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Skype for Business - That's Right

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June 01, 2010

Skype for Business - That's Right

By Jon Arnold, Principal, J Arnold & Associates

Until recently, putting the ideas of Skype (News - Alert) and business use together would have seemed an afterthought. We all know how successful Skype has been with consumers, and they have quietly been gaining acceptance in everyday business applications. However, to think about Skype as a full-fledged business solution - especially for enterprises - may be a stretch for many. Fair enough, but I'm here to tell you there's a good story here - even for enterprises. I have written about Skype for Business here in recent columns, but mainly as a partnership play with service providers. Now I'm going to update you on their latest value proposition, which is built around a more integrated solution for businesses of any size.

Skype has long looked to the business market for growth, not just because these would be new customers, but the revenue opportunities are more attractive than with consumers. I should also add this isn't the only area they are pushing into. Especially since going into the Silver Lake fold, there has been increasing pressure to better monetize not just their technology, but Skype's massive user base.

Quickly, a few data points to suggest why Skype has value as a business application. Based on their recent Skype for Business presentation, 37% of users use Skype for business purposes. More interestingly, 70 percent use Skype when traveling on business and 62 percent say they communicate better with customers when using Skype. While the definitions here may be open to interpretation, you don't have to look far to find people using Skype regularly in some form of business capacity.

Why should this matter to service providers? On one level, Skype is becoming a preferred communications mode because it fits the way we do things. In their launch presentation, Skype talks about the ascendancy of the virtual office and the distributed workforce. All businesses are trying to cope with these trends, and the days of everyone working all day long together in one location are long gone. The thread that keeps this atomization hanging together is broadband. Landline telephony may be the most resilient, reliable connection, but it's far more costly and limited in terms of connecting people where they are and how they work today. Skype is simply better able to meet these needs - not necessarily as a TDM replacement - but at least as a way to help businesses address the underlying trends.

Skype may offer a lot of benefits over TDM as a voice service, but there is a lot more to consider. Most usage of Skype is for personal communication, and typically at no cost. This is great for ad hoc needs, but businesses need more to consider Skype beyond making cheap calls. Skype has these other capabilities, but their challenge is offering them in a way that can be deployed company-wide, and with some form of revenue stream attached. Beyond IM, file transfer and Skype calling (video and audio), there are applications that businesses should be willing to pay for from Skype, such as multi-party video calling, voicemail, inbound and outbound PSTN connectivity, mobile connectivity and SMS. These are all services that businesses pay for today, and Skype can certainly offer lower costs here across the board.

For businesses that have embraced PC-based communication and Web-based applications, Skype makes a lot of sense in this context. This is not to say they will abandon their PBXs and move off the PSTN altogether. They will simply become less phone-centric, and increasingly view the desktop and the cloud as the real hubs of communication. Skype is not intended as a full-out replacement of the phone service, and instead, businesses should look at it as a way to reduce and better manage their voice spend. The lack of 911 support is a legitimate concern, but if Skype is used as a complement to TDM, this should not really be an obstacle. Another common concern is lack of QoS, which is generally the case for all OTT - over the top - services. In most cases, Skype users can't complain much about poor call quality since the call is usually free. The bar will be higher for everyday business use, but Skype can address this by working more closely with service providers. In fact, there is likely a good opportunity here for carriers to partner with Skype. By ensuring QoS, they provide a solid channel for Skype to roll out new services. In return, the service provider brings the Skype cachet to their customers, and could likely bundle Skype for Business with other UC-type services to create a more distinct offering, especially for enterprises.

To make this more appealing to enterprises, Skype for Business has introduced some important features. First is Skype Manager, which is the administrator portal that allows IT to monitor and manage Skype activity across their network. Without this, Skype cannot get beyond a one-to-one application that employees use as they see fit. Enterprises need more control to bring it into their network, especially in sectors where compliance regulations require it. Two important elements of Skype Manager is the ability to centrally review CDRs and issue Skype credits to users. With these capabilities, Skype for Business sounds a lot more like a tool that IT managers would welcome. This gives them far better control over telecom expenditures and call efficiency metrics, particularly in the contact center. Given the price advantages of Skype over legacy-based tools, this should go a long way to making Skype for Business a bona fide alternative for enterprises.

There is more to explore with Skype for Business, such as Skype Connect (interface with legacy PBXs) or their new video interface that enables business-class video conferencing with television screens. There is a lot of innovation coming from Skype, and I'm not even considering potential synergies with Avaya (News - Alert). The main point here is that Skype for Business now has most of the tools needed for business communications, including enterprises. If there's one missing piece of note, it would be customer support. For Skype to succeed as a revenue-generating, enterprise class solution, this will have to be addressed either organically, or on a partnering/outsourced basis.

The value proposition changes quite a bit when you start thinking about Skype as a paid service, and to succeed in this realm, I think Skype will need to work closely with channels, integrators and service providers. When you and I use Skype for ourselves, we just go to the Web and get it. However, when enterprises want to use it across their network and possibly integrate Skype for Business with other applications and platforms, things get a bit more complicated. But the new and additional value they derive should well be worth it. In that regard, I believe service providers need to look closely at Skype for Business as yet another example of how applications and communications solutions are driving value for businesses. Connectivity is vital - especially for Skype - but that's increasingly becoming table stakes compared to everything else we've been looking at here. The future is applications, and Skype understands this as well as anyone else. I hope service providers are noticing.

Jon Arnold, Principal at J Arnold & Associates, writes the Service Provider Views column for TMCnet. To read more of Jon's articles, please visit his columnist page.

Edited by Patrick Barnard

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