Friday, March 27, 2009

Skype and Enterprise Markets

Global Insight from PriceWaterhouseCoopers (PwC): March 2009

eBay's access-independent VoIP business, Skype, has announced the latest move to penetrate the enterprise voice market with the beta version of 'Skype for Session Initiation Protocol (SIP) for Business Users'. The service allows users to make low-cost calls over the global Skype VoIP system and receive calls directly from any of the 405 million Skype users without connecting to the PSTN and therefore at no cost to the customer. Enterprises can also buy numbers in over 20 countries to receive calls from local users at lower costs. The Skype application integrates with existing PBX hardware and facilitates call-handling functionality, such as routing and conferencing, statistics, phone menus and voicemail systems.

Significance: Skype is working to convert its massive user base into paying customers with some success, increasing revenues by 44% over 2008 to US$526 million, although this is notably barely US$1.30 per user. The number of users has in fact grown more quickly, up 47% year-on-year (y/y) to 405.3 million. The enterprise market is a key source of valuable customers who are willing to pay for communications services and make high use of international calls while being price-sensitive. There has been some reticence from enterprises with regards to VoIP, largely over an historical perception of reliability issues as it relies on a non-managed internet connection and peer-to-peer capabilities. However, this move will help Skype to tap into the enterprise marketplace, leveraging legacy equipment and ensuring the maintenance of legacy system capabilities.

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