Skype crashes for millions of users worldwide, highlights perils of cloud computing

VoIP market leader Skype crashed overnight and is still down for millions of individual users and businesses worldwide, once again highlighting the perils of using cloud-based services for everyday business ventures.

The failure has sparked a wave of outcry all across the internet, with thousands of users tweeting and updating Facebook statuses. The reaction is similar to when other major cloud services such as Gmail and Facebook encounter downtime even for just a few minutes.

In an official blog post, the company said that unlike other types of IM networks, Skype relies on individual connections between computers and phones, and some of these computers act like directories – they are called “supernodes”.

“Under normal circumstances, there are a large number of supernodes available. Unfortunately, today, many of them were taken offline by a problem affecting some versions of Skype. As Skype relies on being able to maintain contact with supernodes, it may appear offline for some of you.”

“Our engineers are creating new ‘mega-supernodes’ as fast as they can, which should gradually return things to normal,” the blog post said.

Skype also warned that several enterprise products including Skype Connect and Skype Manager continued to work. The company depends on these paid services as part of its enterprise offering, as most individual users utilise the free version of Skype.

However, several businesses that use Skype in order to save costs, such as Australian retailers Kogan Technologies, have also seen their networks fail. And because these businesses only rely on VoIP for the entire phone network, they are unable to receive or make outgoing calls.

Skype is the clear market leader for VoIP services, taking up 10% of international voice traffic.

Figures from the company’s briefing to the American SEC show users made 95 billion minutes of voice and video calls during the first half of the year, and 40% of those minutes were in video. Skype users sent 84 million text messages, and as of June 30, the service was averaging about 124 million active users a month.

Ovum research director Kevin Noonan says while it may be frustrating that these services go down from time to time, he also recommends that businesses depending on these services seek out more advanced enterprise-level contracts.

“We’re starting to see a bit of a growing gulf between enterprise-level cloud services and then personal level cloud services.”

“It’s just not appropriate for running a business, particularly in large enterprises, to be depending on these services. We’re seeing more enterprise level services where businesses are signing contracts with telco providers, who then have a back-to-back contract with other suppliers.”

Noonan says that businesses wanting to save costs can rely on cloud computing, but they “cannot blame Skype” if they are using a free service for which they have not signed any contracts.

The outage is even more embarrassing for Skype as it attempts to move away from its associations with former parent eBay.

eBay sold off a 65% stake in the company to a number of private investors including Andreessen Horowitz, Index Ventures and the Canada Pension Plan Investment Board. It was sold for $US1.9 billion, and valued the company at about $US2.75 billion, well under its original price tag of $US3.1 billion.

Skype has previously said that it will seek a $US100 million listing on the American stock exchange, but has also warned that it may not ever be profitable, despite researching new business products and services.