What Is VoIP For Business?

There’s a lot of buzz these days about the advantages of converting from traditional telephone services to VoIP. There are, indeed, major advantages for businesses to go with enterprise VoIP solutions. However, there are some pitfalls to avoid if you want to make the transition successfully. First, though, let’s take a closer look at just what VoIP is and how it differs from the phone service you have now.

One confusing aspect of VoIP is the name itself. The term VoIP is an acronym for Voice over Internet Protocol. The thing that jumps right off the page at you is the term “Internet.” It immediately conjures up visions of broadband phone solutions that piggyback on top of Cable broadband or DSL connections. That is, indeed, VOICE going OVER the INTERNET. It’s also one example of VoIP. However, it is far from the complete story.

The idea behind broadband phone is that with the right equipment you can use your broadband Internet service to connect you to a competitive phone company. The whole impetus for this is that the local telephone company, called the ILEC for Incumbent Local Exchange Carrier, pretty much owns you for local phone service. It’s easy to switch long distance providers, but much harder to change local services. Why? Because the ILEC owns the copper wires between your location, business or residential, and the switching equipment in their office. You can’t dig up the wires and move them elsewhere, so you need an alternative “phone line.” The Internet provides just such an alternative connection.

One of the major pitfalls of broadband phone is that the Internet was designed for transporting data reliably, not for transmitting voice quickly. Everything on the Internet is transported in packets. That includes data bits representing digitized phone conversations, video clips, websites, email and many other things. What they have in common is a standardized packet structure called IP or Internet Protocol.

Now, here’s where the trouble comes in. The Internet treats one packet just like the next. It doesn’t matter if they are zipping along smoothly or all clogged up. The system is set up to get each packet from Point A to Point B sooner or later. Having data correct is much more important than having it as soon as possible. If a packet gets lost or corrupted, another protocol called TCP or Transmission Control Protocol sees that the packet never arrived at its destination and retransmits it. As a user, this is all invisible. All you know is that your email or web page displayed correctly.

Voice differs from data in that it is a real time protocol. A voice packet that shows up late is of no use because the conversation has already moved on. VoIP is set up to discard missing or out of sequence packets. A few here and there won’t make a difference, but a lot of missing packets will punch holes in the conversation and make it hard to understand.

Video is equally sensitive or even more so. The way video stays intact is to have the packets go to a staging area before they are displayed on the screen. This area is the buffer. Buffering collects packets however they come in and then feeds them out smoothly to create a continuous picture stream. Buffering also works for audio and is used for Internet radio stations extensively. That way any congestion on the net won’t cause the audio to drop out.

Buffering could be used for VoIP, but not very much or it will create havoc. The tradeoff is that phone conversations are two-way. The buffer will cause a big delay from the time you start talking until the other person hears it. Buffering and other delays show up as something called latency which turns two way conversations into more like walkie talkie conversations. Only one person can talk at a time and you have to wait before taking your turn.

What’s better? Bypass the Internet and use a private line connection called a SIP Trunk. SIP is the switching and signaling protocol for VoIP telephony. The SIP Trunk is carefully engineered to give voice packets priority over data packets and to have enough bandwidth to avoid congestion that causes latency and jitter.

SIP Trunks connect your company to your business VoIP service provider. The provider takes care of all outside lines to the public phone system. You can connect the PBX phone system you have now using a SIP Trunk or use an IP PBX that uses IP telephones rather than standard analog phones. Even more interesting is hosted VoIP, which eliminates the in-house PBX system completely. The service provider gives you both lower rates to use the public telephone system and takes care of switching both inside and outside calls.

As you can see, there are various flavors of VoIP phone service available today. You want to be careful to pick a solution that not only saves you money but has the features and voice quality you need to conduct business effectively. Enterprise VoIP providers have solutions for all size businesses at attractive prices. Compare features and costs now to discover what’s available for your particular locations.

Where Hosted PBX Solutions Save

Business telephone systems range from the very simple with a few phones and a few lines to complex private branch exchanges that support multiple sites. The new approach is a hosted PBX that makes things simple again. But do hosted PBX solutions really save anything and can they maintain voice quality?

With the simplest arrangement of a single landline phone connected to the local phone company, there really isn’t much to manage. You pay so much per month for “dial tone” that makes your phone work and gives you typically unlimited local calling. You have the option to switch to a different provider for long distance service or use a dial-around service for international calling. These are options to save you on the per minute calling rates.

The basic analog or POTS (Plain Old Telephone Service) phone service seems simple because all the complexity is at the other end of the wire. What you don’t see or have to deal with is the intricacies of connecting your line to any of billions worldwide or to even more billions of wireless callers. If you have, say, 3 business locations with 1 phone each, they talk to each other by dialing up the desired location just like any other phone number.

Businesses found out just how complex the PSTN (Public Switched Telephone Network) was when they got big enough to have lots of desk phones and a dozen or more outside lines. What many companies did was to buy their own telephone switching system called a PBX (Private Branch Exchange.) The advantage of having your own PBX system is that calls within the company stay on your own wiring and you don’t have to pay the telephone company to connect them. That includes more complex PBX arrangements with digital tie lines that connect multiple locations in a private network. Once again, the motivation is to keep as many calls as possible off the public network to avoid “toll” charges.

Many companies have rued the day the got into the telephone business. PBX systems are expensive to buy and need constant updates as employees move within the company. There is also maintenance activity for both the PBX and its telephone network wiring.

Hosted PBX is a fairly new service that offers to offload the expense of in-house phone systems. It only became possible when most companies installed Local Area Networks for their computers and the price of private digital lines became affordable. The enabling technology is VoIP or Voice over Internet Protocol. In this case, Internet refers to the technology standard and not necessarily use of the public Internet.

Hosted PBX refers to using a large PBX telephone system that is located or hosted by a third-party service provider. This PBX is big enough to handle the telephone traffic of many different companies to gain an economy of scale. In a way, this is similar to going back to the days where each phone was individually connected to a local telephone company that took care of call switching.

So, where does the cost savings come from? Network consolidation is one area. Both telephones and computers run on a single converged voice and data network. There are no separate telephone wires. This network is extended to the hosted PBX provider using a private digital line called a SIP trunk. You are not tied to a particular service provider. There are many competing hosted PBX solutions and that competition is another way that cost savings can be offered.

The private SIP trunk helps to maintain high voice quality because it provides the characteristics of low latency, jitter, packet loss and congestion, along with quality of service mechanisms that keep data packets from interfering with voice packets. You can also buy Internet based hosted PBX services at lower costs, but the vagaries of the public Internet can introduce distortion and clipping in the conversations.

Do hosted PBX solutions offer a real cost savings for your company? It depends on how many seats you have, what features you want and what your existing system is costing you. If you are close to replacing an aging PBX or one that has run out of capacity, the economics highly favor hosted solutions. To decide for yourself, get competitive pricing on hosted PBX solutions for business. It may come down to whether you want to pay as you go versus investing in your own in-house phone system.