The Ins & Outs of Voice Over Internet Protocol (VoIP)

Voice over Internet Protocol (VoIP) is a technology that allows you to make voice calls using a broadband Internet connection (and, therefore, your computer) instead of a regular phone line.

VoIP has become the new standard in voice communications, and most businesses have updated to this kind of service because it provides a number of advantages. These include cost savings, e-mail integration for easy voicemail access, and enhanced voice clarity allowing you to multi-task while making a call from your computer that is indistinguishable from making it via a traditional phone.

If you have updated your voice services, are you using the right type? If you haven’t yet, which type should you use when you make the leap?

Here, we provide an overview of the two primary types of VoIP to make sure you use the best fit for your organization.

    On-Premise VoIP

    As the name might suggest, this service’s equipment and software is installed at your company’s offices. This means expending capital expenditures (CAPEX) to procure the hardware and software up front, along with your staff’s time to build the system (or hiring a third party to do so), but fewer ongoing operating expenditures once the system is up and running compared to hosted voice services.

    With an on-premise system, you get significantly more choice and control, so you can make any changes you’d like whenever you wish. But that comes with more responsibility (and at times, headache).

    Your technical staff (or a third party hired for the task) is responsible for procuring, installing, and maintaining the hardware and software used to provide this service. This means they must take ownership for voice quality management, voicemail, dialing features, you name it.

    Additionally, your team will be responsible for any scaling of the system. This can be challenging, so an on-premise system is likely a better fit for your business if it is fairly stable in size.

    Hosted VoIP

    In a hosted VoIP model, everything needed for the system (other than the physical phones) is provided by hardware and software that is hosted elsewhere and managed by an external provider. While there are some installation costs, the real costs for a hosted system come down the line in the form of monthly fees. So if your business prefers operating expenditures on its balance sheet as opposed to CAPEX, then hosted VoIP is for you.

    In a hosted model, your service provider handles installation and ongoing maintenance, so all you have to do is indicate which features your organization would like enabled. While this level of ease is a definite pro, the flipside of this is that any support requests are channeled to the provider, which means you lose a level of responsiveness and ability to make changes.

    Where hosted VoIP solutions really shine is when you need to scale your system. Since hosted VoIP systems are usually part of a much larger collective platform, resources can be quickly shifted to meet the needs of your organization. Thus, if your enterprise is experiencing rapid growth, a hosted model will likely be much better for you.

As you can see, the decision to opt for hosted versus on-premise VoIP really comes down to understanding your enterprise’s needs and capabilities. By considering your organization’s strategic direction, projected growth, budgetary constraints, and human capacity to support a VoIP network, a clear winner will begin to emerge. This consideration will take time, but it will make all the difference in your success from that point forward.