Home / Blog / What is VoIP?

What is VoIP? A business operational perspective.

VoIP is a fast paced growing technology that may still be misunderstood by even tech savvy executives.

I frequently scratch my head when I have discussions with business owners or executives that tell me they want a VoIP telephony solution - more commonly - a computer telephone system. Some make the effort to read and are better informed before a meeting than others, there are still some points that need to be understood. Voice over IP (VoIP) technology has key elements that make it VoIP. The most prevelant of which is that voice traffic traverses a data network and not the traditional PSTN analog network (which is quickly becoming obsolete). Data networks are still in large part dedicated and predicated to the use of computers and a businesses day to day operations. In the past 8-10 years the implementation of VoIP telephony has grown exponentially.

Now, to the question. What is VoIP? Instead of telling you about the translation to and from analog to digital that occurs at some point in the process, I want to put this in terms of business. The fundamental purpose of VoIP was and is to save money, lower operating costs and provide an operational advantage. There are fundamental conditions required before VoIP can exist:

  1. A business has more than one location, more appropriately in different geographic regions
  2. A business connects their locations with data networking (i.e. VPN, MPLS, etc.)
  3. A business has expensive telco costs
  4. A business wants to save money in the long term

VoIP - implies that voice traffic traverses a data network; however this does not simply mean over a local network. If you currently have an in-house PBX system (i.e. Shortel, Nextel, Lucent) and durable, functioning handsets on your desk - you may not need to change a thing. You will invest money in technology that looks nice, performs well but does not save you money. Now if you have multiple locations (i.e. one in El Paso, TX and one in Phoenix, AZ) and regularly have to call between locations then there may be potential for cost savings using VoIP technology. If personnel between the two locations talk on a frequent basis, individually or in grouops, then there is likely a charge for long distance between the two sites and ultimately with customers as the two locations support each across respective borders.

Bring VoIP technology to bear so that staff in El Paso, TX no longer have to dial 602-480-XXXX to reach the Phoenix office. Instead staff can dial the 3-4 digit extension (i.e. 3605 - Sally) to speak to Sally and discuss the presentation that needs to be wrapped up next week. Only with VoIP the call traffic does not ride the PSTN public network and toll charges are not incurred. The offices are linked together with a MPLS network that has 10MB circuits at each location and only a small fraction of these circuits would be necessary to deliver voice traffic.

This may slightly or significantly reduces cost for telephone service options, which requires review and analysis of an organizations needs.

Contact Us