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 / Fall 2005 / Issue 40(originally published by Booz & Company)


Skype's Choice

For the immediate future, these conditions make it risky for most large companies to embrace or even consider adopting Skype. And employees can expect memos like those issued at many companies these days warning against using peer-to-peer networks for any form of communication. But as the Accenture scenario illustrated, that won’t stop employees who are dissatisfied with the quality of other forms of communication from accessing Skype anyway. Which means that, before long, management will have to address the potential of Skype or Skype-like technologies — and determine the peer-to-peer applications whose benefits outweigh their risks — rather than simply outlaw the technology and hope it goes away.

Until then, most large companies will avoid Skype, but the technology can level the playing field for small and midsized companies or for companies in developing nations for which a global, inexpensive, and dependable telecommunications infrastructure is a dream come true. With Skype, the Internet becomes a virtually cost-free private telephone-and-voicemail network, a feature-rich system for remote real-time collaboration. This will become even more obvious as Skype’s capabilities increase. The company recently signed an agreement with Motorola to co-market Skype-ready equipment for cell phones, and it completed a deal with Broadreach, the largest provider of Wi-Fi hotspots in the U.K., that will let all users with Skype-capable devices make and receive calls without paying for Internet connection time. In June 2005, a video version of Skype was released that permits teleconferences with up to 200 people.

Soon it will become imperative for larger companies to take Skype seriously, if for no other reason than that peer-to-peer architecture is one of the most efficient, most direct, and least wasteful systems of digital interaction. The eventual answer will probably be software fixes that smooth over Skype’s rough spots. These could come in the form of licensed versions of Skype customized to match a company’s security requirements — a development that could bring additional revenue to Skype.

But perhaps the most lasting influence of Skype will be that it will force management and IT executives to consider how to structure a network that exists both inside and outside the corporate firewall. To improve innovation and their own productivity, employees will gravitate to the most advanced collaboration and communication tools with the most reliable levels of quality, no matter what price is paid in weakened security. Companies will have the task of figuring out how to integrate new technologies like Skype into their businesses — and how to get the most out of them. Or, they could take the opposite course: keep such technologies out by banning cell phones, PDAs, and laptops in the workplace.

Author Profile:

Gordon Cook ([email protected]) is the editor and publisher of the COOK Report on the Internet Protocol: Technology, Economics and Policy, an online newsletter ( founded in 1992 and devoted to telecommunication and Internet strategies.
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