Types of VoIP Systems

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*Voiceover Internet Protocol (VoIP) allows you to make calls only using the internet, allowing you to bypass the use of phone lines. Learn more about the options that are available to you within VoIP and how they stack up against the competition. *Voice over Internet Protocol is the most significant development in telephone technology since the invention of the telephone itself. VoIP uses the Internet to make and receive voice calls, bypassing telephone lines entirely. This is a truly cordless solution - you can make calls from your existing telephone instrument, your computer, tablet or even mobile phone. Furthermore, since there are no geographical constraints, you can carry your "phone" anywhere with no additional charges. For businesses, VoIP represents a flexible service with as good or better voice quality as standard telephones. It also represents huge savings - you pay for Internet data, not phone usage. Additionally, VoIP software clients can easily double-up as powerful contact management tools. Implementing a VoIP system is one of the best things you can do for your business. The benefits, as you will learn, are many.

Types of VoIP Systems

There are several different VoIP systems that can be implemented and utilized in your day-to-day activity or your professional interactions. Here are a few:

Software Solutions

The simplest form of VoIP is a software application that sits on your computer and allows you to make calls to other users of the application, usually for free. Skype, the world's most popular VoIP software, is an example of such a service. Using Skype, you can call any one of the service's 299 million users for free - from your smartphone, tablet or any other device capable of running the software. While Skype and other similar consumer VoIP applications are perfect for entrepreneurs and very small start-up companies, businesses that want something more powerful should look into hosted and self-hosted VoIP solutions.

Hosted VoIP

With a hosted VoIP service, a third-party provider takes care of the entire installation and call delivery, allowing you to focus on what's really important: your business. The service routes all relevant calls to your business and ensures nearly 100% uptime. This is akin to taking the car to a mechanic, then doing all the repair work yourself. Hosted VoIP solutions cost more than self-hosted systems, but can dramatically increase productivity.

Self-Hosted VoIP

A self-hosted VoIP means you will have to take care of the installation and call delivery yourself. This can be quite tricky unless you have specific domain expertise in VoIP technology. Be prepared to install a private branch network for routing calls to different phones within your system. You will also need a PSTN gateway to convert your analog signals (your voice) into digital signals ready for delivery over the network. Depending on the scale and complexity of the VoIP system, you will require regular maintenance as well. Self-hosted VoIP systems are appropriate for large businesses that have the manpower and resources to implement an in-house solution. Small businesses are better served by hosted VoIP systems. Although they are more expensive than their self-hosted counterparts, they can still end up costing significantly less than standard telephones. Freelancers, consultants and solo entrepreneurs, on the other hand, can use purely software-based VoIP solutions.

Advantages and Disadvantages of VoIP

Use of VoIP software has multiple benefits that can ease your communication. Keep in mind, though, that there are also some disadvantages that come along with them.


As one of the most promising enterprise technologies to emerge in the last decade, VoIP promises tons of benefits, chief among which are: - Cost Savings: Since VoIP transmits voice calls over the Internet instead of telephone lines, per-call costs drop drastically. This is particularly true for long-distance calling where most carriers charge anywhere from 10¢ to as much as $2.46 per minute (see AT&T's international calling rates for home users) for international calls. VoIP, on the other hand, is free (PC-to-PC calls), regardless of the caller's location – you only pay for Internet data. This is perhaps why VoIP services like Skype have completely swallowed up international long-distance carrier traffic. - Portability: Standard phone systems are tied to a telephone line: you can't just pick your instrument and drive across town. Even mobile phone carriers affix exorbitant charges for international roaming. A VoIP system, on the other hand, can be completely portable. You only need a computer/laptop/mobile phone, the VoIP software and a wireless connection to start making calls. - Choice of Number: Since you aren't tied to any specific geographical location with VoIP, you can get a phone number of your choice. You could be doing business in Idaho and own a phone with a Los Angeles area code. International businesses, on the other hand, could obtain U.S.-based numbers at no extra cost. - Software: VoIP services such as Skype give you powerful software tools to manage your contacts. You can search for new contacts, block or hide existing contacts and even make yourself invisible to specific people. The software interface also gives you rich data about the contact in question, including names, pictures and, in some cases, social media profiles. - Rich Media Services: Want to send a document to a contact with a legacy phone system? Better find yourself a fax machine. Want to send several documents? You'd better call a courier company. With VoIP, on the other hand, you can send large documents, videos and pictures to any contact using the included VoIP software. This can drastically improve productivity and ease collaboration. - Low Initial Investment: To get started with VoIP, you only need your existing Internet connection, a free VoIP software and a microphone (most new laptops have a built-in mic). Since there is no special equipment required, start-up costs are negligible. - Additional Features: Features such as click-to-call and find-me/follow-me are available only through VoIP.


