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The globe acting as the 'O' on the word VoIP

What is VoIP in the business world?

The acronym VoIP is used frequently when referencing business communications, but what does “VoIP” mean and what roles does it play? VoIP, or voice over internet protocol, is a means of transmitting voice communications from one point to another that differs from traditional analog or digital telephony protocols.

Modern VoIP communications exists at different levels. When a business is using an on-premise telephone system with IP phones, the telephone sets are talking to the telephone system using VoIP within the office. But this does not necessarily mean that the VoIP transmission extends further, since if traditional “Bell”-type lines are being used, the VoIP call will be converted to analog for the ride outside of the office onto the public network. However, if IP or SIP lines are being used to connect the telephone system to the public network, then VoIP is in fact the method transmitting the call right through the network. Conversely, IP lines may be used in conjunction with a telephone system that has analog or digital telephones connected to it, so in this example the VoIP portion is only from the telephone system outwards. The way that IP or SIP lines carry the call to and from the telephone system is via an internet connection as opposed to dedicated telephone wiring.

With a hosted, cloud-based telephony system (which is in a remote datacenter), all communications between the telephone set on the desk and the telephone system are handled using VoIP.

Another important element has to do with the cost of using VoIP for telephone communications. In the consumer market, VoIP often means free calling (like Skype) but in the business world, VoIP is not free; if it is, the call quality will remind you of that fact every time you pick up the phone! VoIP solutions, and specifically IP lines, offer interesting features such as retaining phone numbers when moving outside of a rate center (whereas the old way meant changing your number or buying remote phone numbers to provide a local presence in remote markets), as well as lower cost or even free long distance calls and the ability to quickly and easily augment or reduce capacity. The service is not free and in some cases may even cost more than traditional services.

Like most business issues, cost is to be considered along with productivity, flexibility and customer service: all these elements must be reflected upon when making a decision.

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