May 01, 2012, 2:25 PM — You probably can't turn a corner in the office without hearing about Voice over IP--a popular, cheap, and effective way to provide telephony to businesses. The premise is simple: Instead of using the existing telephone lines in your building, or having new ones installed, you push all of your voice, teleconferencing, and video traffic through the Internet.
The single most expensive component of a phone bill is the minutes. But VoIP differs from regular telephone service by treating your phone conversations as data passing through your IP network. In today's world, broadband is relatively cheap and easy to get, so VoIP has considerable appeal to businesses that want to cut costs and use their existing resources more efficiently.
How VoIP Saves You Money
VoIP can reduce your business costs in several ways. First, it frees your business from ever having to to install new phone lines. VoIP services such as Vonage provide equipment that hooks directly into your existing broadband network, and those services' rates are extremely competitive with typical business phone plans. You can even arrange for the service to install the necessary hardware in your telecommuting employees' homes.
Second, VoIP can operate through an encrypted VPN connection for increased security. You can install VoIP software on mobile devices too, so that your employees are always connected and reachable from a "work" line, even when they're physically away from the office.
The usual business-phone features are available on VoIP: voicemail, caller ID, conferencing (including videoconferencing), and call forwarding--and it also supports unlimited long-distance calling, since the traffic goes out over the Internet. The phone system becomes a service that your IT department handles, which reduces costs and downtime (since you don't have to wait for a telco truck to show up if the service does happen to go down).
How VoIP Works
A VoIP service breaks each employee's voice stream into packets, compresses them, and sends them over the Internet to their destination. The VoIP service then uncompresses them, puts them back into order, and reconverts them into voice for the other party to hear. This process is completely different from establishing a persistent connection between two parties, as happens with a normal phone conversation. Since the speed of your connection affects the quality of your calls, you need to make sure that you have enough bandwidth. Fortunately, the big VoIP providers are straightforward about letting you know how much bandwidth you'll need to maximize call quality and minimize wasted time and broadband space.
What VoIP Services Offer