Tech at Work: Is Skype VoIP Ready for Business? Tennessee

For years big businesses have used Voice over IP systems--phone services that use the Internet--to save on telephone costs. But it's only recently that small businesses, which typically aren't ready (or willing) to make a wholesale switch away from traditional local phone service, have been checking out the cost savings and voice quality by using VoIP on a line or two.

Skype, which started as a personal voice chat and video phone service, now claims more than 100 million users. The company recently introduced a service aimed at small businesses. I tried out Skype's business service.

To use the business service, you set up one or more groups and invite existing Skype users to join them. Once they're under the umbrella of your group, you can conveniently centralize account payments. You may purchase up to 250 euros (about $316) of prepaid Skype services for the group. Then you can set up individual users for automatic top-up, meaning that Skype will replenish their account balance by automatically charging the group account. Top-ups are processed overnight, whenever the individual account balance drops below half the top-up amount you establish. The service features a control panel that lets you easily manage the group account.

Unfortunately, that's pretty much it for Skype's little leap forward to serve the business market. There are no added telecommunications services. At the very least, I expected better account administration tools aimed at businesses, such as postpaid group billing (with approved credit) and centralized service usage analysis.

Skype charges by the minute for its SkypeOut service, which offers calls to conventional land-line telephones. Per-minute charges start at 0.02 euro (about 2.1 cents), and there's no monthly minimum. Until the end of this year, users in the U.S. and Canada can make free SkypeOut calls to both landline and mobile phones in those countries.

Skype requires you pay in advance for its services, a minimum of 10 euros (about $12.50) at a time. Your credit balance is good for 180 days since your last call or purchase.

You don't have to buy a router to use Skype's service, though you might want to. You do need to download the free Skype application and install it on your PC. (Read "First Look: AIM Phoneline and Skype 2.5" for a review of Skype's latest software.) Depending on your calling patterns and service requirements, moving to Skype could save you money.

But there are some potential downsides. Since Skype shares some of its customers' network resources, some ISPs prohibit its use (some ISPs might block VoIP altogether, actually). For example, Skype could designate your business's PC as a supernode--a sort of peer-to-peer server for Skype traffic. I have read reports of some users whose networks were overwhelmed by sharing requests from the Skype network until they adjusted their connection, putting it behind a firewall.

How does the audio quality compare to that of a conventional landline? That depends on your Internet connection and audio device. I've gotten the best sound quality from a USB headset, because its digital connection is superior to the analog technology of older headsets. You can also plug in an analog headset to your PC's sound card or purchase a USB interface box to plug in your existing telephone.

At first, I noticed a bit of digital stutter on the calls, but I was able to eliminate this problem by installing an expansion card with a better USB controller. On some SkypeOut calls, people at the other end told me my voice sounded faint. The sound quality when using Skype to call another Skype user was usually excellent--better, in fact, than usual telephone service. A bonus: Skype-to-Skype calls are always free.

In general, business users will likely want better services than those Skype currently offers--for example, consolidated reporting of calls within the group. However, Skype can save you money if you're willing to put up with the odd glitch and a lack of business-level call reporting.