Practical Ecommerce

Can VoIP Help My Business?

Major telecommunication companies and start-ups alike are trying to establish themselves in the rapidly expanding VoIP marketplace. That hasn’t escaped the notice of many people within the Internet telephone business, who anticipate 2007 could be a banner year for the technology.

VoIP (voice over Internet protocol) essentially refers to Internet telephone service. It is the ability to use a high-speed Internet connection to talk on a phone. VoIP offers phone services and features often not available through traditional telephone services.

The technology has been around since the 1970s, but hasn’t been practical until recently because it requires a high-speed Internet connection, or broadband. Broadband through DSL, satellite and cable providers has only become widely available to residential subscribers in the last three to four years. Though that kind of bandwidth was available to businesses a bit sooner, most businesses have not really considered the immense implications and applications for Internet telephone service.

Lynn Brackpool of VoIP provider SpeakEasy.net, described 2006 as huge for the VoIP industry, but says 2007 will be “off the charts.”

“VoIP will do for business what cellular service and high-speed Internet did,” she said. “Most business providers of VoIP services allow customers to essentially become their own phone company.”

Even though VoIP has generated a sizeable amount of industry buzz and television commercials for companies like Vonage are omnipresent, many business owners still have questions about voice quality, special equipment needs to utilize VoIP and whether the new technology is worth making the switch from traditional telephone service.

Is VoIP Quality An Issue?

At one time, VoIP quality was a critical issue. However, recent advances in bandwidth and improvements with desktop computers and VoIP hardware have considerably reduced the quality concerns from the earliest days. A recent study by Infotech research group indicates that quality and reliability of IP telephony solutions have met or exceeded expectations in 80 percent of cases.

Special Equipment Needs For VoIP

According to Voip-news.com, the simplest setup is using one of the PC-based/software-based solutions like Skype. These use any PC system connected to the Internet over a high-bandwidth connection like DSL or cable. The PC needs to have a loudspeaker and microphone or a headset; the software then handles the calls. Calling other software-based systems that use this setup typically works well and is free. Calling “regular” phone numbers often costs money or requires additional equipment.

The next level of setup is the typical consumer VoIP system designed to replace a single regular phone line. These are offered by many larger telephone companies and other emerging telecommunications companies. They require a specialized router connected to your Internet connection that splits Internet traffic and voice traffic and distributes it. These routers also manage the traffic load to maintain voice call quality. You can plug a regular telephone into them.

Small offices and small business setups may require some kind of I-PBX solution so that each line can have an extension and calls can be switched and transferred easily. They also need to evaluate more advanced options for conference calling, automated attendants, call grouping and many other options. Typically, pricing is based around number of lines and feature sets.

Large organizations need to evaluate hosted or purchased solutions involving routers, switches and more heavy-duty equipment. This should include an analysis of existing networks and potential network upgrades.

Services Provided Through VoIP

Many VoIP providers offer a full spate of services in a standard package such as call-waiting, call-forwarding, station assignment, remote operation, find-me/follow-me feature, click-to-dial contacts with Microsoft Outlook integration and voicemail-as-email — the possibilities can make one’s head spin.

It becomes as simple as point-and-click to change your phone services rather than call-and-hold for a customer service representative. Another attractive feature of VoIP is the ability to determine the availability of friends and family members before you place your call. With VoIP, a person can “set” an availability status, much like messenger software allows.

VoIP indeed appears to be one of the next big things for businesses and the average consumer. Depending on the service you select, you can receive literally hundreds of phone options for the same price as you now pay for basic telephone service.

With a marketplace that is balloning with new providers, its easy to locate options. A simple Google search will net a multitude of results, so it’s important to do your research to find a company that is dependable and best fits your businesses’ needs.

SpeakEasy, for example, is a veteran company in the marketspace with 10 years of experience, but it is only available in some of the larger metro markets at this point. Compare that to a giant like Vonage. If you haven’t seen a Vonage television commercial or a pop-up ad on your favorite website displaying the company’s orange logo, probably haven’t watched or surfed much. Some estimates say that the company is spending $20 million a month in advertising.

Vonage sought to capture the VoIP market through a revenue-generating model from the start. Customers can pay $24.95 per month for unlimited calls; however, like traditional phone companies, there are some other fees as part of Vonage’s service.

Contrast Vonage with Skype, a software-based service that allows consumers and businesses to place free calls from their personal computer, many times without additional hardware. Skype used a “free” service to build its initial network, but now offers paid plans if you want to call “real” telephone lines. Skype users can still call other Skype users online for free. Another feature included in the VoIP concept is video telephony. Look for services to increase the use and options of video phones in the future.

Can I keep my current telephone number if I switch to VoIP service?

Unlike traditional telephone companies, VoIP providers are not required to keep numbers when customers switch to or from another provider, so you may have to get a new telephone number offered by the VoIP provider. If you decide to cancel your order with a VoIP provider, you may not be able to get your old telephone number back, even if you return to the same traditional carrier you had before. If you are considering a switch to VoIP service and would like to keep your existing phone number, check with potential VoIP providers to see if they have the capability to keep your current number.

The hundreds of companies and individual representatives that are urging people to consider VoIP are in an all-out battle for market share in this high-tech arena of market share battles.

Even traditional telcos are offering a range of VoIP services for their customers. While many are looking to use VoIP as an end-around on phone companies, AT&T and others are bulking up their net offerings in order to keep existing customers and appeal to new ones.

Brian Buffington, executive director of marketing for VoIP at AT&T said, “We already have a world-class global network that gives us a competitive advantage. We see VoIP as fitting in with our already widely diverse range of services as adding increased feature functionality.”

