Is there a VoIP in your future? Voice over Internet Protocol sold as phone cost-cutter 

By Lora Volkert

IDAHO BUSINESS REVIEW

“I call it my ‘puffer fish mentality.’”

Being able to make her small company look like a “big fish” was the main reason Erin Olsen, owner of computer training center PCKeys Technology Solutions, said she switched from regular phone service to voice over Internet protocol three months ago.

“We’re a small business, but we have to be able to puff ourselves up and act like a big one.”

Olsen wanted a “big business” style phone system with call transfer features, individual extensions and voice mail boxes for all her staff, and an automated attendant to direct calls after hours.

But the PBX switchboard and 10 phone lines required for that were cost-prohibitive, she said.

Instead, Olsen replaced her two regular phone lines with a voice over IP system – also known as IP telephony or Internet telephony – which allows her to place calls over the Internet. VoIP service is also offered over private data networks.

She purchased VoIP consoles that plug into her business phones. The consoles convert phone conversations into data and route fragments of data over a broadband connection.

The data fragments are reassembled and converted back into audio before they reach the receiver.

The upshot is that Olsen can connect all her phones to her Internet server instead of a PBX switchboard.

The consoles were much less expensive than a PBX. Monthly service costs about 15 percent more than it did with two regular phone lines, Olsen said, while at the same time eradicating “soft costs” in terms of “how much more business you get when you appear professional because you can put people on hold.”

Demand is moderate for VoIP service in the Treasure Valley, though curiosity is high, said Christopher Hansen, vice president of sales and marketing for Zial Networks, Boise.

Zial is a distributor for Santa Clara, Calif.-based VoIP service provider Packet 8 and a handful of other providers. Olsen is one of his customers.

Cost factors are driving demand, said Ron Gudapati, account manager for Cisco Systems Inc.’s Boise office.

Most businesses run a return on investment analysis before they adopt VoIP, said Gudapati, who sells Cisco’sVoIP phone equipment through Qwest, Idacomm, Sarcom, Mountain States Networking, and others.

Companies evaluate the potential for hard savings in their monthly bills and soft savings in terms of productivity gains, he said.

For example, technology department staff could be more productive because they spend less time maintaining the phone system.

A PBX – an old acronym that stands for public branch exchange – is essentially “a big dumb computer,” and administering it can be time-consuming, said Claire Mylott, a spokesperson for Qwest, which offers VoIP as well as regular phone service.

“You have to reprogram the whole PBX if you move down the hall,” she said.

With a VoIP system, all you have to do is pick up the phone and plug it into another server connection.

Olsen said she’s seen soft savings in internal communications. Her staff doesn’t lose messages since they don’t share voice mail boxes.

VoIP also offers soft savings for remote workers because the systems are portable. That helps Olsen, who can take her VoIP console from work, plug it into a phone and an Internet connection, “and I can take calls anywhere &#133 and appear that I’m in my office.”

Systems vary – some let you take your phone with you and plug it into any broadband connection, while others need to be plugged into a computer as well, said Mylott.

In any case, you can answer calls to your work number wherever you are.

“It really makes the idea of a virtual office possible,” said Scott Dike, a product manager for Idacomm.

More often, Olsen leaves the console at work and takes her laptop with her.

Because incoming phone calls are converted into data form, they can be attached to email as a sound file that can be played on Windows Media Player.

VoIP technology offers hard savings even to companies that already have a PBX, according to Dike.

Consolidating phone calls onto a data server or Internet server can help companies use bandwidth more efficiently, he said.

PBX switchboards use bandwidth, just like a server, but the data or Internet connection rarely run at full capacity, so bandwidth is wasted.

Companies can also save on long-distance costs. Costs vary, but Olsen said she calls her brother in Germany for 3 cents per minute and gets free long-distance in the U.S. and Mexico.

Systems that use private data networks can usually route calls only part of the distance, after which phone lines must be used, but that too offers savings.

Because they interface with computers, VoIP systems can offer other advantages.

Depending on the system, employees may be able to set up a “conference bridge” for a phone conversation with up to 20 callers; arrange phone systems so calls ring simultaneously on their work, home and cell phones; transfer calls with a mouse click; or make caller ID “rules” that could send your boss or your spouse to your cell and everyone else directly to voice mail after a specified time of day.

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To contact the story’s author, send email to: lora.volkert@idahobusiness.net. xxxx

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