Is VoIP the most important collaborative technology of the last 20 years?
It’s definitely in the discussion.
No list of technologies that make the world more connected can be complete without VoIP (Voice Over Internet Protocol). In 2016, Americans used more VoIP data each month than it takes to store every photo ever uploaded to Facebook. Let that sink in for a second.
Now, consider this; 31% of companies already use VoIP to boost productivity and save costs.
Whatever your industry sector or specialism, adopting VoIP can lead to exciting results for your business. Interested in learning more? This guide is for you.
- What VoIP technology is, and how it differs from a standard phone service
- How VoIP technology works
- Get the equipment and services you need to get started
- How the best business VoIP suppliers compare with one another
What's on This Page?
What is VoIP?
We know how tough it can be to research a topic as technical as VoIP. Unless picking through pages of jargon is your idea of fun bedtime reading, you’d rather get straight to the point.
Fear not! Here are the bare bones of what you need to know. Trust us; you’ll be saving money soon on your next VoIP subscription if you know a little bit about the tech and how it works.
At its core, VoIP is technology that turns analog audio signals into digital ones and sends them over the Internet. While normal phone calls use the Public Switched Telephone Network (PSTN), VoIP calls travel over IP networks. The largest and best-known IP network is the one you’re using right now – the Internet!
In short, VoIP lets you make long or short-distance voice calls via the Internet, bypassing the phone network entirely.
So what? Well, for Internet and fixed-line phone access, you’d normally need to pay for two monthly subscriptions. Most Internet Service Providers (ISPs) are phone companies too, which means they’re interested in selling you broadband and a phone bundled together.
But switching to VoIP can slash your phone bill by as much as 75 percent per month. For example, by using your existing Internet connection to place long distance phone calls, you avoid the sting of expensive service charges from your phone company. And, if you substitute PSTN calls for VoIP completely, you may find that you don’t need a fixed phone line at all.
In fact, more and more American businesses are choosing to phase out fixed-line rental by switching to VoIP.
How Popular Are VoIP Phones in 2020?
It’s incredible to think that free international phone calls were a pipedream just 30 years ago.
After the dot-com bubble burst, web data prices fell, and data-intensive web services like video and VoIP began to emerge. However, early issues with call quality and stability prevented VoIP from being taken seriously as a business solution.
Cut to 2020, and many of VoIP’s early issues are a distant memory. VoIP is gaining popularity for business, and landline phone companies are losing market share to mobile and VoIP competitors:
But, while VoIP is very much in vogue, you shouldn’t throw out your old business phone handsets. The best business VoIP phone systems can integrate their services with older handsets. Their ‘softphone’ solutions also turn laptops, tablets and mobiles into VoIP-enabled powerhouses. The best solution for your business may be one that uses hardware you already have.
How Do VoIP Phones Work?
VoIP phone systems rely on a process known as packet switching to make and receive calls. With packet switching, fragments of speech are sent back and forth between speakers in small data “packets” during the call. VoIP gateways are then used to compress the data at the one end and reassemble that same data at the other end so that the conversation remains unbroken.
Step 1: Your voice is converted into digital form
When you speak into a VoIP phone handset, your voice enters the receiver as an analog signal. Your VoIP software converts this analog signal into digital chunks (‘packets’) of information using a ‘codec’ – a computer program that converts audio from one form to another.
Step 2: Digital information packets sent across network
The digital information gets sent to a destination device, across a network. If your VoIP system is local use only (for example, employees communicating within a single office building), it uses a Local Area Network (LAN). If you are communicating more widely, the system will route the data across the Internet.
Step 3: Digital information turns back to audio
The recipient’s VoIP software uses another codec to turn the digital information back into an audio signal. Some information packets may reach the recipient in the wrong order, or not at all.
And that’s the magic of VoIP software! It reassembles all of this information to reproduce the sweet sound of your voice for the people you’re talking to.
Five Advantages of Switching to VoIP
✔ Low Cost
Larger companies’ old phone systems require separate PBX tie lines. These require more maintenance and manpower. By contrast, you can integrate VoIP phone systems with your company’s existing digital network.
As VoIP technology develops, options and price plans change. It’s wise to shop around for the best deal to suit your business needs.
For example, a few years back Vonage seemed like a reasonable alternative to AT&T at around $30 a month. Today, other, cheaper business VoIP solutions are available. You can find service plans starting from as low as $19 a month. This means that VoIP phone systems are far and away the cheapest option for small and medium-sized businesses.