Touting the communication giant’s ability to provide customer service and a broad portfolio of other services in addition to VoIP, Buffington noted AT&T is also able to offer customers seamless integration between traditional telephone connections and VoIP services within the same small business.

It May Not Save You Money

Business VoIP provides options for multiple lines but is dependent upon your Internet connection. For larger businesses, you may have to expand your broadband capabilities and purchase a T1 line or higher. For many, this will not be cost-effective.

One false conclusion is that VoIP will save your business or home quite a bit of monthly expense. That’s false. While you may save some, VoIP isn’t necessarily going to cut your budget in half. VoIP adds a host of attractive features and services for what you may already be paying.

According to Asteriskvoipnews.com, typically any VoIP system — residential on up — offers slightly lower operating costs (contrary to advertising claims, the cost savings are small), but offers a big step forward in available features and functions. For example, it is now perfectly feasible and cost effective for a 20-person small business to run a call center of its own and to have one system manage main and branch offices and even remote and telecommuting workers.

Unfortunately, there isn’t a single formula a business owner can use to plug in a set of current telephone expenses and have it calculate potential savings with VoIP. The financial impacts have to be reviewed on a business-by-business basis.

There are three clear messages to be learned and remembered as you start up any VoIP service at any level. According to Voip-news.com”

First “it isn’t about saving money — it’s about added value, features and services.”

Second, you can find a VoIP provider that will meet and exceed your needs and expectations.

Third “buyer beware.” You need to look at the details. Compare plans over three to five years with expected growth scenarios. Look at the costs to drop a poorly performing plan as well as the startup costs. And expect more from your telephony system than ever before.

In any burgeoning market, there will be those who are “early adopters‚” and leap on the VoIP bandwagon, while the vast majority of folks wait for the dust to settle. As we’ve seen with the cellular and Internet service provider industries, it will be just a matter of time, for VoIP to become an attractive alternative for everyone.

Learn More

To compare companies in the VoIP marketplace for commercial or residential service, check out a buyer’s guide at Voip-news.com.

Top 5 Things to Consider about VoIP

  1. Decide your ultimate telephony strategy. If you run a large business and are looking to save a lot of money, then VoIP may not be for you. The necessary hardware and broadband investment may exceed what you’re currently paying for traditional service. On the other hand, if you’re a small business, with only 1-3 phones needed, you may be an ideal candidate. VoIP gives you extensive phone features not available with traditional service.
  2. Think features, not necessarily savings. As mentioned above, the diverse (and some would say “amazing”) range of features available to VoIP customers is truly revolutionary; however, it may not save you all that much on your monthly bill.
  3. Evaluate your existing broadband capability. DSL and cable broadband work fine with 1-3 phones, but are impractical due to the high demand for broadband for more hookups. You may have to upgrade your service to a T1 line in order to maintain quality voice and data connections. A T1 line, on the other hand, can range between $400-$500 per month.
  4. Today’s VoIP will be yesterday’s tech trash. The market is going so fast and so quickly that what “can’t be done” today will be commonplace tomorrow. If you keep waiting for the right moment to move to VoIP, it may never arrive. The market and technology are changing quickly.
  5. First impressions make the difference. One immediately practical advantage to VoIP is due to its feature-rich ability to fully manage your phone system. Even a “mom and pop” business can seem like a large corporation with answering services, voice options, remote management and other phone services.
Practical Ecommerce

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  1. Legacy User January 22, 2007 Reply

    Finally, somebody that gets it! Great article! I deal with enterprize level customers everyday and they initailly think like everyone else (cheap phone service) until we show them soultions to problems that previously could not be addressed by traditional TDM service. With proper analysis , solutions have resulted in increasing revenue and overall lowered costs- Nice Job Jeff! CM

    — *Chip Meacham/ broadsmart*

  2. Legacy User January 23, 2007 Reply

    My company is helping VoIP companies market their products. This is one of the first articles that really explains VoIP for the uninitiated. Great article, good information covering most of the important issues. http://www.mcshome.com

    — *Jim Hauer*

  3. Legacy User January 23, 2007 Reply

    I set up a Skype In phone number to run my business line. Suddenly for about the last month, anytime someone attempts to call my number from a land line it gives a busy signal. After contacting Skype support over five times a couple weeks ago, I've yet to receive a single response or recognition of the situation. Others apparently are having the same problem. What good is this technology, if companies like Skype cant provide a reliable line to businesses? I thought it would be a great tool, but sure enough, I've been left out in the cold and will only rely on telco for my business. At least they have a phone number and respond to customer issues. Skype is totally faceless.

    — *Fred*

  4. Legacy User February 1, 2007 Reply

    If you're a customer, whatever you do, don't try to save any money. Saving money is foolish. Get more features. Remember this and never forget. Whose side u on?

    — *Bill Purgatory*

  5. Legacy User June 25, 2007 Reply

    What is the back up in case of an internet outage? Just revert back to basic telephones? Just curious?

    Student

    — *Richard*

  6. FreedomIQ April 22, 2009 Reply

    This is a great introductory article to business VoIP phone solutions. However, one thing it does not address, which is understandable because it is a little bit more advanced, is the difference between using a hosted VoIP phone solution and buying or leasing a phone system. Hosted VoIP phone solutions offer a ton of benefits ranging from savings on equipment, maintenance fees and upgrades to tons of features and advanced tools. This is a great article to learn about how a hosted solution can help your business:

    http://www.freedomiq.com/about-us/whats-new/slash-phone-costs-increase-productivity.shtml

    I would recommend checking this out. And in most cases, especially in the case of an entrepreneur operating on a budget, I would recommend a hosted solution such as FreedomIQ or something similar.