Skype is product Microsoft needs to stay in the game

Richard Edwards, Principal Analyst, Ovum.

AUSTRALIA: With Apple FaceTime -- a competitor to Skype -- now available on the Mac, iPhone 4, iPad 2 and the new iPod touch, it is definitely now or never for Microsoft. There are other products and companies out there that offer a much better fit architecturally than Skype (and they come with a much cheaper price tag too), but Skype is undoubtedly the product Microsoft needs to stay in the game.

Skype is arguably the most successful real-time social communication platform on the planet, and its $8 billion price tag means that only companies such as Microsoft have any chance of acquiring it. But is it a good fit for Microsoft's business model? Answer: Yes. It's popular, it runs on Windows PCs, and later this year it will be available on Windows Phone 7. Perhaps, more importantly for the rest of us, Skype also runs on other computers, such as Mac and Linux, and mobile phones too, such iPhone and Android-based devices.

Skype is used by millions of consumers around the world to make free Internet telephone calls and cheap calls to landlines, but we should not forget that Skype for Business also exists, making it an attractive, low-cost option for smaller companies looking for voice and video conferencing capabilities. For enterprises, Skype Connect lets organisations integrate Skype with their SIP-enabled PBXs (private telephone switchboards), and Skype Manager enable the business to track, trace and manage the use of this facility by employees.