What Is VoIP, and Is It Right for Your Business?
VoIP, voice over internet protocol, means your telephone calls travel over the internet as data instead of over dedicated copper lines. In 2012, when this article was first written, it was a money-saving alternative. In 2026 it is simply how business telephony works: the copper network is being retired, the traditional phone company charges more every year for what remains of it, and every current phone system, hosted or on premises, is VoIP underneath. We have folded three older articles into this one, on VoIP basics, IP telephony and softphones versus desk phones. It covers what VoIP is, the three ways a business can run it, what it costs, what it needs from your network, and the questions to settle before you switch.
How it works
A VoIP phone or app converts your voice to data, sends it over your internet connection to the provider’s system, and the provider connects the call to the ordinary phone network or to another VoIP user. The signalling protocol is usually SIP, which is why you will see “SIP trunks” and “SIP phones” on quotes. The phone system itself, the part that provides extensions, voicemail, auto attendants and call routing, is a piece of software called a PBX, and where that software runs is the main decision.
Three ways to run a business phone system
| Option | What it is | Fits when |
|---|---|---|
| Hosted (cloud) phone system | The PBX runs in the provider’s cloud; you pay per user per month and plug in phones or use apps; the provider handles updates and reliability | Almost every business of 2 to 200 people; multiple locations; remote staff |
| On-premises IP PBX | The PBX runs on a server or appliance in your office (open-source platforms such as Asterisk and FreePBX, or commercial ones) connected to the internet through SIP trunks | Businesses with unusual call-flow needs, a large number of handsets in one building, or an existing investment worth keeping |
| Microsoft Teams Phone | Teams becomes the phone system, with a Microsoft calling plan or a carrier connected through Operator Connect or Direct Routing | Businesses already living in Teams that want one app for chat, meetings and calls |
Most of our clients are on hosted systems, a growing share use Teams Phone, and a few keep an on-premises PBX because it does something specific well; our guide to Asterisk and FreePBX support covers that case. Our phone systems page covers what we install and support.
What you get that copper never gave you
- An auto attendant, call queues and ring groups, so calls reach the right person without a receptionist transferring them.
- Voicemail delivered to email as audio and transcript.
- Mobile and desktop apps, so the office number rings wherever the person is and their mobile number stays private.
- Business texting from the main number, call recording, and reporting on call volumes and answer times.
- Integration with the CRM or practice-management system, so the caller’s record opens when the phone rings.
- Numbers that follow the business: move offices, add a location or work from home with no rewiring.
- Emergency calling that complies with Kari’s Law and RAY BAUM’s Act, which require direct 911 dialling and a dispatchable location from every multi-line phone system.
What it costs
Hosted systems are priced per user per month, typically in the range of $15 to $35 depending on features, with calling included. Desk phones run roughly $80 to $250 each and last many years; headsets are cheaper and many people prefer them. Teams Phone adds a per-user licence and a calling plan on top of Microsoft 365. On-premises systems trade the monthly fee for hardware, licences and maintenance. Against all of that, the copper lines and the old PBX maintenance contract go away, and long-distance charges disappear. Our phone system quote tool gives a monthly figure for your number of users and phones in about a minute.
What it needs from your network
This is where VoIP projects succeed or fail. A call needs roughly 100 kilobits per second in each direction, which is nothing, but it needs it consistently: latency and jitter, not bandwidth, are what make calls choppy. A business-grade internet connection, a firewall with quality-of-service rules that prioritise voice, switches that supply power over Ethernet to desk phones, and a separate network segment for the phones are the standard requirements. A cellular backup connection covers an internet outage, and a UPS on the switch keeps the phones alive through a power blip. If your office Wi-Fi is the weak point, our article on securing your business wireless network also covers the coverage side. We test the network before proposing a phone system, because fixing it afterwards is how VoIP gets its undeserved reputation.
Desk phones, softphones and headsets
The old debate about trading in the desk phone has settled into a mix. Reception, conference rooms, shop floors and people who dislike headsets keep desk phones. Everyone else tends to use the softphone app on their computer with a good headset, plus the mobile app. The system does not care; a user can have all three ringing at once. Buy fewer desk phones than you think, and better headsets.
The things that get forgotten
Every office has devices that quietly depend on the copper lines: the fax machine, the alarm panel, the elevator phone, the door intercom, the credit-card terminal, the postage meter. Fax moves to an online service. Alarm and elevator lines usually need a cellular communicator, arranged with the alarm company before the copper is cut. Terminals and meters move to the network. Inventory them all first; this is the step that separates a smooth switch from a Monday without an alarm system.
Security
A phone system is a system, and it needs the same care as email: strong passwords and multi-factor authentication on the admin portal, SIP passwords that are not the extension number, international calling restricted to the countries you actually call (toll fraud is a real and expensive attack), firmware updates on the phones, and the phone network separated from the computers. Hosted providers handle much of this; on-premises systems need someone responsible for it.
How a switch works
- Inventory users, numbers, call flows, analog devices and integrations.
- Test the internet connection and network; fix what needs fixing.
- Choose the system and configure the call flows, auto attendant and voicemail.
- Deploy phones and apps alongside the old system, and train people for an hour.
- Port the numbers, which takes one to three weeks; the old service stays live until the port completes.
- Cut over, watch the first week, then cancel the copper.
Under a managed IT plan the phone system is part of what we support, from the network it runs on to the auto attendant recording. Whether you are replacing a system your carrier is retiring or leaving a provider that has stopped answering, the quote tool is the place to start.
Free tools from OAC Technology
- Phone system quote tool: a monthly figure for a hosted phone system
- Managed services pricing calculator: a monthly figure for managed IT, in about a minute
- IT glossary: the terms in this article, explained plainly
Common questions
Is VoIP reliable enough for a business?
Yes, provided the internet connection and network are up to it. A modern hosted system on a business-grade connection with quality-of-service settings is more reliable than the copper lines it replaces, which carriers are now retiring. Reliability problems with VoIP are almost always network problems.
What happens if the internet goes down?
Calls to your numbers still reach the provider, who forwards them to mobile phones or voicemail according to rules you set, and the mobile app keeps working on cellular data. Businesses that cannot tolerate any gap add a cellular backup connection to the firewall.
Can we keep our phone numbers?
Yes. Numbers are ported from the old carrier to the new provider, a process that takes one to three weeks. The old service stays live until the port completes, so nothing is lost in between.
Do we need new phones?
Not necessarily. Many people prefer a headset and the softphone app on their computer or mobile, and a mixed office is common. Desk phones cost roughly $80 to $250 each and are worth it for reception, shared areas and anyone who dislikes wearing a headset.
Is Microsoft Teams Phone good enough?
For many offices, yes. It turns Teams into the phone system with a calling plan or a carrier connection, and it suits businesses already living in Teams. Dedicated hosted systems still lead on call queues, reception consoles, analog devices and reporting; we run both and will say which fits.
Do we still need a fax line or analog lines?
Fax moves to an online fax service or an adapter; alarm panels, elevators and door phones often need a cellular communicator or an analog adapter instead of the copper line they were built for. Inventory these before the copper is disconnected, because they are the things that get forgotten.
Talk to us
If your carrier has told you the copper is going away, or your current phone system has stopped keeping up, we will assess your network and quote a system with the numbers you already have. Call 952-548-5558 or contact us; the first conversation is free and there is no long-term contract.
