What is VoIP & How Does VoIP work?

Voice over Internet Protocol (VoIP), is a technology that allows you to make voice calls using a broadband Internet connection instead of a regular (or analog) phone line.  Some VoIP services may only allow you to call other people using the same service, but others may allow you to call anyone who has a telephone number - including local, long distance, mobile, and international numbers.

VoIP services convert your voice into a digital signal that travels over the Internet.  If you are calling a regular phone number, the signal is converted to a regular telephone signal before it reaches the destination.  VoIP can allow you to make a call directly from a computer, a special VoIP phone, or a traditional phone connected to a special adapter.  In addition, wireless "hot spots" in locations such as airports, parks, and cafes allow you to connect to the Internet and may enable you to use VoIP service wirelessly.

Is VoIP Right for My Office?

The buzz around office VoIP phone systems has been constant enough that many businesses think about diving into one without really understanding their benefits.  Contrary to the assumption many potential buyers start with, a VoIP installation is not a guaranteed way to save money.

Additionally, features alone are not reason enough to upgrade right now.  However, there are some specific situations where VoIP can make an immediate positive impact on your business.

Multiple locations

If your company has multiple locations - branches, telecommuters, remote sales offices - that are already connected to a company Local Area Network (LAN) or Wide Area Network (WAN), you are a prime candidate for a VoIP system. You can share the full features of a VoIP system across all your locations.

Even if you have one office in Connecticut and one in California, VoIP allows calls between them via extension dialing, making it a zero cost call. For businesses with hefty monthly long distance charges due to calls between locations, that can be a very attractive reason to upgrade.

Infrastructure Savings

An office VoIP phone system can also save money as you are setting up a new office - you will not have to run separate cabling for your phone system. However, if you are setting up a new data network anyway, adding a parallel voice network at the same time is relatively cheap so the cost savings here might not be as large as you expect.

The best solution for you might be a system that uses existing phone wires within the main office and VoIP for calls between locations.  This combination works well if you have relatively new telecom equipment - many PBXs can be IP-enabled with software upgrades and minor hardware additions.  Or, if you are ready to replace an aging PBX, it may be a great time to move to IP PBX.

Sticking with traditional phones internally will save you money, as well as increasing the overall reliability of your phone system.  Vendors can also set up systems that use only traditional lines and extensions at first, but support later expansion to VoIP.
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