Skype, the pioneering technology company founded in Estonia, will cease operations in May this year, marking the end of an era for one of the world’s most influential communication platforms. Acquired by Microsoft more than a decade ago, Skype paved the way for modern technology start-ups in Estonia and around the world, and despite its closure, Skype’s influence on the tech industry will remain, on Tuesday, the 4th of February, reports Estonian media ERR.
At its peak, Skype had 150 million monthly users. However, its role has now been replaced by newer platforms such as MS Teams and Zoom.
Skype’s influence goes beyond free internet and video calls, inspiring Estonian tech companies such as Wise and Bolt.
Skype was founded by Swedish and Danish entrepreneurs Niklas Zennström and Janus Friis, and the platform was developed by Estonians Jaan Tallinn, Ahti Heinla and Priit Kasesalu. It was developed in the early 2000s in a Soviet-era building in Tallinn and was initially called “Skyper” (short for “Sky peer-to-peer”) and was launched on the 29th of August 2003.
At the time, Skype was not the only VoIP (Voice over Internet Protocol) service, but it quickly became a huge success, allowing people to make free internet calls around the world. All that was needed was for both users to have Skype installed and an internet connection. It could also make toll calls to landlines and other non-Skype numbers.
ON THE FIRST DAY ALONE, SKYPE WAS DOWNLOADED AROUND 10 000 TIMES. ONE MILLION ACCOUNTS WERE CREATED IN TWO MONTHS.
It also helped put Estonia on the world technology map and became a national symbol.
Reflecting on the company’s journey, Stan Tamkivi, CEO of Skype Estonia from 2005 to 2013, said that although Skype’s success seemed to have happened overnight, the team had spent many years working on unsuccessful projects before their breakthrough.
“At the time, most people had desktop computers without headsets and microphones, so the idea that everyone would soon be able to make calls over the internet seemed strange,” he said, stressing that success required “the courage to do things differently”.
Martin Villig, co-founder of Bolt, compared Skype to Google and Facebook, noting that it was not the first of its kind and had many competitors, but it stood out for its simplicity.
“Before Skype, others had tried to build the same service,” he said. “But it had the advantage of being very easy to install and use.”
Tamkivi recalled that “one of the tests we used was the ‘grandmother test’. Could Grandma download Skype, set it up in 10 minutes and call her grandchildren without help? And yes, she could.”
Villig added that Skype did not need much marketing because everyone was talking about it.
THE GLOBAL REACH OF SKYPE WAS SO GREAT THAT ENGLISH AND OTHER DICTIONARIES INCLUDED THE VERB “TO SKYPE”.
With the advent of smartphones, the Skype platform became available also in this format.
Although Skype’s more than 20 years of activity are coming to an end, its legacy is still significant. Martin Villig stressed that Skype’s success started with the confidence and experience of its founders and the capital raised from its sale.
Skype was first sold to eBay in 2005 for 2.6 billion US dollars and to Microsoft in 2011 for 8.5 billion US dollars. This seed capital helped to launch Bolt (formerly Taxify) and has directly or indirectly helped to create many other companies around the world.
Stan Tamkivi noted that more than 900 start-ups have been founded by former Skype employees. He stressed that these companies have created trillions of dollars of value in the global economy, so their impact is undeniable.
Villig mentioned that he himself had used Skype for group chat recently, but two months ago the group migrated because most of his friends switched from Skype to another programme.