Until recently, all businesses were using traditional analog landline telephone systems. These systems were connected to the Public Switched Telephone Network and ran on the telephone company's copper wiring.
While these phone systems were extremely reliable, they required expensive equipment that was hard to install and maintain. Besides the copper wiring that had to be run through the business, landline systems also required a costly private branch exchange (PBX). The PBX is what was used to switch calls between the business and the telephone network. It's also what was needed to offer various calling features, such as voicemail, conference calling and automated attendants.
Today, traditional analog landline systems are becoming obsolete. Telephone companies aren't developing new analog systems and are no longer providing updates to the systems they used to offer. Finding IT professionals with the skills to keep these systems up and running is also increasingly difficult. Telephone companies have largely shifted their attention to VoIP technology.
Nearly all new business phone systems use VoIP. Instead of running on copper wiring like landline systems did, VoIP systems run on an internet connection. It's the same connection most businesses already use to get online. Tapping into an existing data connection saves you the trouble and expense of installing and maintaining phone lines throughout your offices or stores.
In addition, VoIP systems work in conjunction with cheaper and less bulky PBX equipment. This allows small businesses to access a host of calling features they previously couldn't afford, like automated attendants, conference calling and call recording. VoIP systems also easily integrate with computers, which lets employees make calls from their machines and have voicemails sent directly to their email, among other things. It can also be beneficial for businesses using customer relationship management (CRM) programs.
When VoIP was first introduced, there was much concern over the call quality. Many felt calls sounded staticky, and others had problems with calls dropping off. As the technology has improved, so has the quality of the calls. In fact, the connection quality difference between VoIP and landline is now so insignificant that most users have no idea when they are using VoIP and when they are on a landline connection.
The only businesses that can't take advantage of VoIP phone systems are those in communities without access to high-speed internet service or with unreliable internet service.
Unlike landline phone systems, which require all equipment to be housed and maintained inside the business, VoIP systems offer the option of hosting everything on the premises or in the cloud.
Similar to landline systems, on-premises VoIP systems have all the PBX equipment installed and housed on location in each business. With this option, you are in total control of your system. You aren't relying on anyone else to make sure it is running, and you can configure it to your exact specifications. However, since it is located at your place of business, your IT staff is responsible for all repairs or upgrades. On-premises systems also need to be professionally installed.
Another difference is security. On-premises systems don't have the same security concerns as cloud-hosted solutions, since all the data is stored within your business. Experts say businesses with serious concerns about keeping their calls and phone system data private are best served by on-premises systems. This option allows businesses to configure their firewalls exactly as desired to protect the phone system from any type of intrusion.
Other businesses well-suited for on-premises phone systems are large corporations that can afford the upfront costs, and businesses that want a system they can customize.
Cloud-hosted phone systems are becoming popular among small businesses. With this type of phone system, all the equipment is housed and maintained in the cloud by your phone system provider, which handles all maintenance and upgrades. The only equipment the business needs is the phones themselves.
Most cloud systems are essentially plug-and-play. Once you activate your service and receive your phones, they can be plugged into any Ethernet port, and calls are ready to be made and received.
The downside to cloud-hosted solutions is that businesses are at the mercy of the phone system provider to keep their service up and running. To ensure this happens, most of the top vendors have several redundancies built into their systems. This includes having multiple data centers so that if one goes down, the data can be transferred seamlessly to another to ensure the continuation of service.
Cloud-hosted systems are ideal for small businesses because they have few upfront costs and consistent monthly charges that can fit easily into a budget, and don't require trained IT experts to keep them up and running.