What is VoIP?

VoIP (Voice over IP) or internet telephony is simply a technique for making telephone calls over a data network such as a local area network (LAN) or the largest network of them all, the Internet. The reason this technique is popular, is it enables you to make calls, both local and International, free or at very little cost. This is possible because you are placing the telephone call, in the case of a local area or International call over the public Internet, or in the case of an internal call over your own private LAN, either way you are not traversing the Telco’s network and therefore avoiding their charges.

So is VoIP About Avoiding Telco Charges? Is that Its Benefit?

It may well be. However, in its most common or at least most popular form, VoIP is usually visualized as being, a ‘computer 2 computer’ interaction. Simply put, two people with microphones and speakers attached to their PC’s (Laptops, Mobiles or Tablets) and of course, an Internet connection. They can then hold a conversation regardless of Telco charges or the geographical location. What is more they can hold this conversation for as long as they wish, and at any time of day, and what is more they hold this communication free of any charge.

This is a wonderful solution for the personal home user, wishing friendly chatter or gossip, however, businesses require much more functionality than that simple scenario. SMB’s (Small Medium Business) cannot communicate with customers in such a manner. They require all the functionality be built into their existing PBX (Private Branch Exchange).  At the very least, they require a system that provides:

• dial tone
• call transfer and call hold
• automatic call answering and response
• The ability to support multiple internal extensions
• Handle call queuing, as well as call management and call termination.

Of course, none of the above features is available on the basic VoIP model we discussed. Fortunately, for the SMBs’ professional use, an IP-PBX can supply all the functionality that is supplied by the traditional PSTN PBX, and a lot more, and at a far more affordable price.

So What is an IP-PBX?

An IP-PBX is an IP (Internet Protocol) based phone system that consists of one or more IP phones, connected to an IP-PBX server and if required a VoIP gateway to connect to the existing PSTN Telco lines – after all you still need to receive and send calls from non-VoIP customers.

Where the PBX and the IP-PBX differ, however, is in how they handle specific traffic and protocols. The IP-PBX server handles the IP call switching and routing between internal and external calls, by maintaining a registry of all authorized phones whether they be soft-phones – applications loaded on a PC, laptop or tablet – or real physical phones that exist on the network. It does this by registering every phone against an IP address in a database. When a user initiates a call from an internal phone, the IP-PBX, initially authenticates and authorizes the phone, to ensure the phone is registered and therefore permitted on the network. Where it differs from a traditional fixed line PBX, is that it then routes the call, not to the phone number entered but to the destination IP address. The IP Address corresponds to the destinations registered phone number stored in the registration database. The IP-PBX does this by matching the destination phone number to its destination IP address against a database record, and then consults a route plan to determine the best path to the destination. Once the best path has been determined it then routes the call via either the local LAN, the PSTN (via the VoIP gateway), or out to the Internet, possibly through an IP Telephony Service Provider (ITSP).

The change in technology is that the IP-PBX, actually replaces the traditional PBX in the network, and more importantly,  it combines both the data (IP) and voice (PSTN) services into one unified network making management, maintenance and support more efficient and less expensive. However, the IP-PBX can do an awful lot more for the SMB than simply replace the traditional PBX’s functionality.

