At some point, every business makes a purchase decision about a phone system.  As one of the communications tools most critical to a successful business, which phone system to buy is one of the most important business decisions your business will make. These days, lots of small and medium businesses are trying to decide whether to move to VoIP. If they do want to move to VoIP, a lot of them are trying to decide whether it makes sense to put their phone system in The Cloud (with a hosted VoIP solution) or to keep it on-premise.

The question these days is: which VoIP solution is right for my business? Not always an easy question to answer. In some cases, the choices are very complicated, and this series of articles intends to help small and medium businesses make good decisions.

In my last two articles, I talked a bit about The Cloud and what it means for small and medium organization. This article continues a series that articles that advises small and medium businesses on what to host and what to keep on premise, and how IT managed services fits into the mix. I’ll be answering questions about whether to host a VoIP phone systems with its own small series of four articles, starting with some basic terms, and then moving through some discussions in terms of evaluate price and value. I’ll end with a summary of key buying criteria to help you make an informed decision.

What’s a PBX and what’s a PBX replacement?
My very first phone system was a Betamax waiting to happen. Some of you probably remember the Betamax (Sony’s competitor to VHS). It was the HD-DVD of the video cassette world. It was a technical marvel, technically superior to VHS in many ways, except the ways that customers seriously valued. From a technology standpoint, Betamax was a great technology. From the standpoint of general customers, it was an overpriced and under-featured solution to the problem of recording home movies.

As a technology, public branch exchange systems (PBXs) are similar. PBXs were a great technology in the 1970s. But in terms of today’s business communication needs, a PBX is fairly one-dimensional and not the broad communications solution most business need. The first corporate phone system I ever bought was manufactured by NEC. It was a traditional PBX, which sat in a closet. It was fairly expensive. It did provide consistent and reliable dial-tone to the desk phones in my office, but in terms of helping me and my team effectively respond to customers, helping to manage my email, faxes, cell phones, customer data, and so on, it didn’t do all that much.

Today, to keep it simple, “the PBX” is rapidly evolving from a particular kind of device to a term that describes a solution to the problem of business communication (with a focus on voice communication). Some vendors refer to their offerings as PBXs, some as soft-PBXs, some include their PBX capabilities within “unified communications”. Some refer t their offerings as PBX replacements. From an education standpoint, the product category is a big mess.

My current phone system is a VoIP soft-PBX with unified communications. That means instead of using regular phone lines, it uses the Internet, and instead of being a specialized computer that sits in a closet, it’s software that sits on a Microsoft Windows server in my server. How things have changed! They’re poised to change even more over the next decade.

“VoIP-enabled unified communications”: a lot of syllables for a lot of benefits
As complicated as choices have become, the news is good for customers. Businesses no longer have to wed themselves to hulking, closet-monster PBXs for 5-8 years, paying 10s to 100s of thousands of dollars just to get dial-tone to desk phones, locked into the same brands of phones and other peripherals. Prices for a phone system are rapidly decreasing and more and more offerings come with value added software (e.g., unified messaging, instant messaging, service creation, and a lot of other things I’ll be explaining in the articles in this series).

Suffice it to say, there are a number of different “PBX replacement” technologies. Some of them are network devices similar to routers. Some of them are purely software. Some of them are PBX systems with VoIP capabilities. Sometimes they’re called PBXs, IP-PBXs, SIP-PBXs depending on the specific offering. It all depends, and that’s part of the confusion when trying to make a purchase decision. The PBX replacement that FAR uses is called NetVanta Unified Communications Server (made by ADTRAN). It provides VoIP-enabled unified communications (you can learn more about NetVanta here).

Voice over Internet Protocol-enabled unified communications (VoIP-enabled UC) and the perhaps even more onerous “communications enabled business process” (CEBP) are a lot of complex syllables to describe basically three things:

• A phone system that uses the Internet and similar networks to make and take calls (the VoIP part); it makes network architecture a little simpler, provides a single point of management and it lowers costs on your phone bills.
• Productivity tools that help employees respond their customers by phone, fax, email, IM and other tools more quickly, more intelligently and more professionally (the unified communications part). UC helps small and medium organizations look bigger.
• Organizational productivity tools that tie communications systems into back-office databases to help business as a whole work more effectively with customers (e.g., imagine a package tracking system that allows you to enter your package PIN and get an update on its delivery over the phone – that’s CEBP).

Easy, right?

What businesses really need to know is that today, almost all business communications solutions, whether voice, fax or data, should be a part of your information technology plan (that includes email, fax, instant messaging, operator consoles, call-routing, etc.). It’s no longer necessary (or advantageous) for these to be separate purchase decisions. Now that you have some ideas on the diversity of offerings to replace your PBX and some of the key terms, I’ll be talking about how to prepare your business to be VoIP-ready. Watch this space!