Skype is an internet telephony provider, where users who have installed the Skype client on their computers can talk to each other free of charge using VoIP (Voice over IP). The Skype client is also available for free and the program can work across firewalls and NAT, thereby allowing anyone on the internet to talk to anyone else.

Skype was developed by the founders of KaZaA and is currently owned by eBay.

For communication with traditional phone systems, Skype has a paid service which allows a computer to dial and receive calls from traditional phones. In the paid service, voicemail is also supported.

Skype maintains the users contact lists online supports video conferencing.
Skype is platform independent and can be installed on Windows, Mac and Linux. However, the functioning of Skype is not a roller-coaster ride with Linux and Mac. It works best with Windows. Skype also works with PocketPC.

Since Skype uses a peer-to-peer model rather than the traditional client-server model, the infrastructure can scale up very easily without any need for major upgrades. Incidentally, it is rumored that Skype has to manage only the login servers and the entire routing is taken care of by the peers. As of this writing, 100 million plus customers are serviced by Skype.

The unpopular part of Skype is the mechanism for call routing. Let’s say, UserA is trying to communicate with UserB. The call from UserA to UserB may happen directly or can be routed through another user, UserC. In this case, UserC becomes a ‘Supernode’ and is functioning as a router between UserA and UserB. This unduly penalizes UserC for being a part of the Skype network. Also, the software is a closed source software and proprietary. Hence no customizations or add-ons can be added by software developers.

Although the product has not been reverse-engineered by independent developers, Skype is believed to have made good use of encryption technology in its product and the software codes are well-written.

The average age of Skype subscribers is 29.7 years. About 46% of the subscribers are from Europe and 13% from China. These numbers are derived by SR Consulting, which reviewed some 4 million users profile of Skype.

Skype client is very easy to set up. For people who have not set up a Skype client, here are the steps:

1. Download the software.
2. Install the software. It automatically configures itself for your computer and network.
3. Register as a Skype user.
4. Get a headset for your computer.
5. Locate another Skype user. Searching tools make this easy.
6. Click on a Skype contact name. You can do this from a variety of places within the client application.
7. Talk free to people anywhere in the world.

The clarity of the call in Skype is amazingly clear and most people don’t appear to be talking from the other side of the world.

Apart from making regular calls to Skype users, it also facilitates conference calls between a maximum of 5 users, file transfers and instant messaging.

Netgear recently announced a Skype compatible phone. The phone removes the dependency of placing calls from the PC. Instead it connects directly to a WiFi router for connection. Similar products from other companies are also in the pipeline.