VoIP Business Phone SystemsWhen a business starts looking for a new phone system they often ask: What is a VoIP business phone system? VoIP and IP telephony are becoming increasingly popular with large corporations and consumers alike.

For many businesses, Internet Protocol (IP) is more than just a way to transport data, it's a tool that simplifies and streamlines a wide range of business applications. VoIP – or voice over IP – is the foundation for more advanced unified communications applications – including Web and video conferencing – that can transform the way you do business.

“In the last several years, we’ve seen an explosion in the number of companies adopting VoIP as their primary communication mechanism,” says Mike Canipe of TelWare. “Businesses have realized that this option can reduce costs and improve customer service while providing them access to features that increase their employee productivity.”

What is VoIP?

VoIP is a methodology and group of technologies for the delivery of voice communications and multimedia sessions over the internet. A primary attraction of VoIP is its ability to help reduce expenses because telephone calls travel over a data network rather than a public switched telephone network (PSTN). Using a traditional analog telephone, your call is transmitted across a set of copper wires to the recipient. With VoIP, your call is transmitted over the internet as data, just like an email.

A PSTN system works by setting up a dedicated channel between two points for the duration of the call. This system is based on copper wires carrying analog voice data over the dedicated circuits. VoIP, in contrast to PSTN, uses what is called packet-switched telephony. Using this system, the voice information travels to its destination in countless individual network packets across the internet. These packets are then reassembled and converted to voice.

VoIP Business Phone System Features

Below are some of the features of a VoIP business phone system:

  • Ability to call from a computer
  • Conference calling
  • Call holding with music
  • Call queuing
  • Advanced remote office features

Benefits of VoIP Business Phone Systems

The biggest benefit VoIP systems provide over traditional analog phone systems is the cost savings. Companies switching to a VoIP system, for example, will be able to eliminate their monthly phone bills and utilize their existing internet connections. Because of the bandwidth efficiency and low costs that VoIP technology can provide, businesses are migrating from traditional copper-wire telephone systems to VoIP systems to reduce their monthly phone costs. In 2008, 80% of all new PBX lines installed internationally were VoIP.

In addition to cost-savings, many businesses switch to a VoIP system for productivity and efficiency gains, as well as mobility. As the notion of a traditional workforce continues to evolve, VoIP systems allow businesses and employees to communicate and collaborate anytime, anywhere, and from any device. VoIP has the ability to integrate voice and data into a single, unified network that is available anywhere.

"VoIP is becoming an essential tool for businesses looking to gain a competitive advantage," says Canipe. "Companies who take advantage of this communication solution often enjoy reduced costs and improved productivity, while creating a flexible work environment."

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