How Does VoIP Work And Why Should My Business Use It?

November 19, 2019

If you're responsible for communication at your company, there's a good chance you've heard of Voice over Internet Protocol (VoIP). For the better part of the last decade, businesses of all sizes have been making the switch to VoIP phone systems, whether it's because of improved reliability or just to save money on their phone bill.

If you're thinking about moving your phone system to the cloud, you've probably wondered what the difference is between VoIP and a traditional landline. On the user end, there isn't much of a difference unless you want there to be (more on that in a bit).

The main difference that also creates VoIP's business advantages has to do with how phone service is delivered - once you're using a cloud system, your provider can program it to function how you want it to.

So how does VoIP work?

The key difference is in how your provider is bringing you dial tone.

In an "on-premise" environment, you're using traditional phone lines - your service provider runs copper wire through your building and plugs them into your phones.

With a VoIP system, you actually don't need phone lines at all. All voice communication is sent over your network in the form of data packets, similar to how email works.

This saves you some headaches right off the bat, because your VoIP provider handles both your phone system and service. When you make the switch, you no longer have to worry about paying multiple phone-related bills or calling two companies for support if something's not working. Your VoIP provider becomes your one-stop shop.

How it looks


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VoIP service starts in the cloud. Your actual "phone system" is stored in data centers, which rout voice traffic to your preferred endpoint over a network.

How does VoIP work for my business?

More flexibility

To put it in English - a VoIP system allows you to make and receive calls from your work number using whatever device you choose, no matter where you are.

If you work remotely a lot and want to set up a second phone at your home office, all you have to do is log into that phone on the days you're there. On the flip side, if you want to ditch the hardware completely, most VoIP providers offer an app that you can download to your phone/computer - when you're logged in, you can use your chosen device to make work calls.

In short, hosted VoIP helps to make sure you're always reachable, which means that you don't need to worry about communication when you're working remotely, traveling to meetings, or just grabbing lunch.

Improved reliability

If you're using a traditional on-premise phone system, you run the risk of losing communication if your business is impacted by inclement weather or a power outage. When your phone system goes down, existing and potential customers won't hear your auto-attendant or get through to reception - they'll likely just hear a busy signal or dial-tone.

One of the nice things about how VoIP works is that it makes your system more reliable. Because your actual system is stored in a data center, it's not impacted by the conditions at your office location - so even if your building is dealing with a storm, there are no outside lines to be impacted by it.

Cloud phone systems also give you options if you experience an outage. When your system recognizes that there's no power running to your phones, it'll automatically re-rout calls to your preferred destination, whether that's your cell phone or a different office.

Better cost control

For all the benefits that hosted VoIP offers, sometimes the decision to switch comes down to gaining more control over costs.

Cloud-based phone service is billed on a per-user basis, which means that you simply pay for the number of users they need. Companies that grow can simply add a user for each new employee they hire, and seasonal businesses can remove excess users from their phone bill once things settle down.

Service charges also include long-distance and standard business usage fees, which means that your phone bill stays consistent month-to-month. This allows you to communicate without worrying about unexpected fees, and makes it easier to budget as a result.

To Wrap-Up

If you've thought about switching to the cloud but aren't sure if its the right fit, hopefully this post has been helpful.

Because VoIP phone systems don't rely on physical phone lines, they offer your business more flexibility, improved reliability, and better cost control over time.

In our view, the major benefit of cloud systems is that they behave how you want them to. If you want the back-end benefits of VoIP (reliability, transparent pricing) without the additional functionality, your provider can install your system that way. On the flip side, if you want to take advantage of more advanced features like call analytics or the mobile app, you have the option to do so at any point during your contract.

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