Business VoIP Types

For larger businesses, business VoIP provides a tremendous cost advantage; for smaller businesses, the advantage is that high-end features become available and affordable. Call quality is equivalent to standard phone service, maintenance costs are low, and long distance is much more affordable. A Synergy Research Group report notes that VoIP is the fastest growing segment in Enterprise Voice, with nearly 70 percent of the total telephony market being IP telephony. If you haven’t gotten in on that bandwagon, then it’s time. With the technological improvements in VoIP, higher and more affordable broadband service, and other advantages, there’s no reason to put it off any longer. The only decision is what type of service to install.

The biggest decision is whether to go with a hosted or on-premises VoIP system. An on-premises VoIP system, like a conventional VoIP system, requires dedicated equipment, while the hosted option relies on a third party, off-site provider. Both approaches have their own relative advantages, depending on the user’s situation.

Hosted VoIP

Hosted VoIP is a popular approach and very affordable, since it does not require any in-house equipment to purchase or maintain. Without the capital expenditure requirement, the hosted option is an excellent one for companies on a tight budget, or for smaller startups that want to have a high level of features without the expense.

A hosted service typically is available on a monthly subscription. The third party provider maintains the IP PBX at their own facility, offering much more flexibility in service and ease of expansion. The hosted option does not require the business to purchase specialized IP phones.

A big advantage for smaller businesses is that the hosted option allows for more features. In many cases, were a small business to purchase their own on-premises IP PBX, the choice would be for a smaller, less expensive one with fewer features. The hosted option allows for a greater selection of features that would normally be available only with the higher-end models, but with a low monthly tariff.

On-Premises VoIP

On-premises VoIP requires the installation of an IP PBX on site, and this option is used normally by companies that have the in-house staff qualified to maintain it. This approach does require up-front capital expenditures as well as more manpower, but is advantageous in some circumstances. Long-distance fees will be dramatically less expensive. While long-distance is already cheap with hosted options, it’s even less when you run your own IP PBX. In addition, the on-premises option gives companies more control over their telephony environments, and may be especially useful in environments where companies are heavy users of high-end services such as videoconferencing.

Hybrid systems

A hybrid VoIP system combines both traditional and VoIP phone systems, with an automatic decision engine that transfers long distance calls to VoIP whenever the call will be cheaper. A hybrid system may be effective for a large company that has already made a substantial investment in a traditional system that has not yet been fully depreciated. The hybrid approach allows the company to still take advantage of the legacy system, while gaining the cost advantage of VoIP at the same time. In most cases, a hybrid approach is not long-term, but a step towards eventual conversion to a dedicated VoIP system.


The time has come for business VoIP. The only question is one of timing. A new company will derive advantages from deploying VoIP right away, while an established company may want to consider the timing of a migration to preserve the existing investment in capital equipment.

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