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Selkowitz Technology | Seattle’s small business network and telecom consultant

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VoIP is the big buzz in the telecom business, but is it really right for your small business telecom needs?

What is VoIP?
VoIP or internet telephony refers to using the network/internet for phone communications instead of traditional phone lines, T1 trunks, etc. VoIP generally manifests itself three different ways:

1) VoIP phone lines - this replaces the analog phone lines from your local carrier - you still plug into the same jack but the call is sent across the internet. Costs vary but they often have unlimited long distance packages which make them very attractive.

2) VoIP between devices - VoIP doesn’t have to go out across the internet but instead can stay within your business network. A common example is you can have a phone system which connects to traditional telecommunications service but uses VoIP across your LAN to each desk phone. VoIP here lends greater flexibility and less wiring hassle.

3) Hosted VoIP phone systems - instead of buying an “expensive” phone system, you pay for it as a monthly service. The appeal is they seem easy to setup and maintain, often include unlimited long distance, they have impressive feature sets, and no big up front equipment cost.

Should you VoIP?
There’s no one answer for all businesses, however there’s a few simple ways to know. We believe it all comes down to cost - what really will cost less over the years to come. For example buying an advanced phone system might cost $6000 up front and $250/mo for phone and internet service, while you might pay $750/mo for a hosted VoIP system with a T1. Its not hard to see that while no one likes to spend thousands up front, in a couple years buying the equipment really costs less.

On the flip side is long distance use - VoIP often offers unlimited long distance but at a cost per extension while traditional phone service you buy plans or pay per minute. This takes a bit of math - take the VoIP monthly cost and subtract the traditional phone/internet monthly cost, multiply this by 36 (for a 3 year cost comparison) and subtract the cost of the phone system for example in the example above this is (750-250)*36-6000 = $12000. In other terms over three years the traditional system costs $12000 less - not including long distance. $12,000 is $333 per month, so if your long distance bill is more than $333 VoIP could be worthwhile.

The Technical Side
While one of the appeals of VoIP is the simplicity of setup, on the flip side there is a huge complexity to ensuring call quality is good. Remember VoIP uses the same network/internet as your computers, VPN, servers, etc - all these devices have to complete for their share of the internet access. Without sufficient internet performance and network equipment people’s phone calls will get jittery when too many people are accessing the internet! Even with all that its not uncommon for VoIP calls to sound hollow or have an echo - the more lines the worse it gets.

Hybrids
One thing to keep in mind is you don’t have to pick just VoIP or traditional phones - there are some hybrid phone systems which can do both. The reality is VoIP lines really are only advantageous for long distance calling, there is no advantage for inbound or local calls. By using traditional phone lines for inbound and local calls and having a phone system like the Talkswitch which automatically routes long distance over VoIP you can get the best of both worlds!

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