✔ Easy Cross-platform Integration
You can integrate VoIP services easily with other digital services like CRM software that your office uses. For example, VoIP voicemail transcription delivers important messages to your email inbox, letting you read them on the move.
✔ Full HD Conference Calls
Because VoIP systems are digital, they offer features that you simply can’t find on standard phone systems. Many support live video conferencing – an invaluable feature for team members working remotely or across time zones.
It’s also much easier to add new features to your VoIP solution than it is with a regular phone system.
✔ Increased Portability
VoIP systems don’t depend on a specific line to manage call traffic. As a result, your employees’ extensions aren’t tied to their desks but to their phones, so they can make and receive calls on the go.
✔ Deep Data Analytics
VoIP makes it easier than ever to track valuable information. Calls can be logged, wait times tracked, and you can even record specific calls on the fly.
By giving you greater access to data, VoIP makes it easy for you to learn where your call staff are going right and wrong.
What Equipment Do I Need for VoIP?
To recap, a VoIP phone is best understood as Software as a Service (SaaS). The innovation of VoIP technology is the method of coding, decoding and transmitting voice data across IP networks.
That being said, no software is complete without a physical interface and hardware on which to run. The same is true of VoIP phone systems.
There are three types of VoIP hardware configurations. Choosing the right one is essential for getting the most out of your system.
1. Analog Telephone Adapter (ATA)
An analog telephone adapter (ATA) is a device that connects a standard desktop phone to your computer. An ATA lets you make VoIP calls over the Internet even if you don’t have a desktop IP phone.
ATAs are an inexpensive way of adding VoIP capability to legacy PBX phone systems.
Best Overall ATA
With the Cisco SPA112, you get all the typical features that come with a VoIP phone system including; Caller ID, call waiting, voicemail, and more. The Cisco SPA11 system is one of the best on the market for voice quality, making it a great choice for teams who demand crystal-clear sound during conference calls.
- Quick setup
- Can use existing desktop phone
- You must use your desktop phone to make and receive calls
2. VoIP Running Between Two Computers
Computer-to-computer VoIP software, also called a ‘softphone’, lets almost any device get VoIP functionality. Installation is simple and quick, and mobile softphones are a versatile VoIP solution.
3. VoIP Across IP Phones
IP phones are specifically designed for VoIP services. They come with onboard VoIP software and a cable that plugs directly into your network router. IP phones also include modern interfaces that grant quick access to a host of handy features, like voice-to-email messaging and call forwarding.
IP phones offer a far greater range of VoIP functions than ATA-equipped analog phones. Naturally, these features come at a higher cost than ATAs.
If you’re buying your first VoIP phone system, native IP phones would be a sensible hardware choice. If you are upgrading an existing phone system, you may be able to achieve VoIP functionality without replacing all of your old handsets.
Best Overall IP Phone
Polycom VX 600
The Polycom VX600 boasts a number of impressive features, making its $195 price tag a worthwhile investment. The Polycom VX 600 comes with a 4.3” gesture-controlled touch screen interface, full HD audio and even lets you manage your Microsoft Exchange calendar on the fly. Read full Polycom review.
- Affordable calls
- Impressive host of features
- High setup cost
- Can slow down speed of other computers on network
We’ll explore some of the drawbacks of different VoIP options shortly, but it’s worth noting that these hardware configurations suit different businesses to different degrees.
▶ Read more: Best Office Phone Systems 2019 Roundup
VoIP Hosting Options
Just like the hardware discussed above, VoIP relies on IP network infrastructure to handle users’ data transmissions. For example, all VoIP phones route their subscribers’ call data through private data centers.
So, before you start looking at specific VoIP features, you need to decide how you will ‘host’ the IP network.
You have three options:
1. On-Premise VoIP (On-Site VoIP)
On-premise solutions are VoIP systems that are custom built for large organizations. Instead of subscribing to hosted VoIP services, some companies prefer to acquire their own in-house VoIP infrastructure. This approach involves working with a VoIP provider to build a secure IP network and integrate it with your existing communications systems.
On-premise systems provide better security, which is why they’re often used in government departments. There are also potential cost savings to be gained over time from avoiding recurring costs of a hosted VoIP subscription.
A serious downside of hosting on-site is that it costs a lot upfront. The types of servers that VoIP networks use are expensive to buy and set-up. This makes on-premise VoIP hosting uneconomical for most businesses. If you have fewer than 500 employees, it’s unlikely you’ll see much ROI from hosted VoIP.
