VoIP, IP PBX: The ABCs of Telephone Systems

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Long gone are the days where the telephone was simply wire flowing between poles, down into offices and behind the walls into the handset on someone’s desk. In relatively short order, phone calls have moved from telephone lines to cable, satellite and Wi-Fi channels, with greater features and more capacity.  VoIP (Voice Over Internet Protocol) is leading the way in terms of interest among business owners.

“The reason we go to new technology is we want to save money,” said Sean Finney, owner of United Data Voice in Castro Valley, Calif. “We want to do the things we’ve done before but better and cheaper.”

More and more, the way to do that is via the Internet. If you’re growing a business, you want to save money while at the same time projecting a professional image that sends the message that you’re up-to-date on technology. New Internet-based telephone systems are allowing companies to achieve both goals.

Some terms you’ll want to understand when you go shopping for a telephone system.

PBX

The Private Branch Exchange, or PBX, came into being in the 1960s. This hardware and hardwired system allows multiple users in a location to make calls to one another without going outside the internal network. When you call Fred in accounting by dialing extension 214, you’ve used the PBX system. PBX also enabled many of the services we take for granted, like voicemail, that can be stored on the system’s server.

Of course, a PBX system connects users to outside lines as well, via trunk lines that allow more than one user to transmit  over a line.

PBX remains a relevant term despite the wholesale switch to digital voice . Today’s phone systems still incorporate the PBX concept, but newly installed phones these days are more likely to connect via the Internet.

Old-fashioned PBX systems will continue to exist; Sean Finney says they last “forever.” But you’ll be hard-pressed to find many companies installing them.

VoIP

The development of VoIP, has prompted a migration to digital voice transmission. The system allows voice data to travel through the same pipe as the digital data accessed via e-mail and web browsers. The expansion of bandwidth over the past decades has accommodated ever greater amounts of data to travel the Internet, and create greater opportunities for cost savings.

VoIP offers a more scalable system in which fast-growing companies can add more users. Features that often triggered extra charges through a traditional line are often free via VoIP because of open-source software.

Choosing a reputable provider of phone systems will prove crucial with VoIP,  Finney said. He emphasized that the voice data has to take precedent over other transmitted data. Otherwise, phone calls might experience delays, which Finney guaranteed would lead to dissatisfaction.

IP PBX

An Internet Protocol PBX system allows a business to connect internally over its data network and then choose to connect externally either through a traditional public wired system or through a digital network.

The IP PBX pays dividends for businesses with associates in multiple locations. Whether a business has associates in five offices or 50 sales people working from their homes, they can all gain access to a network that treats them as if they were in one building. IP PBX can eliminate long-distance charges for intra-company and can also save in administration, as one receptionist can act as the front desk for employees all over.

Hosted PBX versus Self-Owned PBX

The question of hosted service versus self-owned centers squarely on size. A hosted PBX system means that your voice services funnel through a communications provider. That provider owns and maintains the server that stores voicemail, executes conference calling and all other telephone features for a roster of clients. A hosted system also offers protection from a breakdown in Internet connection. If a company loses its Internet connection, calls still come into the vendor’s server where voicemail can capture them.

As your company grows, along with its capital technology budgets, it might make sense to own a PBX system. “It’s something you can grow into,” said Michael Oeth, owner of Junction Networks in New York City. Oeth works primarily with small and medium-size businesses, and said there’s no magic number as to how many users warrant a proprietary system, but businesses making such a choice should have a robust technology department to handle changes or problems.

Both Oeth and Finney suggested that companies shopping for telephone systems think in simple terms: What don’t you like about your current system? And what would you like to do?

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