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What Is Skype
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Skype Extras and Presence

So far, we've looked at how Skype can replace a standard phone or cell phone. No big deal, aside from the drastically improved call quality. But dig a little deeper into what else Skype offers now and plans to roll out soon, and you realize Skype is the most advanced voice communications tool available today.



What you don't realize, because Skype doesn't make a big deal out of it, is that every Skype connection uses 256-bit encryption. The call quality astounds people, so no one guesses the encryption is automatic and engaged on every connection. You must move to restricted military telecom hardware to get a higher level of encryption than what Skype provides, free, on every call. Look for some serious hand-wringing among law enforcement and the Department of Homeland Security when they finally realize how prevalent Skype is worldwide.

Skype's standard features are:

  • Talking free to other Skype users
  • Conference call with up to five total Skype users
  • File transfers
  • Chat (instant messaging)

That's a short list. Instant messaging with Chat works as expected, but only within the Skype application. No connections to outside IM services are yet available. File transfer, also within the Skype application, is slow but encrypted. Technical support personnel will use Skype to IM usernames and passwords because, unlike other IM systems, Skype IM is secure.

One of the best business uses of Skype is for conference calls. Costs to arrange a five-way conference through normal telecom providers start high and add up quickly, but Skype connects users for free. At least two conference phone vendors now include USB connections, and adapters for existing conference phones (USB to RJ-11) are available. Add in the higher quality of Skype calls, and the free conferencing functions via Skype make excellent economic sense for companies large and small.

Notice something critical that's missing? The ability to call regular phones and have regular phones call you on Skype. More on that shortly.

Skype's optional features are:

  • SkypeOut
  • Skype Voicemail
  • SkypeIn (beta)
  • Skype Zones (beta)

SkypeOut, Skype's first product that generated revenue, lets Skype users call normal phones. Currently, the price is under 2 cents per minute, but you must buy a minimum of 10 euros (about $13.50) of calling minutes.

Quality of Skype-to-PSTN (Public Switched Telephone Network) calls too often drop below acceptable standards. The same goes for SkypeIn, the service assigning PSTN phone numbers to Skype users for incoming calls. Voice mail, the lack of which created many Skype user complaints, works quite well.

"Presence," the ability to locate and reach others over the network, adds to Skype's value. As with expensive enterprise network offerings, Skype clients show availability based on keyboard activity. When a user logs in to Skype from multiple clients, calls and messages appear at all locations, making it easy to pick up connections no matter where the person may be. Adding to this capability is Skype Zones (beta), which uses wireless hot spots for Skype connections.

Skype recently offered developers ways to connect to the Skype application, and many companies are hitching their products to the global Skype bandwagon. One of the most successful is VSkype and its video offering running over Skype connections.

Skype Limitations

Two major weak points will keep Skype from taking over the telecommunications world, in spite of what Skype fanatics proclaim. First, relatively few people will give up a "normal" phone for a PC-linked Skype connection. New products, such as standard phone handsets with USB connectors, help blur the line separating Skype from the rest of the telephone world, but that line remains. I believe Skype will remain a niche product, although that niche will widen each day with 150,000 more downloads from Skype.com.

Second, and potentially more damaging to a Skype worldview, is Skype's completely proprietary nature. Open source fans don't appreciate Skype's rejection of open source values and standards. Large companies don't appreciate Skype's way of worming through corporate firewalls.

Two major computer-based phone products that do follow standards, SIPphone and FreeWorldDialup, have tiny market share compared to Skype but have the weight of internet standards on their side. Their limited market share will not threaten to overwhelm Skype but may grow large enough to push Skype to involvement with the standards community. That probably won't happen until at least 2008, and will likely depend on how Microsoft implements Voice over IP support in Windows Vista, which will hit the streets in 2007.

Skype may not take over the world. However, Skype makes the world's highest-quality phone connections available for the world's lowest price: free.

James E. Gaskin has been solving computer and network problems for businesses small and large since 1984. He writes books, articles, and jokes about technology and real life. In 16 books and hundreds of articles, network consultant Gaskin tells people faster, cheaper, newer, and smarter ways to connect to each other and the world. He also maintains the site for his newest book, Talk Is Cheap.


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