BusinessTN

With its advantages in both convenience and cost, VoIP technology has staked a claim on the future of company communications.

It’s winter and Mother Nature has blessed city streets with layers of ice and inches of snow once again. In the past, employees have had to slip and slide all the way to the office, but according to telephony industry insiders, all that could be about to change. With the help of Voice Over Internet Protocol (VoIP), technology that carries voice signals over an Internet protocol infrastructure, employees can log into the office telephone system from remote locations, talk to each other, and answer outside calls exactly the same way they would if they were sitting side by side in a building.

VoIP works by transmitting voice signals through the same mechanisms used to transmit data across the Internet.

“Small business owners generally have three options when it comes to VoIP,” says Robert Malnati, director of product and business development at US LEC, a Charlotte, N.C.-based telecommunications carrier. They can utilize IP within their enterprise, a strictly in-house operation that transmits voice using Internet protocol without using the actual Internet. They can take advantage of the “mobility factor” by using the Internet to connect multiple business locations with the same phone system, eliminating excessive long distance calling expenses. Or they can buy a VoIP service from a provider that bundles VoIP service along with Internet access to create a more convenient, efficient way to manage office communications, Malnati says.

While all the advantages of bundling apply—only having to deal with one company and one service bill—VoIP’s unique cost-saving benefits have made it an increasingly sought-after service.

“California-based Radicati Group, a technology market research firm, predicts that 44% of all businesses will use VoIP by the year 2008,” Malnati says.

“VoIP has definitely been a buzzword in the industry for four or five years,” says Henry Franklin, president of both Signal Voice & Data and Chattanooga Voice & Data.

Jerry Dunlap, president and CEO of Nashville-based ISDN-Net, notes that “in the past few months, it’s been picking up like crazy.” ISDN-Net was the first company to offer VoIP services in Tennessee. “VoIP is taking off as quickly as the Internet did in 1996—suddenly it was the biggest thing around and everyone was getting it. The same thing is beginning to happen with VoIP technology.

The growth of the industry is also evident in equipment sales. Cisco, a company that has manufactured VoIP hardware for over 17,000 customers, recently sold its four millionth VoIP phone. “It took us three years to sell the first million phones,” says Alex Hadden-Boyd, director of market management for Cisco’s IP Com- munications Group. “It took us four months to sell the last million. So obviously the market is growing rather quickly.”

“With a VoIP system, a company has more flexibility and mobility,” says David Wise, general manager at ISDN-Net. “An employee can travel all over the country and still make and receive business phone calls on the same phone number he would use in the office. Call center employees can work from three different states without the call-in customers ever knowing the difference.”

“Employers can also save up to 40% on their phone service bill,” says US LEC’s Malnati, referring to the long distance charges that are greatly lessened when VoIP systems are used to connect geographically-separated employees to the same network.

The overall savings, however, are somewhat dampened by the initial startup costs involved in purchasing the VoIP hardware (phones, routers, etc.)—anywhere from between $3,000 and $5,000 dollars according to Malnati.

On the other hand, VoIP is fairly easy to set up and rarely requires any new wiring. Any company with a Local Area Network (LAN) can take advantage of VoIP technology, Hadden-Boyd says.

Before the technology was improved, many manufacturers “got bloody noses by trying to jump in and market VoIP too soon,” Franklin says. “Reliability and quality are the measuring sticks of VoIP.” However, now VoIP communication can be as crystal clear as any land line telephone, Franklin says.

VoIP is also a very reliable means of communication, especially when a business deals directly with a service provider who handles both the Internet and voice data.

“There are multiple redundancies within our network on the connectivity side that prevent any major failures from occurring,” ISDN-Net’s Wise says.

The only major controversy within the industry involves dialing 911. The same technology that makes it possible for an employee to appear as if they’re in the office when they’re really not also has the potential to misdirect emergency services should someone request their attention via a VoIP telephone. The telephone’s data, because it’s connected to the network, will reflect the address of the central port, not its actual location. If an employee called 911 from a VoIP phone at his or her home, the caller ID information would lead the paramedics to the business’s location, rather than to the scene of the emergency.

VoIP carrier companies make this fact known to customers, however, and so far there haven’t been any major incidents.

In all, the disadvantages of switching to VoIP have been few. Quality and reliability concerns continue to diminish, and the high initial set up costs are likely to be offset by future savings. “Change is inevitable,” Hadden-Boyd says. “VoIP is the future of telephony, and it’s here to stay.