How is Hosted VoIP for Business Different?

VoIP technology has progressed by leaps and bounds over the last couple of decades. While it share similarities with the PSTN, the underlying technology is very different. End-users may not know the difference but there is a lot going on behind the scenes.

VoIP services can be categorized in multiple ways. Consumer versus enterprise-focused services and hosted VoIP versus SIP trunking are just a couple of examples. But what exactly makes these services different from one another?

How Is VoIP Different from the PSTN?

The traditional PSTN network is based on analog switches connected by copper wires across the globe. When you make a call from your landline, switches are opened from your location to the recipient. These switches have to be open for as long as you keep talking. This is one of the reasons why phone calls – especially long-distance ones – are so expensive.

By comparison, VoIP is able to offer inexpensive or even free calls because of the technology. Instead of using a dedicated, custom-built network, VoIP routes audio calls over the Internet. Since you are already paying for your Internet connection, you don’t have to pay anything extra for a call that does not travel over the PSTN. However, international calls are more likely to travel over a portion of the analog network. Thus long-distance calls are much less expensive over VoIP than they would be otherwise.

In spite of these and other differences, the user experience does not change much between the two. You still pick up the phone and dial a number to call someone. SIP-enabled phones (required for VoIP) resemble traditional desk phones more often than not.

How Is Hosted VoIP Different from SIP Trunking?

From a business perspective, organizations can choose between hosted VoIP services and deploying their own on-premise systems using SIP trunking. There are a number of differences between the two in terms of cost, control, maintenance, support, and ease of use.

Hosted VoIP tends to be less expensive than implementing SIP trunks. Even a midsize organization can get started with hosted VoIP services in a few hours or days. You can check out different providers and use their free trials to see the service fits your business or not. As long as you have a robust network infrastructure, a fast Internet connection, and SIP endpoints, you can use hosted VoIP. There are no annual contracts, long-term maintenance/ service contracts in the hosted VoIP space.

SIP trunking, on the other hand, has its own set of advantages. Businesses can customize the premise-based system for their own requirements. If your needs change further down the line, you don’t have to wait for the provider to catch up. SIP trunking solutions offer more control since you’re not at the mercy of a third-party when it comes to software updates, security patches, and other maintenance tasks. In addition, SIP trunking systems will cost you much less per call than using hosted services. Over the long-term, these systems pay for themselves many times over. Larger organizations with high call volume tend to prefer SIP trunks over hosted services for this precise reason.

The Difference between Hosted VoIP for Business Versus Consumers

Hosted VoIP services are different from the PSTN and SIP trunking in terms of technology, specifications, and maintenance. The difference between consumer vs. business-focused services, on the other hand, has more to do with features and cost. Both versions are similar in terms of infrastructure required (SIP-enabled phones/computers) and the amount of maintenance (zero) needed on the part of the user.

However, there are other important distinctions between the two. One is that providers in each category target a different audience – which means that the features they offer are customized to the needs of a particular group. For instance, home users rarely need automatic voicemail transcription while business users have come to depend on it to deal with large voicemail volume. The same applies to other features such as auto attendant, ACD queues, presence information etc. Hence, these features are generally not available or are too expensive for consumers. But they often offered by default for business users.

This feature disparity also reflects in the price. Consumer VoIP services tend to be less expensive than their business counterparts. It is easy to see why. Most home users don’t need advanced features and would hesitate to pay for them. This means that is not cost-effective for the service vendor to offer a feature that only a few customers want. But a larger proportion of business users would be willing to pay for the same services. Hence they’re included in most subscription plans aimed at businesses, with a higher sticker price.