GigaOM Pro

Summary:

Skype’s recent plans for an IPO, along with many new features (including some geared for enterprise customers), mean the VoIP carrier is finally crossing from niche tool to mainstream service. But past performance is not necessarily indicative of future results. Skype’s freemium model is risky, and the company’s continued growth is far from certain. The real key to success and a continued revenue stream will be finding a partner that can leverage Skype’s unique offering of a carrier-style business, software and its partnerships with hardware makers and mobile carriers. Cisco, meanwhile, needs a way to separate itself from the herd of telephony vendors like Avaya, Microsoft, IBM and Siemens Enterprise, who all have deep-pocketed desires to unseat Cisco from its leadership position. A partnership with Skype would be a game-changer that would reduce costs, carry technology further into the enterprise and be nearly impossible to replicate. This research note examines the potential advantages and inevitable challenges of just such a union.