Based on the above, you might think that VoIP is the greatest thing since sliced bread (and you wouldn't be wrong), but before you invest in a VoIP system, you must understand the technology's disadvantages as well: - Electricity Dependent: Unlike legacy phone systems, VoIP systems need electricity to run. This means you would be out of communication services during a power outage. This shouldn't impact your mobile devices, however, as they can still run VoIP services through 3G/4G data. - Performance Issue: VoIP requires a relatively fast broadband connection to be effective. A slow wireless connection might result in some performance issues, although with the average broadband speed in the U.S. up to 7.4 mbps, this shouldn't be an issue in most areas. - Hardware Impact: VoIP calls over computers or mobile devices may suffer from performance issues in case of poor hardware. A slow computer, for example, can affect your ability to load VoIP software, make calls and multi-task during calls. - Emergency Calls: Emergency services in the U.S. rely on area code identifiers in NANP numbers to locate you in case of an emergency. This isn't possible with VoIP, as call data is sent over Internet protocol (IP), although most modern VoIP services offer workarounds for this. When compared with the benefits, the disadvantages of VoIP seem minimal and easily avoidable. Every business, regardless of location, size or industry, can stand to benefit from VoIP technology.

Top 3 VoIP Phone Systems

There are many VoIP systems out there, as the technology keeps advancing and the market keeps expanding. Here are the top three VoIP phone systems to consider:


With more than 299 million users worldwide, Microsoft-owned Skype deserves an obligatory mention on this list. Besides its ultra-popular consumer application, Skype also offers highly competitive business VoIP services. Key Features - Free, Unlimited Skype-to-Skype Calls: All calls between two computers/mobile devices running Skype are free. Skype's popularity means many of your contacts might already be Skype users, saving you hundreds of dollars in call costs. - Low Mobile/Landline Calling Rates: Calling rates within the U.S., for instance, are as low as 1.2¢ per minute. Unlimited U.S. calls are available for as low as $6.99/month. - Skype Connect: Skype Connect enables you to make calls through your existing phone system. - Advanced Account Manager: Skype Manager, a web-based tool, gives you complete control over your Skype account. You can allocate credits and enable/disable features for different users from a central dashboard. - Additional Features: Click-to-call, access to million-plus Skype Wi-Fi hot spots and group video calls are included with the service. Custom numbers start at just $5.63/month. Price Prices vary from region to region. As mentioned above, unlimited mobile/landline calls within the U.S. are available for just $6.99/month. Unlimited international calls, on the other hand, are just $13.99/month. There are no setup costs: you only need to download the Skype client to start making calls. Along with the long list of features, this makes Skype a strong contender for business users.


Unlike Skype, which is mostly a software-only service, PhonePower's VoIP service works with your existing telephone instruments. You can also use the company's software client and iPhone application to make calls. Key Features - Free Second Line: You can hook up two phones to the same VoIP adapter free of cost. - Voicemail Features: Every PhonePower subscription comes with free voicemail. You can browse through your voicemail through your online account dashboard. A transcribed copy of each voicemail is sent to your email as well. - Enhanced Emergency Calls: Calling 911 through your PhonePower phone automatically sends your name, address and current location to emergency services. - Online Account Manager: The web-based account management tool gives you access to call logs, voicemail messages and Click2Call from an easy-to-use interface. You can also add additional lines with their separate phone numbers for a small fee each month. Price PhonePower's home and small business plans start at $14.95/month for a 24-term lease period. This includes unlimited calls within the U.S. and Canada and international calling rates as low as 1.1¢ per minute. The initial setup fee is $14.95/month, and the service also levies a $99 cancellation charge for cancelling before the contract expires. PhonePower works more like the landline phones you are already used to; the learning curve, therefore, is much flatter compared to a service like Skype. Along with the low costs, this makes PhonePower a worthy replacement for your existing legacy telephone system.


Like PhonePower, Vonage connects to your existing telephone instruments through its VonageBox adapter. An established, reputable VoIP service, Vonage offers low prices and a laundry list of features for business users. Key Features - Voicemail: Vonage Voicemail Plus gives you access to all your voicemail messages from your computer, mobile phone or landline phone. - Call Forwarding: Vonage SimulRing forwards your calls to up to five different numbers. - Call transfer, call waiting, 3-way calling and call return are all standard features. - Bandwidth Saver: This proprietary technology enables you to save bandwidth and optimize your Internet connection for voice calling. - Vonage Extensions: This feature allows you to make calls from your mobile phone at the same rates as your existing home connection. Price Vonage home plans start at just $9.99/month with unlimited calls within the U.S. and Canada. Unlimited small business plans start at $49.99/month with a dedicated fax line included. Depending on your plan, you might also need to pay a setup fee. Vonage is an easy to use service for home and small business users. Its international calling rates tend to be a little high, but the cheap monthly plans and strong customer service make it a solid VoIP service for your business.

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