Are You Ready for VoIP?
By Ted Mallires
Communications & Networking
Universal Advisor, 2005 Issue No. 1

Voice over Internet Protocol (VoIP) is causing quite a stir among businesses. Although it’s been in the works for years, the technology is quickly moving from “bleeding edge” to “leading edge.” In fact, it’s estimated that 40 percent of all business phone lines (about 180 million) will be VoIP-based within five years, and our homes are soon to follow. So what is VoIP? And what does it all mean?

What Is VoIP?
Put simply, VoIP is a technology that transfers voice in a manner that allows it to run on the most widely used data format — Internet Protocol (IP). Once voice is turned into IP traffic, businesses can consider two different types of telephone service. First, voice can travel over a broadband Internet connection (e.g., cable modem or DSL), thereby allowing calls to bypass your local and long distance telephone company at potentially significant savings. Second, voice traffic can be carried within your business on your Local Area (computer) Network, thereby allowing the telephone and voice mail system to be replaced with a communications server. This can allow a business to piggy-back investment in their data electronics and cabling network as well as potentially pick up new features not readily available with previous telephone systems.

Something to keep in mind when considering VoIP: Are you looking to replace telephone service (lines, local and long distance service), or are you looking to replace the telephone system with the new style of VoIP telephone system? Both are often referred to as VoIP but are uniquely different and require different plans of action.

What Does It Mean to You?
VoIP telephone systems have moved from bleeding to leading edge; nearly all major telephone system manufacturers are focusing on developing, manufacturing, and marketing IP telephone systems. Whether a business will save money or receive operational advantages from these systems is variable and requires experienced analysis, as it’s subject to the unique factors affecting each organization. Some of the factors that can play well for IP telephone systems include:

• New building projects/“greenfield” sites allowing for a fresh start
• Organizations that have an up-to-date, robust internal data network infrastructure but older telephone or Centrex systems
• Organizations that have many branches and a need to communicate both voice and data heavily between them
• Organizations that need to support users who often work at home or on the road and have access to broadband Internet connections
• Organizations that often move staff within and between their buildings

For the most part, however, VoIP telephone service is just starting to take off and is largely still the domain of early adopters in the residential and small business market. Savings are a big draw, but call quality may be a tradeoff — it’s typically not as good as standard phone service but better than cell phone service.

The Times They Are A-Changin’
Although most businesses remain in “wait and see” mode when it comes to using VoIP for their local and long distance calls, many are actively pursuing the implementation of VoIP telephone systems. The telephone system industry has clearly moved in this direction, and the days of the conventional analog/digital telephone system are passing quickly. With careful analysis and planning, organizations can move into VoIP technology safely while positioning themselves for tangible benefits now and into the future.