Microsoft is officially shutting down Skype on May 5, 2024, marking the end of a two-decade-long journey for the internet calling service that revolutionized global communication. Founded in 2003, Skype disrupted the landline industry with its pioneering peer-to-peer (P2P) technology, allowing users to make free voice and video calls. However, the platform struggled to keep pace with modern competitors like Zoom, Slack, and WhatsApp, particularly during the pandemic-driven surge in remote communication.
Microsoft, which acquired Skype in 2011 for $8.5 billion, announced that the decision aligns with its strategy to consolidate its communication tools and prioritize Microsoft Teams, which now boasts 320 million monthly active users. The company assured that existing Skype users would transition smoothly, with their contacts, chats, and message history migrating automatically to the free version of Teams.
Why is Microsoft Retiring Skype?
Despite its early success, Skype’s decline was largely due to its technological limitations in the smartphone era. The original P2P architecture that made Skype popular in the 2000s was not well-suited for mobile devices, leading to performance issues. Meanwhile, Microsoft aggressively promoted Teams, integrating it with Office 365 to attract corporate users—once a stronghold for Skype.
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During the pandemic, while Zoom saw an explosion in usage, Skype’s user base remained stagnant at around 23 million monthly users by 2020. Microsoft gradually shifted its focus away from Skype, first phasing out support for Skype credits and phone numbers in December 2023 and now completely discontinuing the service.
Jeff Teper, President of Microsoft 365, emphasized that Skype users remain in control of their transition. “They can migrate their conversation history and contacts to Teams or export their data if they prefer to move on,” he said.
Major Changes for Skype Users
One of the most significant changes is the removal of Skype’s telephony features, which allowed users to call regular phone numbers, landlines, and international numbers. Microsoft cited declining usage and the widespread adoption of VoIP (Voice over Internet Protocol) services as reasons for the decision.
For users with existing Skype credits or subscriptions, Microsoft will honor these within Teams until the end of their next renewal period. However, after that, Skype Number users must port their number to another provider, as Microsoft will no longer support this feature. Amit Fulay, Vice President of Product at Microsoft, stated, “If we look at the future, that’s not a thing we want to be in.”
Skype users will start seeing prompts to migrate to Teams in the coming weeks. Microsoft has also introduced a tool for users who prefer to view and export their Skype chat history instead of migrating.
What’s Next for Microsoft?
With Skype’s retirement, Microsoft is doubling down on Teams for consumers, which was first introduced in 2020. At the time, Microsoft had assured users of its commitment to Skype, but the company’s gradual shift toward Teams signaled an inevitable phase-out. “We waited until Teams adoption reached the right scale before making this move,” Teper explained.
Microsoft has assured that there will be no job cuts following Skype’s shutdown. Instead, its engineering teams will continue working on enhancing Teams with AI-driven features and improved user experiences.
The shutdown of Skype marks the end of one of Microsoft’s most high-profile acquisitions—one that once reshaped global communication but ultimately failed to evolve with the times. While Skype played a crucial role in the rise of digital communication, its retirement reflects a broader industry shift towards seamless, integrated platforms like Teams, Zoom, and WhatsApp, leaving behind a service that once connected the world with just a ring.