Look Ma, No PBX

by Bonny L. Georgia

Here’s a hellish phone message: “Sorry I can’t take your call right now. I’ve just changed offices and we’re still waiting for the phone guy to show up and make the switch. Just leave a message, and I’ll get back to you ­ well, hopefully someday.”

Until recently that disruption in communications has been unavoidable when a new person gets hired or an employee moves one cubicle over. Soon, it may be possible to stay connected, thanks to Voice over Internet Protocol (VoIP). VoIP provides the capability to deliver voice information in digital form through Internet connections.

When most people think about sending voice through the Internet, they think of free long distance. But businesses don’t need that: They’re willing to shell out for phone service that doesn’t drop connections or make conversations unintelligible. Instead, VoIP offers a different kind of freedom ­ the freedom to move, add, delete, or expand without fear of disruption or an over-dependence on the phone company.

VoIP tools are out there and in place, but who’s buying them? So far, not all that many businesses. But not because it’s not a viable technology. Maybe it’s because the vendors haven’t made the benefits exactly clear. Here’s what you need to know before considering such a plunge.

VoIP technology works by converting voice signals into packets of data and then transmitting them across the Internet or a wide-area network (WAN). The packets arrive at the branch office or a local Public Switched Telephone Network (PSTN) gateway, and are reassembled into voice signals and routed to the number being called.

Calls over a private WAN never touch the public telephone network, so they are in effect free (you pay only for the cost of bandwidth). Since calls made to clients or customers outside your network bypass the regular telephone network until they hit the PSTN gateway, they are subject to local toll charges only from the gateway to their final destination.

Calls made through a WAN travel just the same way calls through the public Internet do ­ but come through much better. “There’s a big difference between IP telephony and Internet telephony,” says Roger Walton, a senior analyst for Ovum, a research and consulting company that offers advice on Internet telephony (IT) and telecoms. When using IT, traffic jams on the Internet can cause packet loss or delays that result in poor message quality.

“If you’ve got a round trip delay of more than a quarter second, the quality of conversation isn’t very good. That’s why most people don’t consider [Internet services] suitable for business use,” Walton says.

In an internal IP telephony setup, private bandwidth (like a T-1 connection to your ISP or a WAN link between company branches) carries the voice signals. Because the network traffic can be carefully monitored and voice calls can be assigned priority over other data traveling the network at the same time, the experience is as good as using a regular telephone line.

For a few folks, getting free long distance calls might seem reason enough to consider trading a hardware-based PBX for IP telephony tools, but Dave Carter, president of integrated service provider Dialink, which began offering hosted IP-PBX services this spring, argues the extra flexibility an IP setup brings is more compelling.

“In the past we would roll a truck, do a full system installation, and all the network maintenance associated with that. With our [virtual] hosted PBX, there are no more physical connections to outgrow,” says Carter. Instead of installing separate hardware equipment and lines, the office Ethernet connects the phones. A handy administrative software tool takes care of generating phone numbers and activating extensions.

Removing wiring constraints also means anyone linked to the Ethernet can have an office phone extension ­ from remote sales to teleworkers to temps. This software administration approach also gives the power to handle other internal moves, additions, and changes instantly.

Communications leaders like Nortel, Lucent, AT&T, and others are already peddling VoIP-enabled telephones, network gateways, and outsourced services directed at the business market. And if they aren’t doing it already, the company that sold you your PBX will probably be offering IP telephony alternatives along with their traditional systems soon.

Keep in mind though that because the industry is so new, most service providers have been field-testing IP solutions in businesses for a year or less. And the most robust business-oriented IP telephony applications are a minimum of six months to a year away. Moreover, there are no established industry standards for voice compression technology or quality of service yet, making this an even riskier bet.

Most importantly, if saving money is among your motivations for trying IP telephony, Walton cautions that even if you have a WAN or tons of extra bandwidth, your network may require upgrading before it is able to support the packet switching and prioritization of voice over data necessary to achieve consistent call quality. Depending on the service provider selected, you may also need to shell out for gateway hardware, network cards, or other tools as well.

“Keep your eyes open for service providers that are outsourcing IP telephony services on their own network,” he says. “They may be able to offer you services at a much lower price and you will probably not have to do anything to the network.”

Small businesses with branch offices and a high-quality WAN link are in the best position to take advantage of these new tools, but with the Internet telephony still firmly in its infancy, Walton believes a wait-and-see approach is best for small firms without their own WAN. In the meantime, change that voice-mail message.

Small Business Computing Staff
Small Business Computing Staff
Small Business Computing addresses the technology needs of small businesses, which are defined as businesses with fewer than 500 employees and/or less than $7 million in annual sales.
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