Skype For SIP: Big Money, Skypeless, Brand Destroyer

Skype For SIP (SFS), announced today, is really two Skype for Business services.

And a huge problem.

The services:

Skype-Name-to-SIP-Address. Skype for Business users map one Skype name to one IP address. So people can Skype your Skype name but your SIP PBX rings.

SIP-Switch-to-SkypeOut. Use SkypeOut for all the calls going out of your SIP telephone system. Billed at Skype's typical per-minute rates: higher than what you can buy in bulk, much cheaper than what you get from your local phone company.

Both are controlled through the Skype.com web site and setting on your telephone switch. Business Control Panels let organizations distribute money to multiple Skype accounts.

Between the two parts, SFS gives Skype an excuse to get in front of small business telecom buyers. It offers cost savings and predictability on outbound calling. It provides simple routing of incoming Skype calls to your call center. No hardware beyond your SIP PBX. No software to install. You don't even need to use Skype.

SFS is the second workplace product Skype is launching this year. Skype For Asterisk (SFA), still in closed Beta testing, is Asterisk add-on software running on your Asterisk telephone switch. SFA gives your phone switch the ability to send and recognize Skype instant messages and presence. SFA also lets programmers integrate Skype into other Asterisk programs, like phone trees and speech recognition.

Distribution.

SFS will be distributed on Skype.com and by Skype "service partners", local firms that install and repair phone systems. Service partners will receive commissions from Skype on minutes purchased by customers they refer to Skype. Skype will send referrals to authorized service partners.

Skype does not have a service partner network now. A 2007 project tried to distribute Skype for Business starter packs. 

The Strategic Opportunity.

Skype For SIP home page on launch day, 23 March 2009

Skype is opening doors with SFS.

They're setting up a distribution channel and meeting enterprise IT/telecom people. Skype's brand may entitle it to sell Skype-flavored minutes at a premium. All of this should be good for Skype's sales.

How big is the opportunity?

The normal VC math: 100 partners worldwide (could be 1000 easily) x 100 small companies per partner (could take time) x 1000 minutes/month (an extremely low number) * $0.20 per minute = $2 million/month. This run rate could grow easily to $20 million/month in a year. 

That's the quarter billion dollar per year upside.

The Strategic Downside.

The downside is huge.

Skype For SIP is barren of everything that makes Skype meaningful and invaluable in the workplace.  

Skype is selling cheap, convenient minutes to enterprise plumbers. Legacy audio quality. No audio, video, conferencing, buddy lists, file sharing, presence, or software extensions. SFS is the commoditized low end of VoIP.

With SFS, Skype defines itself to the channel and to its business customers as a "value" provider, helping companies shave pennies, competing with the "minute stealer" industry. While there's money to be had, Skype For SIP

This abandons Skype's central tenets: 

• Be a live, realtime social network.
• Enrich the quality of conversation through higher quality and multiple modes.
• Build Skype Dial Tone by having more individuals log in for more time each day, earning network effects.
• Be the tool people use for workplace collaboration and coordination. 

Skype For SIP is a Skypeless product.

Nobody at a company which uses SFS needs to use Skype. Nobody needs to turn on a client or use an embedded Skype phone or download Skype Lite for a mobile.

In short: SFS undermines Skype's brand.

Warnings for 2009.

• No Emergency Calls. Calls to paramedics, police, and fire will not go through. Standard blocking by the Skype network. So configure your IP-PBX to keep a non-Skype connection open.
• Security sucks. No encryption for now. A Skype spokesperson wrote "at the start of beta, we do not support encryption due to the lack of support among most IP-PBX vendors. We will be adding TLS (encrypted signaling) and SRTP (encrypted media) during the beta period."
• ID Schism sucks. No way for users to tell if a Skype account is a "consumer" or a "business" or a robot account. No way to tell if a Skype user is seeing your IM or your presence or can see your video.
• English-only. One language for the web site and documentation. No internationalization for a while.
• Digital Identity Lifecycle sucks. No way to transfer a Skype account (in the event of M&A, personnel change, for example) or to integrate this with your network/server management systems.
• Only One Skype ID per Company. So if you have more than one trademark, you're out of luck. If you've already secured your trademarked Skype name, you're in worse luck. Only Skype names created through the new service will work. This contradicts what a Skype source told Dan York.

See also:

• Skype Now Means Business, Friends The SIP World, Om Malik, GigaOM
• Skype Targets Businesses to Ring Up New Revenue, Geoffrey A. Fowler, Wall Street Journal
• Skype tears down more walls with "Skype For SIP", Dan York, Disruptive Telephony
• Business Long Distance: Death by 1,000,000 PBX's, Jim Courtney, VooW
• Techmeme coverage.

 

Thanks to Ian Robin, who runs sales and marketing for Skype for Business, for the briefing.

And, as we often do, the full text of the news release.

Skype opens up to corporate SIP communications

New beta program brings Skype voice calling to SIP-based PBX systems

LUXEMBOURG, March 23, 2009 — Skype today announced the beta version of Skype For SIP for Business users. SIP, short for Session Initiation Protocol, is an open standard and the leading voice over Internet protocol used in businesses telephony networks at millions of locations globally. According to IDC, 438,000 IP PBXes were shipped worldwide in 2008.^*

Skype For SIP allows SIP PBX owners to benefit from Skype’s low cost calls to fixed phones and mobiles around the world, and to receive calls from Skype users directly into their PBX system.

Businesses can now be reached by the community of over 405 million Skype registered users through click-to-call from their business Web sites. The calls will be received through their existing office system at no cost to the customer. At the same time, businesses can benefit from Skype’s low-cost global calling rates when placing calls to landlines and mobiles worldwide from devices connected to their PBX systems. In addition, they can choose to purchase online Skype numbers available in over 20 countries to receive calls from business contacts and customers who are using traditional fixed lines or mobile phones.

“The introduction of Skype for SIP is a significant move for Skype and for any communication intensive business around the world,” said Stefan Oberg, VP and General Manager of Skype for Business. “It effectively combines the obvious cost savings and reach of Skype with its large user base, with the call handling functionality, statistics and integration capabilities of traditional office PBX systems, providing great economical savings and increased productivity for the modern business.”

"Businesses have been waiting for Skype to make a concerted push into the business space for a while,” said Rebecca Swensen, IDC’s Research Analyst, Enterprise Mobility and IP Communications Services. “Connecting to existing standards-based SIP PBXes is a good way for Skype to start doing so. It will be interesting to see how large companies change their thinking about the deployment of Skype within the network.”

Key Features

The beta version of Skype For SIP will enable business users to:

• Receive and manage inbound calls from Skype users worldwide on SIP-enabled PBX systems; connecting the company Web site to the PBX system via click-to-call
• Place calls with Skype to landlines and mobile phones worldwide from any connected SIP-enabled PBX; reducing costs with Skype’s low-cost global rates
• Purchase Skype’s online numbers, to receive calls to the corporate PBX from landlines or mobile phones
• Manage Skype calls using their existing hardware and system applications such as call routing, conferencing, phone menus and voicemail; no additional downloads or training are required

How to participate

The Skype For SIP beta program for business users opens today. SIP users, phone system administrators, developers and service partners are invited to apply at www.skypeforsip.com. Applicants will need to be businesses, have an installed SIP based IP-PBX system, as well as a level of technical competency to configure their own SIP-enabled PBX. The initial beta is available to a limited number of participants.

During the beta period all calls will be charged at standard Skype rates. Further pricing details will be announced when the product is fully launched later this year.

tags: sfs, sfa, skype for asterisk, skype for business, skype for sip, sip, skype

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