Section 2.1. Hacks 1324: Introduction

2.1. Hacks 1324: Introduction

For some people, Skype might be a sufficiently interesting application of VoIP technology to justify playing with it. For most people, however, the motivation for bringing Skype into their life will be based on simple economics. Skype has the potential to save you money; in fact, quite a lot of money!

In this chapter, I will help you get a handle on whether Skype will save you money and, specifically, how much money. Given the wide range of telephone services that Skype can potentially replace, or complement, I cannot cover every scenario. But this chapter does provide some ways of looking at the potential savings and some tools to quantify those savings. Your goal is to estimate these savings with a sufficient margin for error so that you will feel confident enough to make a decision: switch to Skype, or stick with what you've got.

Switching to Skype is not an all-or-nothing proposition. You may choose to use Skype merely as an adjunct to your existing phone services. Alternatively, you may choose to run Skype in parallel with your existing setup for a while before switching fully to Skype. If you're bold, you may leap right in and make Skype a full-blown replacement to your existing telephone system. Whatever approach you take, when figuring savings your focus will necessarily be on the long-term savings of your telephone system as it will look sometime in the future. For this reason, and as an aid for comparisons, I will express savings on an annual basis.

When thinking about savings that stretch far into the future, it is necessary to think like an economist to gauge your true lifetime savings. Savings from using Skype are likely to persist long into the future, so a $100 annual savings is $100 saved this year, next year, and every year beyond that. Such a series of cash savings stretching as far as the eyeor at least the imaginationcan see is termed a perpetuity. A $100 perpetuity is clearly worth much more than just $100, as it is really $100 stacked on top of $100, on top of another $100, and so on, as the years pass by. For example, if you figure that by switching to Skype you will save $500 per year, just imagine having twenty-five $20 bills counted into the palm of your hand at the end of the first year, and then again at the end of the second year, and then again and again year after year.