Microsoft to Retire Skype, Signaling Shift to Teams
Microsoft is retiring its video-calling service, Skype, which it acquired in 2011 for $8.5 billion. The tech giant announced on Friday that Skype will be phased out in May, with some of its services migrating to Microsoft Teams. Microsoft Teams is its primary platform for video conferencing and team applications. Existing Skype users will be able to use their current accounts to access Teams. This decision underscores Microsoft’s long-term prioritization of Teams over Skype. The move reflects the company’s strategic intent to optimize and streamline its core communication tools as it faces growing competition.
Skype was founded in Tallinn, Estonia, in 2003 by a team of engineers. It was a pioneer in the use of the internet for telephone calls. It utilized Voice over Internet Protocol (VoIP) technology, which converted audio into a digital signal for online transmission. Video calls were introduced after eBay acquired the service in 2005.
According to Barbara Larson, a management professor at Northeastern University who studies the history of virtual and remote work, “You no longer had to be a senior manager in a Fortune 500 company to have a good quality video call with someone else. It brought a lot of people around the world closer.”
Skype facilitated inexpensive communication, including international calls, which was advantageous for small businesses and individuals. Larson noted that Skype allowed “long calls, frequent calls, that were either free or very inexpensive.”
By 2011, when Microsoft acquired Skype from eBay, then-Microsoft CEO Steve Ballmer stated that the platform had approximately 170 million users worldwide. As Ballmer put it, “The Skype brand has become a verb, nearly synonymous with video and voice communications.”
Even as recently as 2017, Skype retained its relevance. The Trump administration, shortly after inauguration, utilized Skype for journalists to pose questions remotely. Microsoft launched Teams a month later, aiming to compete with Slack Technologies, which was rapidly gaining ground in the workplace-chatting services market.
The widespread shift to remote work during the COVID-19 pandemic led to unprecedented growth for Teams, Slack, and newer platforms like Zoom. Similarly, families and friends used these tools for virtual meetings. Although Skype was already declining in popularity by then, it had previously established a valuable link for strengthening remote communication.
Larson also stated “Higher-quality media can really deepen relationships and make people able to work through complex problems much better. Suddenly, this was available to anyone with a decent internet connection. And that was the real sort of revolutionary role that Skype had.”
