Originally published on the Shirlaws Business Coaching Blog, 2007-2010.

VoIP

Why?

Cost efficient, close to free telephony.

I’ve heard of that, but exactly what is it?

Historically, telephones have transferred your voice, converted and interpreted by receivers, through increasingly efficient materials from copper lines to fibre optics. VoIP stands for ‘Voice over Internet Protocol’, and (without exploring the history of TCP/IP), this basically means that voice is converted into data packets and sent over the internet – cheaply.

Even more excitingly, compared to pictures of babies or long-winded blog posts, voice data doesn’t take up much space at all.

OK, and how can I make this work for my Business?

VoIP is often thought of as ‘free’, largely because the most popular providers like Skype do not charge for calls between users. Done entirely over the net, thereby avoiding the infrastructure costs that scare big telco investors, your only expense is the minimal data on your broadband plan. Most now offer low cost calls to traditional telephones, avoiding part of the cost and passing on the savings.

For businesses, however, telephones mean more than saving a few (hundred) dollars each month. Nice as that is, reliability of infrastructure is key – you’ve almost certainly experienced internet or email downtime, hours that wouldn’t be tolerated with your phone lines.

For this reason, broader and cheaper providers aren’t well suited to business application, or at best are an ancillary option (helping, but therefore not saving on infrastructure like expensive line rentals). Skype demonstrated this late last year when the VoIP super provider, owned by eBay, was shut down for more than 36 hours trying to find an error ultimately linked to Microsoft’s ‘Patch Tuesday’.

This reliability can be rectified, but expect the required infrastructure to reduce (though still make worthwhile) cost benefits.

Sounds great – what else do I need to know?

Look for more players here exploring ‘intergration’, with even Microsoft seeking to leverage their ubiquitous software presence into the telephony space.

If you want to explore more, ask about ‘continuity of service’ (ie, will it fall over on you?) and ‘performance guarantees’ (ie, will they pay if it does fall over on you?). Transactional salesmen pushing “price, price, price” won’t bother you much after that.