VoIP is a major buzzword these days and for good reason. But as I speak with customers one thing I consistently find is confusion about what VoIP is and how it works. Why the confusion? Largely because VoIP is a broad term and is used to describe many different things. In this article I will try to explain what VoIP means for agencies and, most importantly, how it can save you money and increase productivity.
What is VoIP?
VoIP (Voice over IP) describes anything where voice communications (Voice) are carried over standard computer networks (IP) including the Internet. When discussing VoIP we are usually referring to one of two things:
IP Phone Systems:
In the past, phone systems were completely separate from computer networks with dedicated, proprietary PBX hardware and duplicate cabling. A PBX (Private Branch Exchange) is the “brains” of a phone system very much like a server is for a computer network.
VoIP Phone Systems eliminate the separation and redundancy between the two systems: Phones and computers share the same cabling, the PBX is software loaded on a computer, and the phones communicate with the server just like computers do. So how does this make things better?
Cost! – IP Phone Systems are much less expensive than traditional systems and usually have better features. The cost savings come from a number of areas:
Local or Hosted – Because IP Phone Systems run over computers networks, you have the option of running the Phone System locally in your own network or using hosted on the Internet.
The second part of the VoIP equation is Dial Tone. Every phone system (PBX) must have “dial tone” available for actually placing the phone calls. Although it is often “packaged” together with the phone system in vendor’s quotes, the dial tone is actually a separate piece from the phone system.
Traditional phone systems use POTS or T1 lines for dial tone. POTS (Plain Old Telephone Service) lines are traditional analog phone lines from the local phone company. T1 is a higher end digital line that can be less expensive than POTS for large numbers of lines. POTS and T1 Lines are often still a good solution but they can be very expensive. Most IP Phone Systems can use POTS or T1 for dial tone but they also add support for VoIP dial tone.
VoIP dial tone is simply phone service provided over the Internet. VoIP dial tone is provided via SIP (Session Initiation Protocol) which is a standard way for voice communications to be moved over computer networks. (SIP is also the way IP Phones communicate with IP Phone Systems).
The two big advantages of VoIP (SIP) dial tone are price and flexibility:
VoIP Phone service is not always the best choice but for many agencies VoIP dial tone combined with an IP Phone System provides a cost and feature combination that blows the doors off traditional systems.