Combining Voice and Data Networks

By Tara Swords

IP-PBX systems can help cut your telecommunication costs while making your small or mid-size business more productive.

New couplings of traditional voice networks over more modern data connections have given small and mid-size businesses more choice when investigating telecommunications systems. If you're just setting up your business or you’re wondering if there’s a better way of getting phone service for less, you should take a look at marrying voice over Internet protocol (VoIP) with an Internet protocol public branch exchange (IP-PBX) system.

IP-PBX comes in many forms

A traditional PBX system is basically a large box that businesses purchase and place in the datacenter. A PBX switches internal calls and enables internal users to place calls to the outside world via the traditional public switched telephone network (PSTN). An IP-PBX system is different because it relies on your data network -- the very same network you use to access the Internet -- to let you place phone calls.

There are actually several technologies that vendors bill as IP-PBX systems. Nora Freedman, research analyst in enterprise networks at IDC, the Framingham, Mass. research firm, says vendors are crashing the market with many delivery methods for IP-PBX to try to figure out what small and mid-size businesses will find most attractive. For example, you can purchase a hardware-based IP-PBX or a software-based IP-PBX. You can opt to pay a third-party provider for IP-PBX service -- or even purchase hardware and let a third party manage it for you. Finally, you can conduct all of your calls purely over the data network or select a hybrid system that uses the network in house, and then translates voice data so it can travel over the PSTN when you make external calls.

Cut costs and boost employee productivity

Regardless of which IP-PBX solution you choose, the benefits are similar. You can provide users access to IP telephony, the Internet, and the PSTN through one cable per person. And you can expand the ease of three- or four-digit extension dialing beyond the main office. So if you’re in the Connecticut office and you want to call someone in the Pennsylvania office, you simply dial the extension -- and avoid paying long-distance charges.

“This allows businesses to have, on the exterior, the appearance of being a consolidated whole while they’re actually geographically distributed,” Freedman says.

Better yet, that one extension can follow you wherever you go, depending on the IP-PBX solution you choose. When Delta Resources, a small services and consulting company based in Arlington, Va., outgrew its four-line telephone, the company began researching options.

Keegan Mills, technology director at Delta Resources, selected a IP-PBX system, which sends voice data over the company’s T-1 LAN connection. This setup alleviates the need to have a receptionist answering the phone at each office; one receptionist in one office can answer the phone and transfer calls to any employee, no matter where they are.

“I don’t have a physical phone anymore,” Mills says. “I have a piece of software that runs on my laptop and a Bluetooth headset. So whenever I connect to the Internet, I can attach my laptop to the local network and turn my phone on. If I’m connected to the virtual private network, I’m extension 118 no matter where I am.” As a result, employees are more productive in and out of the office, and the company saves money on phone costs.

IP-PBX may be cheaper

IP-PBX systems, over time, may be much cheaper than traditional PBX systems. They make the voice network easier to scale and simplify inter-office moves: Just plug an IP handset into its new location, and the extension will follow it.

For Mills, a traditional PBX was never even an option. “It’s a no-brainer,” he says. “If you don’t have a PBX, don’t even look at a traditional PBX anymore. It doesn’t make sense.”

Market research firm Dell’Oro Group recently noted that the IP-PBX market revenues rose 10 percent in the third quarter of 2006 and will likely surpass revenues of traditional PBXs in 2007. But because the IP-PBX market is still relatively young and offerings are so broad, Freedman says small business owners shouldn’t be afraid to explore their options.

“Don’t look at just on-premise equipment versus hosted equipment because sometimes you can leverage your existing provider account to get a better deal by bundling it with an extra service” if your provider also offers VoIP, Freedman says. “Cast your net wide. The vendors are so eager to attract the [small business] end of the market, so they’ll be creative.”