A new report has warned businesses to take security into account before deciding to allow the Skype VoIP service to run free on a company network.

Debunking the Hype About Skype, from the Burton Group, agrees that the service can cut long-distance calling charges for many businesses, but only at expense of messing with security policies.

Security issues include the difficulty of managing the application from a central point, and the fact that call encryption makes it impossible to monitor or record conversations made by users.

The report points out that the Skype application uses a closed, non-public protocol, and does not support enterprise-class authentication.

The Burton Group drawn particular attention to the regulatory issues of using Skype. This varies form jurisdiction to jurisdiction, but in the US certainly requires that callers are locatable in an emergency location - not possible with Skype or any other VoIP service - and that calls can be properly tapped to ensure confidentiality.

However, it stops short of suggesting banning Skype, admitting that it has some advantages for certain types of customer.

"If the risk is too high - ban Skype, if the reward outweighs the risk - consider Skype as part of your overall communications strategy," said Irwin Lazar of the Burton Group.

Customers like the integrated suite of IM and voice applications, for instance.

The report might claim to be "debunking" the hype over Skype's benefits though it's hard to see that there is any longer a mystery about the application's risks, which have been well debated elsewhere. A number of companies have even started selling products that set out to stop the application from running at all.

A Podcast of the report's findings is available form the Burton Group website (http://inflectionpoint.burtongroup.com).