Microsoft-owned Skype has quietly discontinued allowing users to top-up their accounts with credit and purchase Skype phone numbers, instead pushing users towards monthly subscription plans. This shift to a Software-as-a-Service (SaaS) model is likely to impact millions of users who rely on Skype's phone functionality.

The change was not officially announced by Microsoft, but was discovered last week through a response from a volunteer moderator on a Microsoft forum to a user who was unable to add credit to a Skype account. A Microsoft spokesperson confirmed to TechCrunch that the company has permanently halted new sales of Skype credit and Skype numbers, citing the need to "continuously evaluate product strategy based on customer usage and needs."

Existing Skype phone numbers will continue to work, and existing Skype credit can still be used, but users must use their credit at least once in a 180-day period for it to remain active. The move marks a significant shift in Skype's business model, which has traditionally generated revenue by charging users for calls to mobile phone numbers or landlines, as well as offering paid services like local phone numbers.

Skype has a long history as a trailblazer in internet calling and messaging services, founded in Europe in 2003. It was acquired by eBay in 2005, then sold to a private consortium in 2009, before being acquired by Microsoft in 2011 for $8.5 billion. Despite its early success, Skype has struggled to keep pace with newer competitors like WhatsApp and Zoom, which have become dominant players in the messaging and video conferencing markets.

Microsoft itself has also been competing with Skype through the launch of Teams in 2016, which eventually consumed Skype for Business. As a result, Skype has been on a decline, with Microsoft not formally breaking out usage numbers for the service in some time. The last reported figure was 36 million daily active users, but it's unclear how many active users Skype has today.

The impact of this change is likely to be felt by tens of millions of people who used Skype for its phone functionality, a feature that modern messaging apps like WhatsApp don't offer (although Zoom does offer a product called Phone targeted at the business market). Confusingly, Skype still advertises both Skype Credit and Skype numbers in various places on its online properties, and users can still attempt to purchase credit, although payment attempts will not go through.

A Microsoft spokesperson acknowledged the issue, stating that the company is "aware of this issue and working on making the necessary updates." The shift to a SaaS model marks a significant change in Skype's strategy, and it remains to be seen how users will respond to the new monthly subscription plans.

In the broader context, this move highlights the ongoing evolution of the technology landscape, as companies adapt to changing user behaviors and preferences. As messaging and video conferencing services continue to converge, it will be interesting to see how Skype's new strategy plays out in the market.