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The Incredible Importance of Skype

Written on:December 23, 2010
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As Skype sputters back to life today after its first major outage in three years, it’s helpful to look at how critical the communications tool has become for users and companies, who increasingly rely on it for phone, IM and video chat service. Companies found themselves crippled as they tried to link workers who normally connect over Skype.

Here’s a look at how big Skype has become:

  • Skype hosts about 25 million users at peak times.
  • Members made 88.4 million Skype-to-Skype calls in the first half of 2010 with 6.4 million minutes of calls to landlines in the first half of 2010.
  • Skype accounts for 0.57 percent of all Internet traffic.
  • Skype grew by 51 percent last year dwarfing the 8 percent growth for international telephone traffic.

The outage was felt far and wide, especially with companies that rely on Skype to bring remote workers together.

“In the case of the current Skype outage, our business relies on constant communication (we have talent around the world) and when a company depends heavily on one application service for this, it can cause major problems. The panic sets in when you don’t have a clue when it will be restored,” said James Touhey, Principal at creative agency theLIFT on Quora.

A friend of mine Michael K. Lee, a VP of Ecommerce Online and Mobile Channel at Bank of America said Skype was often how he connected for long conference calls when working from home.

“Without Skype I burned up most of my cell phone minutes and now have to pay overage,” Lee said.

Overage charges may sound petty but it highlights just one of many ways workers and consumers have come to rely on Skype. The service has an important way for people to get free and cheap calls, breaking the hold of existing telephone providers.

Blogger Alexia Tsotsis of TechCrunch blogged about her experiences of losing Skype and the isolation she felt from the rest of her team.

“I’m pretty handicapped at the moment by not being able to communicate with my colleagues or sources through Skype. I might as well take the day off,” she wrote.

The outage may prove to be a turning point for Skype, which is in the process of selling itself as a communications tool for enterprises and preparing to go public. Skype said it is restoring service by relying on mega-supernodes, instead of the supernodes, the Skype “phone directories,” that members host on their computers on the open Internet. The mega-supernodes may be robust servers under Skype’s control, suggesting that the company will host more of this type of critical hardware instead of relying on its distributed network.

Whatever happens, Skype will need to tell a more reliable story to companies if it wants to get corporate adoption, said Alec Saunders, CEO of Calliflower, a collaboration service that hosts conference calls.

“The businesses that Skype is courting as part of its push to increase revenues are going to want answers.  It’s simply impossible to rely on voice service that might take days to come back to life,” Saunders wrote.

The outage has also been a wasted opportunity by Skype to show some leadership, said Phil Wolff, of independent blog Skype Journal. He said the company could have humanized itself and educated users during the failure but instead dribbled out small bits of news while keeping executives like Tony Bates largely hidden. He wrote:

“Skype had the chance to humanize itself. Skype could have let customers see the hard working people behind the pretty brand working together and sacrificing family time during a holiday week. Skype had the chance to educate about how the product works now, instead of how it used to work. Skype could have shown how much people and workplaces depend on Skype. Skype hasn’t. Mr. Bates, give your people the order to speak up and tell customers what they need to know, the way that makes sense to them. The cost of silence is too steep. You’re in charge. Lead from the front.”

Bates finally opened up to Om earlier today and apologized. Wolff previously wrote that the latest outage is bigger than the 2007 Skype failure that last two days but much of it during a quiet weekend. The service then had 9 million users at peak times, almost one-third the number of users on during heavy traffic periods now. Though incidents like this latest outage may give some momentary pause about using Skype, the service shows no signs of slowing down. If there is another event like this, it could be even more crippling when more users are relying on the platform.

Related content from GigaOM Pro (sub req’d):

  • Research Note: What a Skype-Cisco Partnership Could Mean
  • Report: U.S. Mobile Venture Capital Investment, Q2 2010
  • Report: Google’s Voice Possibilities

 

 

 


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