Traditional PSTN PBX Vs IP-PBX

• ROI, (Return on Investment) an IP-PBX will more than match a traditional PBX with regards performance, reliability and functionality, it will not only win with available functionality but will be future proof. Its lower initial cost, both to buy and maintain, as well as its minimal operating costs will realize a quicker return on investment.
• Mobility; possibly one of the most visible and useful differences is that with an IP-PBX the phone is not fixed to one extension line. It can move about the office at will, or if it is a soft phone on a laptop, or mobile, roam to other offices or even to the home, the IP-PBX will seamlessly keep track of its new location. This means an end to tedious and expensive patching and relocating phone extensions to a desk every time there is an office move or reorganization, the IP-PBX handles these phone relocations transparently.
• Cost savings on call routing. The IP-PBX can intelligently route calls via cheaper service plans and providers. It does this by comparing the destination number to a configurable preferred route plan. If three routes are configured, it will try the most preferable one first, (typically configured by cost or reliability). When working in hybrid mode the IP-PBX can route a call via the Internet or the PSTN depending on the circumstances – for example; if the destination is temporarily unreachable by Internet, then fall back to use the PSTN.
• Application integration; the IP-PBX is a standard server, running a typical operating system, such as a flavor of Linux. This means that integration with other servers and their applications is more readily accomplished. The traditional PBX runs on closely guarded proprietary software and requires development of specific and expensive API’s (Application Programming Interface) in order for the PBX to integrate with third party software. However, with the IP-PBX, integration with applications such as Outlook, because they all speak the same language, allows for automatic caller recognition, which will recognize a caller’s ID and then automatically open up on the screen a CRM record with the caller’s details, and call history. The integration of such applications, as they share the same protocols is readily achievable.
• Call Center functionality; with the traditional PBX, Call Centre functions were restricted by license, and typically to fixed line extensions. A physical Call Centre was out with the budget of the SMB, due to telephony as well as real estate costs. However, with IP-PBX systems’ that is no longer the case and full Call Centre features are available for a fraction of the costs and are easily configured. When used in tandem with the call mobility feature, and application integration, whereby anyone can work from any location, for example, an agent can work at home, part time, and have secure access to CRM and FAQ databases, then setting up a virtual Call Centre is no longer something out with the budget of an SMB.
• Flexibility; the IP-PBX is easier to manage, it is under your control so it is so much easier to administer, for example to change or edit an extension number, or configure a dial plan or route map, is within your own control, it does not require the visit of a technician as is the case with a traditional PBX.
• Freedom; VoIP allows you to avoid local Telecom lock in, and their fixed line, local, national and International tariffs. It is possible to ask your ITSP to provide a local telephone number for a city anywhere in the world. For example; London, New York or Singapore, which would allow your customers to communicate on a local charge basis – this is very convenient for customers – of course the calls are answered in, for example, Canada. Of course this also gives the perception that the company has a national or global presence.
• Scalability; it is easy to add new software functionality as most VoIP and IP-PBX’s have regular updates through community collaboration. The fact that the hardware is a standard PC makes upgrades cheap and simple.
• Voicemail; it can be diverted to email, again this permits mobility, a missed call can be forwarded to email.
• Messaging; e-mail, voicemail, messages and chat can be read aloud. For those visually impaired they can hear rather than read messages. It also aides mobility whereby an email is diverted to a voice channel
• Administration & Management –  You are in control, if you wish to administer a SMB network, a call centre, or a help line, it can be done remotely and cost effectively
•  IP-PBX facilitates communication in so many ways, for example; basic voice, text, audio files, video, white board collaboration and presence\video conferencing, this integration of communications is just not possible with a traditional PBX
• To be fair, PSTN has some advantages, mainly, quality of experience. However, that was because people perhaps a decade ago, were used to their fixed land line telephones working on the PSTN, and as such were used to high quality audio. This of course was purely subjective. When you compare VoIP’s quality to PSTN, of course VoIP is found wanting. This however is because people were used to the quality of the PSTN fixed line network. This resulted in VoIP getting a bad press, with regards quality and reliability. However, the sudden rise in popularity of VoIP, and mobile telephony, over the last decade, has caused the PSTN Telco fixed lines to fall out of favor. This shift in technology has made people re-assess their perception of QoE (quality of experience) when making a telephone call. No longer do they compare the competition against the quality of the land line, but against the more ubiquitous mobile (cell) phone. As a result, the public no longer perceive the quality of VoIP calls to be inferior; indeed many consider VoIP superior to many mobile networks.
• Security; The PSTN PBX comes out top here, as it operates on a private line which is inherently secure. The VoIP IP-PBX though operates over the public network so requires additional steps to ensure confidentiality and privacy. There are many techniques that can be applied by the SMB in co-operation with the ITSP to secure transmission, but it is usually at an extra cost.
• Usability – modern mobile (Cell) phones can be loaded with VoIP applications that allow free call communication that bypasses the Operators tariffs, such as Skype, Line, etc, this is due to VoIP technology, which facilitates free of charge communication on WiFi, or LAN networks, this utility is not possible with a PSTN PBX. However, with VoIP this technology can be integrated to offer additional touch points, VoIP is therefore available on not just computers, mobiles but on any device with speakers, microphone and a broadband connection.
• Collaboration and integration; Voice and data were once considered separate and diverse networks, VoIP has allowed convergence and the ability to merge these seemingly diverse networks. The result; we can send video, music, photographs, and chat in real time. An IP-PBX can therefore handle and send all sorts of multi-media, not simply voice packets over a communication channel.
• Control of your own technology – no vendor-restricted code, or guarantee restrictions. VoIP instead encourages integration and development.
• Finally, VoIP, saves SMBs’ money, allows them to meet their targets, their budgets, and encourages innovation!

How VoIP Works

How VoIP works is a mystery to most business people, but if you can take the time to try to understand how it works, you will see a world of possibilities.

The basics

VoIP takes voice signals, from a microphone, which is analogue, sine waves, and converts them into digital by passing them through an analogue to digital convertor; the output is a stream of ones and zeros. In their digital format, they are sent over the internet just like any other data. At the other end, they go through a Digital to Analogue convertor to transform them back to the original voice sine wave signal that we can hear.

The VoIP technology was initially a computer – computer technique, best suited for person – person communications, if the recipients IP address was known, a VoIP session could be established. However, business soon realized the potential and VoIP service providers began offering global directory services (Skype etc). By utilizing a VoIP service provider there was the possibility to contact and communicate to others outside the users known peer group, also to communicate to not just computers but to mobiles and landlines – albeit at an additional cost.

Why VoIP for the Business

Implementing VoIP enables a small to medium business to combine all its communication channels and facilities; voice, video and data into one cost effective, manageable and efficient solution that enables the business to operate and utilise those facilities to their maximum potential. The unification of diverse communication channels is advantageous to the business because it combines both the voice and data networks, which makes maintenance and support more efficient and cost effective, whilst maximizing profits, lowering operational overheads and reducing major fixed line, national and international telephone costs.