Does Skype Outage Expose P2P’s Limitations?

[qi:90] Update: Peer-to-peer by its very nature is supposed to work without a problem, with packets finding their way to good peers, and then moving on to their final destination. The Skype outage – you couldn’t login to your Skype account – that started sometime last night makes you wonder about how resilient are P2P services.

It is still not clear why it happened and what exactly happened. Skype has released no details just yet. Tom Keating says that the problem started after he and his colleagues downloaded some of the new patches Microsoft released to upgrade its operating systems, Windows Vista and Windows XP. [digg=]

Since Skype is a P2P network that relies on other peers for the network to function properly, it’s possible a Microsoft update is causing a conflict.

On the Mac, however, I had no trouble logging in this morning, but the client kept crashing. If a software upgrade from Microsoft (or for that matter any other OS vendor) can render Skype, one of the largest P2P services useless, then P2P economy is standing on shaky ground.

Update: On second thoughts, I want to be clear that if you are going to build a mass market consumer service on P2P and use authentication servers or add layers on top of the basic architecture, then you are on shaky ground and need to build in some sort of redundancy. (Thanks Ethan, for showing me the light!)

Folks at Joost, Babelgum and other P2P companies should be concerned about their business prospects going forward. Venture capitalists who have been funding P2P-based services should take this as an early warning on the fragility of the whole P2P ecosystem, where a small glitch can cause widespread problems.

On the flip side, if Skype’s authentication servers asphyxiated, then let this be a reminder that Skype is not quite your phone company replacement. This must have impacted thousands (if not millions) of companies and web workers who lost money and productivity. (Update #2: Skype blogs says that it is their software issue.)

“The folks who get hurt by this are the Skype based service providers who need the Skype connectivity layer to keep things working,” writes Andy Abramson.