Expert Advice on VoIP

Tuesday Aug 17th 2004 by Lauren Simonds

When it comes to VoIP, cool doesn't cut it. The only reason to make the switch is if the technology saves you money. An expert explains all.

Voice ver Internet Protocol (VoIP) is one of the fastest growing technologies around, and one that promises SMBs big savings on communications costs. But it turns out that VoIP can't bolster every company's bottom line. In fact, it takes guidance and solid advice from an expert to determine if VoIP is right for you.

Bryan Cohen, senior sales engineer at CDW, spends his days advising customers about whether buying a VoIP system makes sense and if so, what type of system suits their needs. We asked Cohen what SMB owners should know about VoIP. Here's what he had to say.

"The most important advice I can give is don't buy VoIP simply because it's cool," says Cohen. "You should only buy it if it saves you money."

•LAN-Based VoIP
Appropriate for intra-office calls and calling customers. It consists of either a basic IP telephone handset or computer-based softphone. "It eliminates service calls and fees to remove or add phones, and you don't need to pull wires just to relocate someone's desk."

•WAN-Based VoIP
Appropriate for companies with multiple offices in different calling areas. "Here's a hypothetical example: a company with offices in Chicago and Boston spends $5,000 a month just on calls between offices. VoIP can reduce that to $1,000. Now consider how much you spend on the monthly leasing fee for a standard PBX phone system."

"Depending on the calling features you choose, a VoIP system would run you about $2,000 a month. Add the $1,000 a month for your inter-office calls, and that's $3,000. That's a monthly savings of $2,000 compared to what you were spending on office phone calls alone. Remember though, it's important to have a VoIP consultant who's experienced in both data and phone networks walk you through all the options."

•VoIP-Based Phone Service
Appropriate for using hi-speed Internet access for phone calls. "These are fee-based services like Vonage."

According to Cohen, companies that make lots of calls between offices and also make calls to clients want a combination of WAN-based and VoIP-based phone service. "The largest savings comes from bypassing tolls in option two's inter-office scenario," says Cohen. "Most SMBs associate VoIP as making free long distance calls -- option three -- for one low fee."

The Fab Five
"When I consult with a small business," he says, "I explain that there are five initial conditions the company needs to meet in order to run a successful VoIP System."

1. A Quality of Service (QoS) Network
In order for VoIP to work, the switches and routers in your company's network need to support the QoS standard, also known as 802.1P/Q.

"When it comes to sending e-mail, you won't notice if an e-mail arrives two milliseconds late. But when it comes to voice data delivered over the Internet, you'll certainly notice if someone says the word "cat" but the letter 'a' arrives before the letter 'c' and you hear 'act.'"

The QoS standard handles the various aspects of the network traffic. It makes sure that words arrive in the right order and that voice takes priority over data — essential since you don't want your conversation interrupted so an e-mail can be delivered.

"The data networking switches that most SMBs have on their networks don't support QoS. An SMB with 20 PCs typically has one 24-port switch, so the cost of buying a new switch that supports QoS is minimal — you'll still save a significant amount of money every month."

However, a company with 400 PCs might be a different story. "You need to consider how much it will cost to replace the switches and routers. Will there be any savings compared to what you spend on phone calls? Will you save enough in the long run to make the investment worthwhile?"

"That's a classic example of when you wouldn't want VOIP. If you can't save money — if there's no meaningful benefit — don't do it."

2. Network Redundancy
Data networks tend to crash every now and then — it's a fact of tech life. And it's tough enough to run a business when you can't access your e-mail, let alone losing your phone service, too.

"When you lose your network in the Chicago/Boston office scenario, you can't make calls or send e-mail. In a single-office scenario, network switches are like holiday lights — if one goes, they all go."

"You absolutely need systems in place that will get your network back online and running if you want to maintain your phone service."

3. Additional Training
VOIP systems differ significantly from the traditional PBX phone systems that most companies have had for years. For example, you manage a PBX through a telephone set or terminal. With VoIP, you use a GUI interface on a PC. It's not likely that anyone in your office will have experience programming a VoIP system. You, or one of your employees — need to become familiar with maintaining a QoS service.

4. IT Support
If you're lucky enough to have an IT staff, you'll need someone who can manage both a VoIP and data network — you can 't just call your local baby Bell to come out and make a repair.

"If, like most SMBs, you don't have an IT staff, you'll need a reputable company to service the systems — i.e., outsourcing. Most likely, the vendor you buy the VoIP service and equipment from offers that service. CDW offers services nationwide, with pricing based on the complexity of the system."

5. Flexible Downtime
"Consider the type of business you run. If your phone system is mission-critical to your business, you need as close to 100 percent uptime as possible. Since no network provider can guarantee 100 percent 24/7 network uptime, you're better off with the reliability of a digital PBX system."

So Why Choose VoIP?
"Essentially, VoIP is a compromise of features and cost versus reliability. Many SMBs can reap tremendous savings even with the costs associated with steps one through five." You realize savings in:

  • Long distance calls to clients
  • Long distance calls between offices
  • Lower infrastructure costs (depending on the phone options you choose)

"For example, if you need to rewire phones because you're moving or adding desks, that MAC (Move-Add-Change) service call typically runs $300 an hour."

Finding the Right Vendor
Honesty isn't just the best business policy; it's the most important quality you can find in a vendor. In a given day, Cohen tells 50 percent of his customers that their companies aren't good candidates for VoIP.

Here are four other tips Cohen says will help you find a good vendor.

  • They should have a solid knowledge of both voice and data networks. This is easier said than done.
  • They should offer you options. Look for a vendor that offers multiple brands of phone systems and can help you find the right product for your business.
  • They should perform an electronic network assessment on your company's network — before you buy. The assessment assures that the network supports QoS and tells you what, if any, hardware changes you need to make. It also simulates VoIP traffic on your network and shows what effect VoIP will have on your other network functions.
  • They should have staying power. You want an experienced and reputable vendor with a history of longevity — no fly-by-night outfits that could disappear without a trace.

Lauren Simonds is the managing editor of SmallBusinessComputing.com

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