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Is the Skype outage really a big deal?

Skype's free IP telephony application experienced a major outage on Thursday, but things seem to be back to normal as pundits flap their gums about what it all means.

Skype's service appears to be up and running again for the most part, after software issues Thursday prevented millions of Skype users from signing on to the IP telephony application.

Skype officials say the outage was not due to a cyberattack or network upgrades. Instead they attributed the issue to "a deficiency in an algorithm within Skype networking software. This controls the interaction between the user's own Skype client and the rest of the Skype network."

As of 11 a.m. GMT Friday, the company said that the software had started to stabilize. Some users have reported spotty service, but when I tried the service earlier today, it worked just fine.

Pundits and bloggers are already lining up to take swipes at Skype, which is owned by eBay. Some say the service hiccup could hurt the company's reputation and potentially cost them users.

But I disagree. It was one outage that lasted less than 24 hours. I'm sure it inconvenienced some people. But I'm guessing that most of the 220 million registered Skype users didn't even notice. Why? Well for one, most of them don't rely on Skype as their only form of voice communications.

And the reason is simple. Skype or any other PC-based voice over IP application still isn't as reliable or convenient to use as a traditional landline phone or a cell phone. And most people get that. Skype augments their other communications. It doesn't replace it.

Take me as an example. I'm an avid Skype user. I use the service mostly to chat with my friends in Europe. I have a regular phone line at home, a work phone and a cell phone. So Skype isn't the only means by which I can make phone calls. I use it mostly because it's cheap to make international calls. And if I'm on my computer, it's convenient./p>

But I've noticed that even when Skype isn't having a widescale issue with its software algorithms, I often have to call and then disconnect two or three times before I get a clear connection. While I'll admit this can get annoying, it doesn't bother me too much for two reasons. One, when the call does connect, the call quality is often way better than I get on my cell phone.

And secondly, most of the Skype calls I make are to other people using the Skype application, so it's free. And I have a different tolerance for quality and reliability when something is free. (On the other hand, I get really annoyed when I can't get a cell phone signal or my signal drops, because I'm paying $50 a month for the service.)

I don't think I'm the only person who feels this way. Skype has never marketed itself as a replacement phone service. And that seems to have been a smart strategy. Because Skype doesn't encourage people to disconnect their existing phone lines or quit their current wireless service, the company knows that people won't have to rely on its service. That is one of the main reasons the company doesn't have to comply with the Federal Communications Commission's E-911 mandates. In general, the expectation for Skype and other PC-based telephony services is lower.

By contrast, Vonage, the other big name in VoIP, set the bar high in terms of expectations. The company marketed itself as a replacement to existing home phones. And as a result, it had to deal with all the headaches of complying with E-911 and other FCC requirements.

A quick look at the subscriber numbers helps paint a picture of which strategy seems to be working. Vonage, which is in a legal tussle with Verizon over patents, has been losing customers with its most recent total at about 2.45 million monthly subscribers. Skype says it has 220 million registered users worldwide.

I think the fact that the Skype outage even stirred a buzz is a testament to the success of the application. And I find it really hard to believe that some 220 million folks are going to delete the Skype application from their desktops just because of one service outage. Then again, I also didn't believe that millions of corporate BlackBerry users would ditch Research in Motion's service when the company experienced an overnight outage just a few months ago.