I wrote this article for a different resource, but it applies, so I figured I would post it…enjoy!

-Schwood
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Voice over IP (VoIP), or the process of transmitting voice calls over a computer network is no longer a new concept. VoIP has been around for many years now, and has promised to revolutionize the telecommunications industry for just as long. The question is…has VoIP yet proven itself to be a viable alternative to legacy voice and PBX solutions? The answer is yes and no.

There are many companies such as Vonage and Road Runner now offering unlimited long distance for a small monthly fee for consumers as well as numerous VoIP providers offering calls to anywhere in the world for pennies per minute. In theory, this is a great concept, and has made these companies millions of dollars in revenue for the consumer market. The business market however, is another story. The smallest of businesses can certainly take advantage of this type of solution, but any small to medium business making more than 5 simultaneous calls will have problems switching to VoIP for one main reason. Internet bandwidth is still too small and too expensive. Most small to medium businesses have DSL/Cable or T1 connections to the Internet where the upload speed is no more than 1.5 Megabits per second (Mbps). At 60 Kilobits per second (Kbps) per voice call, this starts to really add up, and when you factor in normal Internet usage and SoHo routers that can’t prioritize VoIP traffic, you will soon be dropping calls and having ‘tinny’ voice quality. This causes employees and customers to become frustrated, and potentially lost business due to poor voice quality and company representation.

That being said, there is one huge advantage to running VoIP in your business, and that is as an alternative to a legacy PBX. PBX systems from companies such as Lucent, NEC, and Mitel can be horrendously expensive even at entry level pricing. Companies can spend in excess of $25,000 for a PBX that has minimal features beyond providing dial tone and voice mail capability. For additional features, or to run a reliable call center, the price can skyrocket to anywhere from $100,000 to $500,000. By replacing a legacy PBX with an Asterisk based solution such as Fonality’s Trixbox system, you can make literally hundreds of calls within your LAN without reduction in voice quality, and you can get premium PBX features such as conference calling, call queuing, an auto attendant, voice mail to email, paging and intercom, and music on hold for a fraction of the cost of a legacy PBX.

When used as what I like to call a ‘hybrid’ PBX system, this solution can be a huge advantage in both features and cost savings. If you use standard (POTS) phone lines or a voice T1/PRI for connectivity to the outside world in conjunction with a VoIP based PBX for your internal call routing and functionality, you are getting the best of both worlds, and an extremely reliable telephony solution. Asterisk-based PBX systems have their foundation in Linux which has already proven itself to be the most stable enterprise level operating system available today. I have had Linux servers in production data centers online for in excess of 400 days straight without a reboot. Linux web servers running Apache serve the largest percentage of web pages on the Internet today. I am completely comfortable using it for telephony as well. Used with the proven reliability of the ‘Ma Bell’ telecommunications infrastructure that has been in place for decades now, hundreds of companies are switching to this type of solution…and the stock prices of legacy PBX providers going into the toilet is proof positive that the paradigm is shifting.

There is one sector where the hybrid PBX solution falls short, and that is for companies with call centers larger than 20 agents. The problem for those companies is not so much the lack of VoIP technology, but rather the lack of management and reporting tools for medium to large call centers. VoIP has tremendous potential in this industry when you consider options such as work-at-home agents, seamless cross-country or international call routing, and cost reduction, however no one has yet created tools robust enough to compete with the agent and call detail reporting and management you can get with a legacy PBX solution. Attention investors! There is a huge opportunity in this market if you don’t mind battling the big boys.

So what does the future hold for VoIP? In my opinion, it can only get better. As we are starting to see Internet connections of 10Mbps and higher coming into homes and businesses, using VoIP for both internal and external voice calls will become a much more viable solution within five years. Once huge fiber links straight to the home and office are commonplace, and Internet bandwidth is sufficient to handle both normal web traffic and tens if not hundreds of simultaneous voice calls with ease, there will be a new paradigm in place to the benefit of home users as well as small to medium businesses. Within our lifetimes I believe we can expect to see the downfall of the legacy telephony infrastructure. Just as analog broadcast television is finally dying out to digital cable, VoIP will reign supreme before we know it.