August 15, 2012, 10:03 AM — The cord-cutting movement isn't limited to consumer cable and Netflix. As Voice over Internet Protocol communication matures and as high-speed Internet becomes cheap and ubiquitous, an increasing number of businesses are ditching conventional landlines and jumping to VoIP.
VoIP sounds almost magical: The hype makes it sound more flexible, more full-featured, and best of all, significantly cheaper than placing your calls through traditional telephone service providers.
But is VoIP really all it's cracked up to be? Are the potential pitfalls worth the potential monetary payoffs? I'll walk you through the basics, discuss the pros and cons, and take a look at three commercial VoIP services of varying complexity.
How Does VoIP Work?
Generally, things are pretty simple if you're looking for a hosted service. Many of the top VoIP providers handle all the heavy lifting offsite, delivering calls to your phones and software clients without much hassle, especially if you use phones that are plug-and-play certified for the service in question. The majority require no additional on-site hardware aside from those phones; at most, you might need to find a space for a small box of hardware somewhere on-site.
In contrast, maintaining a self-hosted, on-site VoIP system requires a bit more work. You need an IP-based private branch exchange--a VoIP-friendly version of the PBX phone systems that many offices use--to route your calls to the appropriate phones on your network, as well as a device called a PSTN gateway. The PSTN gateway sits between the IP-PBX software and the analog signals of the public switched telephone network, converting calls to and from digital signals as necessary.
No matter which option you choose, typically you can handle the basic settings for your phone lines or extensions over the phone, while tweaking more advanced options requires diving into your provider's online account interface.
What Do You Need to Implement VoIP?
Depending on the size of your company and the infrastructure you already have in place, jumping on the VoIP bandwagon could cost your company next to nothing, or it could entail significant up-front costs.