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The Incredible Disappearing PBX
How cloud hosted VoIP services take the place of your old in-house PBX phone system

By: John Shepler

Medium and large companies are used to managing their own phone systems. It seems to go without saying that if you want to be able to make inter-office calls, you need to have a PBX or at least Key telephone system in-house. Hosted voice service says quite the opposite. With hosted voice, you only need to provide the phones. Sometimes even those are provided for you.

Voice in the Cloud
Hosted Voice, also known as Hosted VoIP or Hosted PBX, is a cloud service. The PBX phone system hasn’t magically disappeared. It’s simply been relocated from your building to the service provider’s.

Everything Old is New?
If this sounds vaguely familiar, it’s because this is the model most companies used about half a century ago. What? You don’t recognize it? Back in the day, we all got our phones from Ma Bell and let her do the switching.

The Centralized Switching Model
Centralized switching at the local phone company is what built the Bell system. That worked perfectly for residential users and small businesses. Larger companies wanted control of their calling and installed switchboards with operators.Later, when technology enabled it, they tore out the switchboards and installed automatic switching equipment. The phone company had an answer to the PBX. It’s called Centrex. They move the switching back to their “cloud” and handle internal as well as external calls.

Why POTS is Old School
There are a number of advantages to dumping the switched circuit model of Plain Old Telephone Service (POTS) and moving toward what is known as network voice. What’s changed over the last few decades is that every company now has a computer network. What they may not recognize is that the telephone system is also a network. It’s just a different and very specialized network. Why have two networks when you can combine them and maintain just one network?

SIP is the New POTS
It no longer makes sense to add modems to computers so they can run on the telephone network. Computer networks are so large and so fast that they have left voice lines in the dust. Instead, it makes more sense to modify telephones so that they can run on the computer networks. Telephones that have this capability are called IP phones or SIP phones. SIP is the switching system used by VoIP telephone systems.

What is IP?
The term VoIP or Voice over IP describes the nature of this system. You are transporting telephone calls, or voice, over IP Networks. Your LAN is an IP network. The IP stands for Internet Protocol, regardless of whether it is connected to the actual Internet or not.

How Hosted Voice Works
Your PBX and analog telephones are hauled away for salvage or resale. In their place you get brand new IP phones that you unpack and plug into your network just like you would a computer or a printer. Then you pick up the phone to place a call and...

Oh, wait. You can’t make a call until you get a phone line to your network. That line is called a SIP Trunk. The SIP Trunk is what connects you to your service provider. At your end is a voice gateway installed by the service provider. At the far end is their very large telephone switching system, called a soft switch, and all the outside phone trunks that connect it to the public telephone system.

Beware of the Internet
There’s a caveat here. Some smaller businesses try to cheap out and use the Internet to provide the connection to their phone service provider. That’s a pretty dicey arrangement because the Internet doesn’t offer any QoS or Quality of Service mechanisms. Your voice packets and the neighborhood kid’s pirated movie packets are all jammed together with no priority for anyone. If traffic backs up, it’s just like the tollway at rush hour. Everything creeps along and your phone conversations get choppy. They might even drop completely.

SIP Trunking as the New Phone Line
The best practice is to get your SIP Trunk from the same company that is providing your hosted voice service. They will give you a line that serves up telephone calls and the Internet without any interference between the two. As a single provider, they are responsible for both the line and the phone service. They’ll manage this arrangement to make sure both work optimally.

Look For Considerable Cost Savings
Regardless of the size of your business, it is well worth your while to investigate the features and cost savings from hosted voice solutions. Savings can be as high as 50% and you may be able to include your mobile phones as well as your office phones.

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