Is VoIP Beneficial for Your Business?
by Jim Hanks
Not too long ago, before Ma birthed her Baby Bells and Working Assets Long Distance offered
free pints of Ben and Jerry's, the long-distance telephone market seemed impregnable.
Even today, because the majority of costs for telephone services are fixed and
considerable, all but the largest companies are excluded from the market.
As a result, long-distance carriers have been cashing in on toll charges for
decades. But once technology was invented, a relatively new entrant to the telecom
world, Voice over Internet Protocol (VoIP), has threatened to take on the telecom
As you'd expect, the battle doesn't come without controversy. On one hand,
VoIP reduces inter-office and long-distance charges dramatically by transmitting
voice calls through data lines instead of traditional networks. Since these
linesLocal Area Networks (LANs), Wide Area Networks (WANs), or simple
internet connectionsare already in place, hardware expenses aren't prohibitive.
On the other hand, VoIP's quality of service just isn't what most people want
it to be.
Is VoIP a valuable service
or just another over-hyped technology?
How VoIP works
Traditional phone services transmit analog signals over closed circuits. Once
digital technology was invented, this process was quickly deemed inefficient.
By converting analog signals to digital packets and compressing them (using
a codec), transmissions can be sent quicker using less bandwidth.
There are 2 different VoIP protocols that define how devices communicate
with each other: Session Initiation Protocol (SIP) and H.323 protocol. Both
work fairly well and each has its own advantages. SIP is specifically designed
for voice transmissions and is better suited for VoIP use. Because H.323 protocol
is used for data transmissions, videoconferencing, and a host of other applications,
it is not as efficient. But since it has been deployed on a much larger scale,
H.323 may be to SIP what the VHS was to Beta. In other words, though SIP is
superior for VoIP applications, it isn't going to eclipse H.323 anytime soon.
How VoIP works in business
Initially, Private Branch Exchanges (PBXs) and key systems were designed to
reduce the amount of human intervention needed to make and receive phone calls.
They also kept the number of required cords to a minimum. But as data transmission
technologies expanded, many PBX makers began to integrate VoIP to help their
users save money. If your PBX isn't VoIP-enabled, not to worryyou can enable
it yourself. By connecting an IP gateway between your PBX and your intranet,
calls will be routed through your data line and will circumvent long-distance
PBX manufacturers aren't the only people dodging traditional phone lines. Long-distance
carriers themselvesthough careful not to abandon their lucrative circuit-switching
businesshave been using VoIP technology behind the scenes for years. Though
you probably haven't realized it, a lot of your calls, especially international
ones, are currently directed through data lines.
So how good is VoIP?
Businesses with extensive overseas contacts or high call volumes will benefit
the most from VoIP. But many international companies and call centers have been
reluctant to dive in because of significant previous investments in circuit-switched
platforms. And then there's the issue of transmission quality
During periods of high network congestion and limited bandwidth, digital packets
are often dropped, making for poor call quality and lost connections. But if
you're using VoIP over internal data lines (such as your intranet), bandwidth
is more predictable and you should experience less data loss. Intranet users
can also use more sophisticated VoIP programs that support full-duplex, real-time
Another reasonable complaint of VoIP is that when fully adopted, what happens
when your network goes down? No computer. No phone. Unfortunately, this is a
hazard you have to live with for now.
But then there are the undeniable advantages. Given that VoIP circumvents long-distance
tolls, calls will typically cost from a few pennies per minute to nothing at
all. Aside from this cost savings, the dream is to have the ability to collaborate
with multiple people on projects without worrying about the different applications
required. You won't have to call each other on the phone and e-mail each other
revisions back and forth; you'll simply sit down at your workstation and collaborate
on projects as if co-workers and clients are seated directly in front of you.
The future of VoIP
Overall, quality of service problems will improve as faster transmission systems
become available. Microsoft has recently included VoIP software in their Windows
XP and promises to make net-based calling as good as regular phone services.
The software giant's presence alone should improve the VoIP market considerably.
But even if their bold promise isn't fully realized in the near future, intranet
users can still experience distinct advantages from VoIP technology right now.
* If you're looking to use VoIP without a LAN, WAN, or PBX, read
my article "Which
VoIP Service Is Best for You". Here you will find how non-intranet
users can download applets and make free calls immediately through their standard