What is VoIP?
Our industry is one of the worst for jargon and business speak. We love an acronym too.
As a result our customers out there in the real world often are aware of a term or product but can be a bit hazy on what it actually is, and what it might mean for their business. Most people have an appreciation for example of what a PBX is or perhaps what an ISDN line is but might struggle to describe them in any detail.
A good example of one of the newer and less familiar terms is Voice over Internet Protocol, or for short, VoIP.
Most people in business are aware of the term and might have some idea of what it is, but probably not enough of an idea to know if it’s absolutely right for their business.
Now, from a telecoms professionals point of view that’s not entirely a bad thing because of course we want you to talk to us before making an investment.
But as ‘what is VoIP’ is one of the more common questions we get asked, I thought I would try to provide a guide to what VoIP is, and why it might benefit your business.
In short, VoIP is a new (although actually not that new anymore) technology that is fast replacing what went before it because it’s better. Better as in cheaper to buy and operate and more flexible, offering new services too.
Customers are replacing legacy ISDN and analogue telephone lines with VoIP deployments to carry their telephone calls instead.
Lets break it down into the technology and the business benefit it delivers.
When I started in this business many years ago in our office we had two networks, one for telephones and one for our computers.
The networks were quite separate from one another. You could not use the data network to carry phone calls and vice versa.
The telephone network connected to a telephone system or PBX in the basement. That in turn connected to telephone lines, originally analogue, and then later on ISDN lines that in turn connected to the service providers exchange. Back then it was either BT or Mercury!
The data network connected the computers around the building to a mainframe in the basement, and maybe on in turn to a private data circuit connected in turn to the service provider’s exchange.
The point is the two networks were different and distinct, each using different protocols, signalling etc.
They were also engineered to do different things. A telephone network has to deliver telephone calls that are intelligible to us, so that means you need a good quality connection with no noise or interference on the line.
A data network is different. As long as the data gets there then it doesn’t matter too much if it’s a bit jumbled on arrival, you can even lose a few bits along the way. This is because computers can reassemble jumbled data and even work out what the missing bits should have been.
You end up with a perfectly serviceable email, or file transfer etc.
So fundamentally, two different networks using different protocols means lots of duplication and inefficiency as a result.
The solution is obvious, lets bring telephone calls or ‘voice’ and data together on the same network and remove the need for all the duplication.
But to do that you need a common protocol or language that the networks can use to carry voice and data. That language is Internet Protocol, or IP.
So all that VoIP does is allow us to carry voice over IP networks. It converts speech into IP ‘packets’ that look and behave like data packets on an IP network.
Now all traffic can be carried around the office on the same cabling scheme, and all traffic can be send to the service provide across the same IP network connection or bearer.
In simple terms all that VoIP does is allow you to treat a telephone call as if it were just another bit of data passing across your network.
In reality, its not quite that simple because the need for a ‘quality of service’ on the network becomes much more important when you start to send voice over it.
The requirement for good quality connections, with minimal delay or packet loss is greater for voice than data because whilst the networks get better every year, our ability to understand what is being said if the connection is very poor does not.
So today if you are opening a new office you will probably be advised to install a converged network (for voice, data and video) with quality of service (to ensure good quality voice and video calls) and install an IP phone system (so you can use VoIP).
Increasingly in fact you may not install a system of your own at all but instead subscribe to a ‘hosted’ system in the cloud. In simple terms that means you rent space on a mega IP PBX somewhere in the world and get to use it by connecting to it over the internet. You don’t then need a IP PBX of your own, you just pay monthly to use a service providers offering instead.
It sounds like a new idea but that is how your mobile phone contract works, you pay an amount per user, per month and get the use of the service providers network and some calls and data in return. You don’t have a mobile network of your own at your office!
OK, so it seems like common sense to bring voice and data and increasingly video together on the same network. We all get that.
But what are the business benefits beyond the fact that there is less physical kit required in the office to carry all this traffic around.
For me, looking at this from a small businesses perspective, the big advantage of VoIP or hosted telephony is that it removes the physical association between a phone number and a location.
In simple terms you can have a phone number for life which you can take with you when you move, and you can have a phone number with a dialling code even if you have no presence in that dialling code area.
Historically if a business moved outside of it’s exchange area then you had to either start over with a new phone number, or pay for calls to be diverted from your old number to your new.
Neither of the above is good for business.
With VoIP you keep your number when you move without the need for diversions because the old physical association between a number and its local exchange no longer applies.
Equally you can have a number for an area even if you have no presence there. I have a customer in Milton Keynes who has Bedford, Hemel Hempstead, Northampton and Hitchin numbers even though he has no offices in those towns. Why? Because in his particular field people like to deal with a local firm, so he has these number to make it appear he is a bit more local than he actually is.
So if you are anticipating growth, start with a VoIP system to make it easy to move if you need to later on. If you want to attract business from neighbouring towns, VoIP can help.
As you get a bit bigger VoIP comes into its own because it is more efficient that ISDN or analogue lines.
In the past you needed enough incoming lines to cope with peak demand if you wanted to avoid giving out engaged tone. The problem there was of course you only hit peak demand occasionally, and the rest of the time you end up paying for lines that rarely get used.
VoIP means you can dynamically create additional capacity during busy periods by compressing calls more than normal (with a slight but usually almost imperceptible decrease in call quality) and so be able to handle more calls during peak periods.
In simple terms rather than one line equalling one conversation, one VoIP connection can mean as many calls as required until the compression becomes too great and we sound like a Dalek!
Multiply this efficiency across a network of offices and you start to see significant savings from retiring excess capacity from your legacy ISDN estate.
VoIP also means you can be on the network from anywhere you can get a data connection. I have worked from home for years, connecting to the office over broadband and using the office IP PBX as if I was there in person.
It works for me because I commute less than I did 20 years ago, and it works for my employer as they don’t have to house, heat and cool me every day, or find me a parking space, or pay my fuel/train fare to come in to the office.
Finally hosted means new services can be accessed for a fraction of what they used to cost, particularly using hosted platforms. Need to add call recording? No problem, it’s a few pounds per user, per month. Need to add a new office? Just install a decent broadband service and you can move users in the same day and connect to a cloud based PBX in moments. Want to work from home? No problem, just use a soft client on your laptop to connect to the cloud based PBX using VoIP, you don’t even need a physical phone if you don’t want one.
In my experience moving away from a legacy PBX with traditional ISDN lines to an IP PBX or hosted telephony system delivers significant saving, anything between 25% and 50% depending on the nature of your business and how old your current equipment is.
Telephone intensive businesses with branch networks will save most of all. Estate agents, hauliers, solicitors, insurance brokers, doctors surgeries, hotels. In short anyone where the telephone is an essential business tool.
At Mann Telecom we offer IP PBX’s from the leading vendors in our market, Panasonic and Mitel as well as hosted systems from Daisy Telecom, 8×8, Ring Central and Voiceflex.
If it’s been a while since you last reviewed your arrangements, why not give me a call and arrange for a free and no obligation review of your set up. We can soon see if VoIP is going to help you save money and be more efficient now and in the future.
Finally bear in mind that BT switch off all analogue and ISDN lines in 2025, so if you are still on ISDN today you will have to do something about it in the next few years. Why not beat the rush!
(Photograph by Quinn Dombrowski under CC BY-SA 2.0 license)