Skype, the voice over internet protocol (VoIP) software company, is now the world's biggest carrier of international telephone calls, and is poised to grow even bigger by grabbing the lucrative business market.
According to market analyst Telegeography, Skype's international voice traffic grew 41% to 33 billion minutes, 8% of the world's total last year. That was achieved in five years despite origins in the Kazaa peer-to-peer file-sharing controversy.
Skype is a software application that allows users to make voice and video calls and conference calls, as well as send short "chat" messages, files and images from their PCs, and increasingly, from their mobile phones. Calls between Skype users are free, but calls into and from the traditional telephone network cost about €0.17. Users can also pre-pay for calls and voicemail services.
Ian Robin, sales and marketing manager of Skype's business division, says a user survey last year showed that 35% of its 405 million subscribers use Skype for business. He says business users come from all sectors of the economy, from eBay merchants to merchant bankers, as well as divisions of larger firms.
"We have got a very compelling offer, especially on international calls," he says. But it is also easier to text with a PC keyboard than a mobile phone keypad. Business travellers use Skype to stay in touch with family while overseas, and this often expands to calls and "chats" to the office, he says.
Jane Folwell, CEO of Folwell PR, a small IT public relations firm, says she uses it to keep in touch with her colleagues and with journalists, especially when she is away from her office. She values Skype for its speed and simplicity and is not bothered by security concerns. "I do not put anything confidential on Skype," she says.
Despite its success, Skype remains controversial. This is partly because all Skype calls and much of Skype's code is encrypted.
This makes it hard to understand exactly how it works "on the inside", says security expert Peter Wenham, CEO of Trusted Management, and security spokesman for the Communications Managers' Association, a business users organisation.
Trusted Management discovered that the Skype client on a PC automatically upgrades it to a "supernode" when it detects the user has a high-speed connection. This makes it a main conduit for all Skype traffic, giving other users a "free ride".
There are about 40 supernodes worldwide at any one time, Wenham says. Most are home users with little, if any, security.
But Wenham is more worried that a criminal manages to hack Skype, infect a supernode and use it to distribute malware.
Robin acknowledges these reservations and others, and says Skype is addressing them. He says users have always been able to turn off the supernode mode, and Skype has released a management tool that makes it easier to allocate credits and monitor usage.
Wenham says Skype works very well, but recommends firms do a risk assessment before they commit to it. Trusted Management, which work a lot with government, has not. "I judged it was not an acceptable risk to my business," Wenham says.
Skype for business
Last month Skype confirmed its intentions to tackle the business community by launching a beta version of Skype for Session Initiation Protocol (SIP), which allows free or cheap Skype calls to and from internet-enabled private branch exchanges (ipbxs).
The move means Skype's 405 million registered users can click-to-call businesses for free while visiting the business's website.
This follows a stream of launches in recent months to add Skype capability to the iPhone, Android Nokia and Java-capable mobile phones. When Skype launched its iPhone client two weeks ago, more than a million people downloaded it in a week.
Commenting on the move, IDC research analyst Rebecca Swensen says, "Businesses have been waiting for Skype to push into the business space for a while. Connecting to existing standards-based SIP PBXes is a good way for Skype to start. It will be interesting to see how large companies change their thinking about the deployment of Skype within the network."