VoIP buying guide for small business

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The cord-cutting movement isn’t limited to consumer cable and Netflix. As Voice over Internet Protocol communication matures and as high-speed Internet becomes cheap and ubiquitous, an increasing number of businesses are ditching conventional landlines and jumping to VoIP.

VoIP sounds almost magical: The hype makes it sound more flexible, more full-featured, and best of all, significantly cheaper than placing your calls through traditional telephone service providers.

But is VoIP really all it’s cracked up to be? Are the potential pitfalls worth the potential monetary payoffs? I’ll walk you through the basics, discuss the pros and cons, and take a look at three commercial VoIP services of varying complexity.

Depending on the size of your company and the infrastructure you already have in place, jumping on the VoIP bandwagon could cost your company next to nothing, or it could entail significant up-front costs.

VoIP requires a broadband connection—and the more simultaneous users you have, the more bandwidth you’ll need. If you work alone out of a home office, or if you have only a few employees, you won’t have much to worry about; for example, on my setup, running RingCentral’s Connection Capacity utility shows that my 15-mbps home Comcast connection could handle 11 calls simultaneously even if I had Netflix, Spotify, and an instant-messaging client running on the network at the same time.

Make sure that your internal network—including your routers and switches—can handle the load, too. Most providers suggest using a router with configurable Quality of Service settings and assigning VoIP traffic high priority to maximize quality.

If your Internet service provider has a bandwidth cap in place, you should take that into consideration as well. Most VoIP service providers use the high-quality G.711 codec for VoIP communications, which consumes 64kb of data every second you talk. In reality, even a large number of people should be able to chat it up on VoIP without having to worry about hitting bandwidth caps, but you’ll want to keep close tabs on your data usage to avoid exceeding that cap.

Finally, even if you subscribe to a cloud-based hosted VoIP service, you’ll need to make sure your phones can communicate over VoIP. Most VoIP systems use session-initiation protocol technology to assign each phone or VoIP software client a specific address; that’s how the IP-PBX routes calls to specific lines. As such, you’ll need a SIP-enabled phone to make VoIP calls. (Some VoIP systems use H.323 technology rather than SIP, but those are rare.) If you want to keep your old analog touch-tone phones or fax machines, you can plug them into an analog telephone adapter (ATA), but they won’t be able to use many of the advanced features that SIP-based VoIP phones provide.