VoIP Clarifications

One question on the minds of many business owners is: "Should I be using VoIP in my business?" This is a great question, and the answer is "that depends." Many people assume there are cost-savings associated with using VoIP services. This is sometimes true, but VoIP services can actually be more expensive in some business applications.

VoIP stands for Voice over Internet Protocol and the name is applied to a wide range of services that convert voice telephone calls to a stream of data which can be passed over private networks or the Internet. There are 3 main types of VoIP that could be used in a business.

Residential / Consumer Grade VoIP services. These are free or low cost services such as Skype, Vonage, or Google Voice that are typically used for their enhanced features or for saving money on long distance telephone calls. These services are especially popular for placing International calls. Skype is also gaining momentum as a video conferencing service.

These services often do save money but the quality of calls can vary tremendously since the provider has no control over the user's Internet connection. When the calls are poor quality, the user can easily place the call over a regular telephone line or even a cell phone. These services do work especially well to save money when a relative or employee is located in another country. The amount of money saved is usually significant compared to buying traditional residential telephone service. If occasional calls are poor quality, they can be placed over a land line telephone so there is limited inconvenience.

Business VoIP services such as hosted PBX. Hosted PBX services are becoming quite popular with businesses. A hosted PBX is a telephone system housed outside of the customer's office in the provider's network. The customer connects to the telephone system using an Internet connection and VoIP telephones connected to their local area network (LAN).

The advantage of Hosted PBX services can be a fixed cost per month with unlimited calls as well as using the same phone system for employees in one or more offices and sharing a common voice mail and dialing plan.

The disadvantage of these services can be service outages caused by the customer's LAN, the Internet connection, or the hosted PBX provider. It is also often difficult to diagnose the source of the service outages resulting in frustration for the customer and service provider.

The highest quality hosted PBX providers will only provide service using their own Internet service and often insist on managing the customer's LAN to ensure that service works properly. Some customers save money with hosted PBX but many do not because of the added cost of LAN upgrades. These systems need to be looked at on a case-by-case basis.

VoIP-Based Business Telephone Systems. These systems have been around for many years and users often cannot distinguish them from traditional PBXes. However, the features are very similar to a hosted PBX. With VoIP-based business telephone systems, the telephone hardware is located at the customer's office (or at their main office), and telephone service is directly connected to the phone system. There are usually options to use SIP Trunks (VoIP based phone lines) or traditional phone lines (such as PRIs and/or POTS lines). SIP stands for Session Initiation Protocol.

The initial cost of these systems is often 20 to 50% higher than a traditional telephone system but there are long-term savings on maintenance. For example, employees can simply plug their phone into any network jack in the office. There is often a requirement for upgrade or replacement of the local area network (much like with Hosted PBX) for these systems to function properly.

VoIP is growing rapidly in business telecommunications, and there is no question that this trend will continue. In spite of the popularity, many customers have experienced significant service interruptions due to poorly planned installations. Even the best installations tend to have a higher incidence of occasional unexplained technical problems. It is highly recommended that hosted PBX and other business installations be handled by a trained professional with a past record of successful installations. Be sure to do thorough reference checks on any vendors before the project is implemented; and be sure the system is fully tested under real-life conditions before the installers leave the building.

Give us a call at (805) 543-8700, or click here to schedule a free in-depth analysis of your voice or data needs. There’s no obligation, and your business will benefit from our meeting.

We utilize Blue Rooster services for RRM Design Group because they offer big-city services with small town support and are willing to go the extra mile to provide assistance.
Erik Justesen
RRM Design Group