Skype hires Cisco's Bates as CEO

Skype has named Tony Bates as its next CEO, hiring him away from Cisco Systems, where he led some of the company's core businesses. Bates brings deep experience in networking for enterprises, small businesses and service providers after 15 years at Cisco.

Most recently, he was senior vice president and general manager of the Enterprise, Commercial and Small Business Division, reporting to Chairman and CEO John Chambers. He will take over Skype at the end of October, with Adrian Dillon, its chief financial and administrative officer, serving as interim CEO until that time. Bates will also become a member of Skype's board of directors. He replaces outgoing CEO Josh Silverman.

Skype has its roots in free or inexpensive VoIP (voice over Internet Protocol) services but has been expanding into text and video messaging. Acquired by eBay in 2005, the company was taken private last year by its co-founders and a group of investment companies led by Silver Lake Partners.

Earlier this year, Skype registered with the US Securities and Exchange Commission for an initial public offering. The company claims 560 million registered users around the world.

Cisco had said in a blog post earlier on Monday that Bates was leaving to pursue an unnamed opportunity. Padmasree Warrior, Cisco's CTO, added the title of senior vice president and general manager of the Enterprise, Commercial and Small Business Development Group.

Bates has also led Cisco's service-provider equipment business and was instrumental in creating the CRS-1 carrier router and the Cius enterprise tablet, according to Cisco.

Skype could use Bates' experience after several shots at the enterprise market produced lackluster results, according to analyst Brian Riggs of Current Analysis.

"This could really turn things around for Skype and its plans to really build more critical strategy in the enterprise market," Riggs said. Bates understands the dynamics of the enterprise and small-business markets as well as voice, he said. Skype wants an enterprise business to help derive more revenue from its technology, something that has been a problem over the past few years, Riggs said.

Skype is unlikely to take on Cisco and other enterprise unified communications vendors head-on in the near future, instead working to better integrate its own services with existing equipment such as IP PBXes (private branch exchanges), Riggs said.

Meanwhile, Bates' move is likely to have a bigger impact on Skype than on Cisco, he said. "They do have quite a bit of qualified leadership within the company to step in and take his place," Riggs said.