What SMBs Need to Know About VoIP

There’s so much talk about Voice Over the Internet Protocol and SmallBusinessComputing.com gives us a very timely overview of what we need to know about this emerging technology.
Everywhere you turn it seems there is another ad for Vonage ó a VoIP-based phone service (define) that uses a broadband connection to save money on calls. Even the traditional telephone and cable companies are starting to push the service. The technology of VoIP itself is not new ó telephone companies have been using it in their own backbone for years. What is new is rolling the service out direct to end users.
But there is another aspect of VoIP that is more important from a business standpoint. Replacing existing internal phone systems with VoIP networks can cut costs, simplify administration and enable a variety of new applications which improve collaboration and productivity.
From Analog to Digital
VoIP represents the latest in a long series of actions to change voice transmission from an all-analog to an all-digital process.
The analog system has a tremendous quality of service built in. It assigns a dedicated end-to-end connection for each pair of users, with separate channels to allow simultaneous two-way transmission. Those lines could carry a lot more than just two people’s voices but they don’t, thereby wasting a lot of potential bandwidth. Standard phone service is like having your own limo waiting outside your door with the motor running ready to take you anywhere on a moment’s notice. It is very good service, but also not very efficient.
VoIP, on the other hand, allows many voice transmissions to pass over the same piece of copper or fiber by dividing the communications into packets and then routing these packets, mixed in with those from other users, to the other person in the conversation. VoIP is like having a fleet of shared taxicabs. It makes very efficient use of the available resources, but you still may end up standing in the rain trying to catch a ride. (full story)