Understanding Hosted VoIP

Mar 2016

Compared to traditional phone technology, the essential infrastructure and method of communicating are distinctly different with hosted VoIP


Why is it that in a world where technology is evolving at an ever-increasing rate, that most business today still rely on phone technology that has been around for generations?  Business phone service has for decades been delivered over the public switched telephone network (PSTN) via either an on-premise private branch exchange (PBX) with trunks connected back to the local telephone company or via plain old telephone service lines (POTS) – the same kind of thing you used for residential service until you realized that your mobile phone was sufficient for that.  With the on-premise PBX model, which has been the industry standard for companies of any meaningful size, all of the switching, routing, and call flow decisions happen within the PBX on-site at the customer.  Purchasing and maintaining the PBX is expensive, and when it goes down or a line is cut, the business is completely without service.


With hosted VoIP technology, the communications traffic is routed over the internet, as opposed to a legacy phone line, to the service provider’s platform in the cloud


Instead of a company’s voice traffic traveling over a local phone company’s network via the PSTN, that traffic is routed over broadband internet to the service provider’s switching infrastructure in the cloud.  For the communications service provider it is far more efficient to operate this cloud infrastructure as opposed to multiple premise-based PBXs at each customer location, and this results in lower costs to the customers themselves.  Beyond the cost savings, however, is the ability to enhance the feature set beyond mere telephony by moving to an all-IP transport network.  Things like video, chat, and web meetings all become possible within a single, integrated communications system.  Moreover, because cloud based phone systems operate in data centers with redundant components (like power and HVAC) a customer will still have access to their business communications platform is available anywhere, on any device, across all kinds of networks, which provides inherent business continuity advantages compared with traditional systems.

« Altus Adds Leading Contact Center as a Service Offering Business Phone System Buyers Guide: Five Key Questions »