Skype Teams With Avaya to Boost Its Business With Corporations

Skype Technologies SA, the biggest provider of international calling, announced a partnership with Avaya Inc. that’s designed to get its services used by more corporations.

Beginning next month, Avaya will let its customers route calls easily through Skype’s service, the companies said today in a statement. In the second half of next year, they will integrate their technologies more deeply, allowing Skype’s video and instant messaging to work over Avaya’s network.

Skype, based in Luxembourg, started as a free, Internet- based calling system for consumers, and now it’s trying to expand sales of premium services for companies. The boost from Avaya, the biggest maker of corporate phone equipment, will establish a sales channel for Skype’s product and may increase its credibility among businesses.

“Our agreement with Avaya is evidence of how far we’ve come along in a short amount of time,” David Gurle, vice president of Skype’s business unit, said in an interview. “We consider this relationship to be a very strategic one.”

Avaya will promote Skype’s service through direct sales and distribution channel partners. Gaining Skype and its 560 million users will help Basking Ridge, New Jersey-based Avaya differentiate itself from Cisco Systems Inc., which also sells phone equipment to companies.

Security Concerns

Skype historically has been stymied by companies that have blocked employees from using its service because of security concerns and an inability to record calls and monitor usage, as required in certain industries such as health care and finance. Skype hopes to address those concerns when it introduces the integrated service with Avaya next year.

Besides letting users use Skype’s video and instant- messaging features on the Avaya platform, the companies will let businesses record calls and monitor usage.

Getting information-technology managers on board is crucial if Skype wants to find new revenue streams beyond the pennies per minute it charges users to call mobile phones and land lines. Only about 8 million of its registered users pay for services such as voicemail or call forwarding.

Avaya and Skype share a common owner. A group led by private-equity firm Silver Lake bought Skype last year from EBay Inc. for about $2 billion. Avaya, once part of Lucent Technologies Inc., went private in 2007 through a takeover by Silver Lake and buyout firm TPG.

To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net.

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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