Microsoft has announced plans to retire Skype, a pioneering service in IP telephony, by May 5, 2025. The company intends to replace Skype with the complimentary version of Microsoft Teams. This move signifies the end of an era for Skype, which Microsoft acquired for $8.5 billion in May 2011, approximately 14 years ago.
Jeff Teper, president of Microsoft 365 Collaborative Apps and Platforms, remarked in a blog post, “In order to streamline our free consumer communications offerings so we can more easily adapt to customer needs, we will be retiring Skype… to focus on Microsoft Teams, our modern communications and collaboration hub.” He emphasized that “the way we communicate has evolved significantly over the years.” Skype was created in 2003 by Niklas Zennstrom and Janus Friis, utilizing a peer-to-peer protocol that enabled voice calls over the internet, a technology recognized today as VoIP. The service was purchased by eBay in 2005 for $2.5 billion in stock before being acquired by Microsoft six years later.
In 2013, Skype released its free video app, boasting a simultaneous user count of over 70 million at the time. James Skay, the senior marketing manager for Skype for Business, noted in 2019 that Microsoft had made substantial improvements to Teams based on customer feedback. He asserted, “We now feel we’re at the point that we can confidently recommend it as an upgrade to all Skype for Business Online customers.” Fast forward six years, and Microsoft appears to share similar sentiments regarding the consumer version of Skype.
However, many consumers have shown little interest in using Teams, leading to a lack of engagement. By 2023, Teams Chat had been integrated into the free Teams app, but user interest seemed minimal. Despite a reported quadrupling in minutes spent on consumer Teams calls over the past two years, Microsoft did not disclose the initial figures, and the chat and calling functionalities of Skype have increasingly been overshadowed by applications like Discord.
As the transition from Skype to Teams unfolds, Microsoft seems to have shifted its strategy from enticing users with incentives to a more forceful approach. During the upcoming transition phase, Skype users will have the ability to log into the free version of Teams using their existing Skype credentials, starting with those enrolled in Insider programs. Contacts and chat histories will automatically migrate from Skype to Teams, facilitating the transition.
Additionally, paid Skype features will be discontinued. Microsoft stated that new customers would no longer have access to the paid features that enable international and domestic calls through pay-as-you-go credits and subscriptions. Existing Skype subscribers may continue to use their credits and subscriptions until their next renewal period.
Furthermore, users will be able to access their remaining Skype Credit until after May 5, 2025, when the Skype Dial Pad will still be available through the Skype web portal and within Teams. For a period during the transition, users of both Skype and Teams will be able to communicate with one another. However, this interoperability will cease on May 5, 2025, marking the end of Skype’s operations 22 years after its inception.