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Business

Skype, Truphone biz threat to be small

Their voice over IP services targeted at enterprises will likely remain limited to SMB space, and pose no significant threat to larger unified communications players.
Written by Victoria Ho, Contributor on

Internet telephony providers Skype and Truphone have targeted enterprises with recent product releases, but their success will likely be limited to the SMB (small and midsize businesses) space, say analysts.

Truphone last month released a business client for BlackBerry smartphones. Called Truphone Business, the service is available at a flat-rate dialing plan of US$14.40 a month and gives unlimited calls to landlines in 38 countries, including Malaysia, China and Singapore.

Also last month, Skype announced SIP (Session Initiation Protocol) support as a beta release, allowing companies to use their IP-enabled office phones to make Skype calls, bypassing the need to dial through their PCs.

SIP is a signaling protocol used to establish sessions within an IP network, typically between a two-way telephone or video call, or an instant messaging session. Truphone's services have SIP support since 2006.

John Strand, chief executive of Strand Consult, said: "A lot of people claim that Skype is not for corporate clients, but that is [untrue]." Many professionals use the service to make cheaper overseas calls, Strand said in a phone interview with ZDNet Asia.

"Skype is starting to become a threat to the bigger unified communications (UC) players, like Cisco [Systems] and IBM. Maybe not for all sectors, but definitely for SMBs," the analyst said.

Skype's and Truphone's relatively low acquisition cost, as well as their cheaper call rates, make both services "very appealing" to the SMB, he noted.

However, Kenneth Liew, senior market analyst for communications at IDC Asia-Pacific, said these services were unlikely to have much clout in the enterprise space.

He told ZDNet Asia in an interview that security worries would likely keep larger enterprises away from the likes of Skype and Truphone.

"Security is a key concern when using such services, as sensitive data may be communicated through the systems," Liew said. "Companies are less willing to risk using these traditionally consumer-oriented services."

The analyst noted that enterprise UC (unified communication) players also bundle calls with the equipment they sell, so clients would likely stick to a packaged service. "Companies like Cisco, will continue to target larger enterprises that buy the systems and implement such services as the same time, while Skype and Truphone are targeted at the SMBs that will implement UC applications with their existing infrastructure. These smaller businesses are also attracted to the lower cost of operation," said Liew.

Price is of higher concern to SMBs, and their security policies are less stringent compared to larger enterprises, he added.

Stefan Oberg, vice president and general manager of Skype for Business, said in an e-mail interview that Skype's SIP support does not put it in competition with equipment retailers. "SIP support is about [working with] existing SIP-enabled PBXs," he said.

Oberg added that over 35 percent of Skype's user base deploy its service for business purposes. "This includes companies of all sizes and geographic reach," he noted.

He said Skype's integration into enterprises is aided by added support for software such as Salesforce.com and IBM LotusLive. Oberg added that the company also released tools aimed at helping corporate IT administrators manage Skype deployments within the organization.

Cisco does not think competition from the likes of Skype and Truphone will pose a big threat. A Singapore-based spokesperson for the networking equipment company told ZDNet Asia that rather than view such services as competition, Cisco believes they will help "enhance [Cisco's own offerings] by building more awareness for VoIP".

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