Skype shakes off consumer shackles

Skype is shaking off its consumer shackles and finding favour with enterprises, with almost one-third of its customers using its telephony software for business.

news analysis Skype is shaking off its consumer shackles and finding favour with enterprises, with almost one-third of its customers using its telephony software for business.

With this in mind, the eBay subsidiary is planning to ramp up its enterprise offerings over the rest of the year.

"The vast majority of our users really think Skype is consumer software," Enrico Noseda, director of telecoms business development for Skype, told a press event held in Tallinn, Estonia, earlier this week.

"[But] we learnt a little more than a year ago that we are attracting a vast number of businesses." Skype's own research suggests that 30 percent of its 220 million users are business rather than personal customers.

Like Skype's general users, most business customers are initially attracted by the prospect of free phone calls to other Skype users, and relatively cheap international calls using its SkypeOut service.

"The core reason they go to Skype is to save money," Noseda said. "Cheap calling and free calls are the basic reason they use Skype, but there are others."

Surveys of business users by Skype confirm that theory, with 95 percent listing saving money as the most important motivation for using the software. Other reasons cited included increasing productivity (80 percent), better communication with colleagues (76 percent) and better communication with customers (62 percent).

To entice further funds from those business users, Skype is trialling two services this year: Skype Find, a user-generated directory of businesses which can be contacted via Skype, and Skype Prime, which essentially allows companies to offer charge-per-minute consultancy services.

Since its March launch, Skype Find has attracted around 200,000 customers, according to e-commerce general manager Sten Tamkivi.

"We're very happy with the pickup of it," Tamkivi said. "We are well on track to go into millions with that. It's like old school Yellow Pages meets wiki."

Skype eventually plans to sell advertising on the service, letting companies pay to display their details when customers search on a specific keyword -- the same model used by existing Internet search giants like Google and Yahoo. Skype describes the model as "pay per lead".

Skype to date has resisted advertising on any of its services, preferring to rely on revenues from SkypeOut. However, it is facing increased competition both from bespoke VoIP services and free software rivals such as MSN Messenger and Google Talk.

One possible difficulty with that approach might be the privacy issues raised by matching advertising results to individual searches. In recent weeks, both Google and Microsoft have adjusted their privacy policies to allay concerns over misuse of individual data.

However, Tamkivi claims that won't be a problem for Skype. "We can bring in enough relevance to start with without providing additional information [about customers]," he said.

Skype Prime, also launched in March, has been developing more slowly. "The basic infrastructure is there," Tamkivi said.

Unlike conventional paid telephone services, Skype Prime fees won't kick in until the caller agrees to them, allowing the basic parameters for, say, a legal consultation to be established before fees are invoked.

"It's not something where the billing starts automatically," Tamkivi said. A directory of Skype Prime services will be launched later in the year.

To maintain a business user base, Skype may have to make its pricing model, which has a range of different tariffs depending on destinations, more transparent.

"I'm not really sure what I'm paying and what I'm paying for," said Mike Couzens, who has been using Skype to sell telecommunications services to golf clubs in the UK.

Couzens would also like to see more business users signed up to the service, enabling more free calls: "I still haven't found very many other users."

While Skype's executives would like overall numbers to grow, they don't assume that the ratio of business users will increase relative to consumers. "I don't expect it to grow much as a percentage of the user base," Noseda said.

Angus Kidman travelled to Tallinn as a guest of Skype.