What is VoIP and How Has It Changed Business Communications

It’s hard to believe that only a few decades ago there were no smartphones, the Internet was barely a glimmer in the eye of the public, and phone services at companies relied on complex switchboards and operators. But in the 1990’s, the Internet came along and many businesses started to adopt it as a way to improve business communications.

What is VoIP Phone Service?

VoIP phone service (Voice over Internet Protocol) allows an IP PBX (Private Branch Exchange) to make calls over a company’s Internet/Intranet. Other frequently used terms for VoIP phone systems are hosted PBX, virtual PBX or VoIP PBX. VoIP phones can be delivered via a cloud solution that is managed by a third-party host, or via an onsite solution managed by a dedicated IT resource.

VoIP consists of an IP PBX and other VoIP-enabled phones such as desk phones equipped with VoIP features or software-based softphones.

How Does VoIP Phone Service Work?

VoIP service takes the analog audio signal and turns it into a digital signal transmitted over the Internet. This means you get phone service over the Internet instead of through traditional hard lines powered by a phone company.

Most VoIP providers today use either IP phones or computer-to-computer technologies to place calls. IP phones are just like traditional handsets with all the features, but instead of being plugged into the phone system, they are plugged directly into the Internet router via Ethernet or Wi-Fi. IP phones have all the hardware and software inside to handle calls. Wi-Fi phones are enabled for users to make calls from anywhere where there is a Wi-Fi connection.

Computer-to-computer calls are just what they sound like. All you need is a mic, speakers, a sound card and an Internet connection.

VoIP networks use packet switching versus the traditional phone service way of using circuit switching. It is a much faster technology because it only opens a brief connection long enough to send a chunk of data, and follows the most efficient path.

Check out our easy-to-use hosted VoIP Phone Systems >

What are the Benefits of Hosted PBX Phone Services?

1. Mobile

VoIP phones enable calls to be made anywhere you have a broadband connection. This is especially important for companies with a mobile or remote workforce. Employees are no longer tethered to their desks to make phone calls from a certain number. VoIP phone service allows those employees to use the same phone number across the world.

2. Reduced Cost

Because you are using the Internet, long-distance calls are a thing of the past. Also, it used to be pretty expensive to add a line to the old PBX systems, but now it is economical and nearly effortless. Additionally, VoIP can be easily upgraded as new software is released – without having to replace hardware. And anytime you cut out the complexity of a system, you save your organization money.

3. Less Hardware

VoIP PBX can be done completely in the cloud, without any hardware or committed internal IT team to manage the phone service. But even companies with onsite VoIP applications have smaller hardware than the old PBX systems that required a rather large phone server and new boards every time you made a change. And, with VoIP phone services, all your business communications are on the same data network.

4. Scalable

VoIP is the reason cloud phone services exists. And because of the cloud, companies can use as much or as little capacity as they need, and scale up or down as their needs change. If a company needs to move, or add a line, this is easy to do because of VoIP.

5. Easier to Communicate

VoIP phones make it plain easier for businesses to communicate with the most important people – their customers. Your phone service is an extension of your brand’s experience for customers, and an easy-to-use system is better for all stakeholders, internal and external.

6. More Features

Many VoIP phone services provide features that would cost extra with the phone company as part of the standard package. Features like call forwarding, three-way calling, caller ID, electronic and video messaging, video conference, online meetings and more are available with VoIP. Some of these features aren’t even available with traditional phone services. VoIP phone solutions can serve as the basis of all your communications, and integrate with email and calendars.

7. Increased Productivity

Because many VoIP services offer the extra features mentioned above, your employees have access to all the tools required to be more efficient and productive. Often, VoIP phones offer more intuitive interfaces which allow employees to start using the phone service with little to no training. VoIP integrates easily with other company applications as well so your business can use it as a strategic advantage with better business intelligence.

VoIP is Changing How We Communicate

VoIP phone service has changed the way everyone communicates. It has allowed businesses to be more mobile, flexible and save money. It has allowed people all over the world to stay connected without paying high long-distance fees. Plus, it gives smaller businesses an option to have reliable phone service, without a dedicated IT team and an in-house system.

Ready to learn more or make the switch? Get a hosted VoIP quote or contact us >

VoIP Phone Service – What Is It and How Did It Change the Way We Communicate?