2. Hosted VoIP (Cloud VoIP)
With a hosted solution, your VoIP provider hosts all essential network infrastructure at their global data centers. You pay a recurring subscription for:
- Access to their managed VoIP service(s)
- Enough bandwidth to meet your company’s needs
- An agreed (but scalable) number of phone lines/users
Tiered pricing for small, medium and large businesses makes hosted VoIP hard to beat in terms of value for money. The subscription model removes the need for a large upfront investment, although fees do increase with the size of your company.
Hosted VoIP is also remote worker-friendly. Major VoIP providers offer software that employees can install on mobile devices. Because the service runs on third party servers, you can make and receive calls wherever you are in the world.
The scalability of hosted VoIP is its biggest draw, letting you change your subscription type to match your day-to-day business priorities. Think about the possibilities for a second:
Phoning up hot prospects from your mailing list to tell them about next week’s Black Friday sale? You can add Salesforce integration to your subscription and send them online discount codes mid-call to sweeten the deal.
Expecting a surge in ticket refund requests the morning after your client’s headline act drops out of their festival lineup? Ask your supplier to turn on multi-line call features to help your agents handle the surge in demand.
More often than not, this kind of flexibility will suit you more than being saddled with hardware that will only depreciate over time.
However, the flex you gain with a hosted VoiP subscription is offset by the control you lose over the service itself. Your supplier decides which features to include in each subscription tier, which also leaves system improvements to be made at their discretion. Thankfully, the best business VoIP companies go the extra mile to ensure a great experience for their customers.
▶ Read more: Top 4 VoIP Providers in Canada
3. Hybrid VoIP
Hybrid VoIP combines many of the ‘pros’ of on-site and hosted VoIP. A typical example of a hybrid solution would be connecting a non-VoIP-enabled PBX phone system to a VoIP provider’s network via gateway servers.
One of the biggest advantages of using a hybrid PBX is that if you suffer a VoIP service outage, you can still make calls using the standard PSTN.
How Much Does VoIP Cost?
World-beating VoIP doesn’t have to cost an eye-watering amount. You just have to know where to shop.
We looked already at how things like the number of phone lines, bandwidth allocation and features can factor into VoIP costs. In fact, the cost of VoIP depends on more than just these factors. The location of your business, for example, determines your Internet service coverage, which may affect the VoIP hosting options and features available to you.
Most business VoIP companies pitch their services on a quote-by-quote basis, so the only way to find out how much your VoIP upgrade will cost is to speak to them.
You can fill out our price comparison webform in 30 seconds to receive quick quotes from top suppliers.
At this point, the old phone network is like a giant comfort blanket. No matter how long you’ve used it for, the truth is that you probably outgrew it years ago. Every business deserves better. However, if you’re still a little unsure on whether VoIP is right for you, have a read of our Best Cordless Office Phones article and compare the offerings.
We’re confident in declaring VoIP the clear winner in the battle for your talk time. Hosted VoIP has better call quality than ever, and the potential cost savings of switching are huge (Dell saved $39.5 million in two years by using VoIP for telecommuting). And, for today’s deskless worker, the mobility that VoIP offers is no longer a luxury; it’s a necessity.
VoIP Jargon Decoded
Local Area Network (LAN)
A LAN is a network of computers that’s limited to a particular area, like an office building or a group of buildings.
Unified communications (UC)
Unified communications just means the different ways- email, IM, phone calls, video conferencing, fax, SMS, etc. – that businesses communicate. UC solutions and systems bring these services together in one place for ease of use.
Bandwidth is the measurement of information that a network can handle at one time. It is representated in ‘bits per second’. VoIP services typically require a bandwidth of 10Kbps in each direction, while PSTN services require 64Kbps.
Also called ‘lag’, latency is the time it takes for a packet of data to get from one network connection to another. High latency signifies slow network connection speeds, while low latency means fast connection speeds.
Jitter refers to the inconsistent transmission of voice data, resulting in a jittery audio distortion. It can be caused by high latency on a network.
Packet loss refers to when information traveling across a network gets lost before it reaches its destination. This may happen if network latency is too high, or if the network is congested with traffic.
Session Initiation Protocol (SIP)
SIP is the name of the main protocol that enables VoIP services to work. Using a connection method called ‘trunking’, it allows VoIP services to connect via the public phone service network.