Skype Business Shut Down. But It Was Microsoft's Best Acquisition.

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During the summer of 2021, Microsoft announced that Skype Business would officially be shutting down. At first glance, this seemed like quite a shame given that Microsoft had spent $8.5 billion acquiring the company. Not to mention, all of the effort and time spent on maintaining and improving the platform over the past decade. But, while Skype Business didn’t quite work out, the acquisition of Skype was still a massive success given that Microsoft was able to develop Microsoft Teams based on Skype. While all of the hype for video conferencing centers on Zoom, Teams is actually the real king of video conferencing. In fact, Teams has 270 million active users which is not far behind Zoom’s 300 million. Also, Teams’ users are likely much more profitable than Zoom’s users given that Microsoft primarily targets employers. Looking forward, it looks like it’s just a matter of time until Teams even overtakes Windows in terms of annual revenue. This video explains the acquisition of Skype and why Skype was likely Microsoft’s best acquisition.

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Timestamps:
0:00 - What Happened To Skype
2:52 - The Rise Of Skype
6:11 - The Death Of Skype
9:37 - Resurrection Of Teams
12:05 - The Domination Of Teams

Resources:

Disclaimer:
This video is not a solicitation or personal financial advice. All investing involves risk. Please do your own research.

[GustavoSantos]

This video omits some important details from the viewers. The first one is that Microsoft already had a videoconferencing software targeted at business users, called Lync, and later renamed Skype for Business. Secondly, teams was free for most Office 365 users for a very long time, but it was mostly seen as a (bad) Slack alternative. In 2019 this changed as Microsoft started to finally invest more resources in the product and actually listen to what it’s business users needed.

[kappatoflash]

The power of Teams is not just it's video conference and chat features, but it's integration with the entire O365 suite. If you set up your Teams channels properly with all the features that they offer, you can turn it into a state-of-the-art knowledge database. People have no idea how powerful and secure Teams is compared to Skype lol

[Ataraxia_Atom]

Microsoft has honestly been killing it with acquisitions. They're above and beyond the front runner in so many aspects

[schnitzelsemmel]

Skype and Teams have one massive advantage to Zoom: You don't have to do "meetings", you can call people individually like with FaceTime/Whatsapp as well.

[dookie]

The peer to peer aspect was the biggest problem with Skype. It really didn't work with multiple devices like a desktop and smartphone. The rise of phones and tablets meant that Microsoft had to spend years reinventing the wheel, while all the competitors could architect their apps to be account based, not device based, from the ground up. That's why Skype fell behind so hard in UI and features.

[Shuichii]

I still use Skype for the simple fact that it is the only real time translation voice call. Seems a lot of people don't know about it but you can call someone and speak to them in real time in a different language. The voice is robotic, it isn't great and gets some stuff wrong, but I can't really find anything else like it, especially for free.

[HenryBloggit]

My problem with your hypothesis is that Microsoft could have made Teams without ever buying Skype. They didn’t use any Skype code to make Teams. “Skype for Business” was just a rebranding of Microsoft Linq, which was a completely separate business voip product that already existed before they bought Skype. Linq -> Skype for Business -> Teams had absolutely nothing to do with their 8 billion Skype purchase except that after they bought it they slapped the name “Skype for Business” on Linq, temporarily, and then changed its name to Teams. Absolutely nothing of what Microsoft paid 8 billion for exists in Teams. It was always a completely separate product line.

[nkj]

One thing I don't understand is how the aquisition actually helped Microsoft. It seems like Teams created their own userbase. So if it's not the users that made the aquisition worth it, then what is it? It's not the technology, cause they scrapped that too when transitioning from p2p to server

[LNCRFT]

To be honest, I never hated Skype at all. In fact, it has carried me through my childhood. Everyone used it, especially in the early to mid 2010s. It was just a nice time but nowadays, Discord has replaced it entirely for me as it has all the features I always liked about Skype.

[triadwarfare]

I don't think they really shut down Skype business. They just converted it to Teams.

Skype business was just a rebranded MS communicator then Lync. Teams was just an overhauled version of Skype for Business and initially had lacking features from Skype in its first release, and added features since.

[matekiss]

"Launch of Skype for Business in 2015"??? Bro, what about Skype for Business 2013? Lync 2010? Not to mention its predecessor, Office Communicator 2007... More research would have been better around this topic.

[NEXTGENCOMEDYXBOX]

Everyone at my company is slamming our employer for attempting to switch to skype. We were using slack for years. needless to say teams and skype is gone. and slack is here to stay

[nemannerous]

Skype for Business was not part of the Skype acquisition. After Microsoft acquired Skype, they rebranded Microsoft Lync as Skype, since Lync was relatively unknown as a brand. The executable is still called Lync.exe. This product, their legacy Lync product, is what they shut down. It was not related to the Skype acquisition in any way, beyond the name. The video kind of falls apart from there.

[masonkent]

RIP Skype, i used to use it all the time

[thomasreese]

Skype was a solid service. Microsoft killed it with required Microsoft integration (that didn't migrate users correctly) and a completely botched redesign that made the core functionality unusable

[danielvasquez]

Man I remember Skype before zoom and Microsoft teams!! Those were the days man!!!

[Kingyoshi]

Teams is awful for anything beyond basic Meetings. If you need to stream larger complex events (think thousands of people watching, fancy affects etc.) Its awful.
Additionally, it has lower reliability then Cisco and Polycom products. (Even lower then Zoom...)

The only reason it was able to do so well is because it comes packaged with Microsoft's other products and Microsoft originally forcefully installed Teams on everyone's computers even if you did not want it.

[blahblahhaha]

I used to use Skype on my desktop all the time back in 2008-2010 but then had no reason with a smart phone anymore. I honestly didn't know what"Zoom"was until the pandemic.

[naveenvenkateshk]

My office was using Skype for communications when I had joined them in 2019. By April 2020 I was told that we would need to transition to MS Teams and that Skype for business was going away. We switched to Teams and its one of the best tools that we use at work. It's very convenient and easy to use. I have tried Zoom but I would prefer to use Teams every chance I get. Cisco's webex is also nice a product for large scale meetings though. Teams utterly fails in that dept. Webex in 2022 is way better than what it was before. Before 2022 it was really crap. I would prefer Skype for business over Webex earlier.

[leighcounry]

Keep in mind, and as you already pointed out, you acquire a firm/technology so that your competitor do not acquire it and they do not get an opportunity to shorten the development time.