Skype

THE STORY OF AN INNOVATION IN THE COMMUNICATION SECTOR

A case study in “Innovation Management”, B.Sc. 2012

Prof. Dr. Holger Ernst

3rd October 2010

written by

Table of contents

1. Introduction 3

2. Product description 3

3. History of Skype Limited 4

4. Market environment 4

6. Success 6

7. Conclusion 9

8. References 10

1. Introduction

Skype Limited is considered as one of the fastest growing companies ever in terms of user registration. Since its foundation in 2003 by Niklas Zennström and Janus Friis, the company managed to increase its customer base from zero to over 560 million users. Today the brand Skype is the global symbol for Internet Telephony.

Its success and outrageous speed of growth have caught our attention to take a deeper look at this innovation and investigate the reasons for its prosperity.

In this paper we will provide information on the product substance and development, its history and market environment, as well as factors of success.

2. Product description

The company Skype Ltd. has made it their goal to enable the world to communicate. Skype focuses on providing voice-over-IP (VoIP) software applications to internet users, which allows users to make telephone and video calls via the internet. Furthermore, customers are offered a variety of other communication services such as video conferences, PC-to-mobile and PC-to-landline calls, text messages and call forwarding to mobiles and landlines, online numbers, voicemails, instant messaging, file transfer, screen sharing and subscriptions. Most Skype services are free of charge, including Skype-to-Skype communications and the download of the software application. However, the company has extended its communication services from Skype to cell phones and landlines connections worldwide (“SkypeOut”) using VoIP-PSTN gateways. These services are charged by Skype using a debit-based account.

Skype users connect directly with each other, as the Skype software is...