Microsoft Is Shutting Down Skype

Once upon a time, Skype was the king of internet communications. Launched in 2003, it revolutionized voice and video calling, connecting millions of people worldwide. But everything changed when Microsoft acquired Skype for $8.5 billion in 2011. What seemed like a promising move soon turned into a disaster. It is probably one of the best examples of revolutionary startup technology being destroyed by a big tech acquisition. The time has arrived for Skype to be shut down for good. On May 5th, 2025 Microsoft will retire Skype in favor of Teams. Skype users will have an option to transition to Teams, or take their data and move on.

Skype has lost many users since it became a Microsoft product, yet it still continued to exist as a valuable messaging and video conferencing app for a very long time. Skype as a startup was a pioneer in internet communications, and introduced higher quality product, and managed to build a global brand. Skyping even entered into the English dictionary as a new word. Microsoft and others had their own internet communications solutions as well. MSN messenger was one of the contenders in the space. After realizing the superior technology, instead of competing, Microsoft decided to acquire Skype. Not too long after MSN messenger was discontinued. That time Microsoft shut down a product it has developed in favor of Skype. Now things have changed. Skype is being shut down in favor of another Microsoft developed product, Teams.

Skype was a great tool of its time. I think corporate bureaucracy played role as obstacle in innovating, and din't let Skype to grow to its fullest potential. I think it had great potential to become one of the top choices for internet communications. Such bureaucracy and flawed businesses decisions, prevented Skype to become what ended up being today's Telegram, Whatsapp, Discord, etc. One of the worst decision Microsoft makes has to do with forcing integration with Microsoft ecosystem. Some things integrate well, others don't. Not everything have to be part of the ecosystem. Some things can be their own category. They may not even require large teams to maintain. It shouldn't even cost a lot to continue developing and maintaining apps like Skype.

I don't see Skype as a competition to Teams. Neither I see Teams as a substitute for Skype. There was a time when I used Skype almost daily, for business and personal communications. While I don't use it these days, I still have old contacts from the past that reach out with business offers and questions. The other problems with Microsoft's Skype management were UI overhaul that didn't do any good, poor performance and reliability issues. It definitely could have become something much better without many updates. Sometime overdoing things make it worse. Teams has become frequently used app for video conferencing and team collaborations in the business world. Many companies who already rely on Microsoft products, integrated Teams to daily operations. During pandemic Zoom showed the true power of high quality video conferencing among teams and co-workers. Microsoft capitalized on the need for reliable video conferencing on regular basis and did well with Teams.

Teams is used daily in many workplace settings. Even though many people are back to working at physical locations, the power of video conferencing has been unleashed and is norm these days. Teams integrates well with other Microsoft products like Office 365, Outlook, SharePoint etc. There is job well done by Microsoft here. However, I do not like Teams. It does have many drawbacks as well. It can be better, but it works. It works for meetings in a workplace or remote work. It works for integrating work flow and files in other Microsoft products. However, it is terrible for personal use. It is not great for anything else. Its mobile call communications are unreliable and often perform poorly. Its mobile messaging is not great either. Skype on the other hand is still much better for calls and messaging.

I really do not understand the move by Microsoft. I don't see Skype users moving to Teams. Those who do will probably use Teams for a brief time. It won't take them long to discover better alternatives. There are plenty of them. Microsoft has been very successful with the products that sell to companies. Companies and organizations rely on Microsoft products, and many IT specialists are trained in Microsoft products. This makes it easy for Microsoft to push these products, even if the product is not the best. It would be very costly for companies and organizations to switch to different systems, and there aren't any available. IT departments usually make the decisions regarding what software to use, and for them too, the answer is easy, whatever Microsoft offers. This business strategy worked well for Microsoft, and unlikely stop anytime soon. It would be great to see some competition in this space. That is why Microsoft will continue with the same strategy that has worked for decades.

However, it doesn't always result in better decisions for the company and its products. When Satya Nadella became the CEO of Microsoft, he implemented some changes companywide. One of these changes was to remove distractions, discontinue projects, and focus on those that have been the core business and produced results. Among them was the Azure, Xbox, Office 365, etc. These are the money makers. Their commitment to cloud infrastructure did work, and their AI partnerships became the best business decision in the recent years. Skype wasn't discontinued at that time. It's not the best decision to discontinue now either. However, the challenge for Microsoft is focusing on integration of software for ecosystem. That they weren't able to do with Skype. Maybe because Skype would be best on its own. That may not be an option for companies like Microsoft.

This may be the end for Skype. But what it has accomplished played a significant role in the advancement of internet technologies, and it will go into history books as one of the greatest innovation. There are lesson for startups and businesses to learn from Skype's story. I can't say I will miss Skype, but I am sure I will retell its story in the future multiple times. It is a great story. All stories come to an end.