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How Hosted VoIP Works

Updated on July 18, 2013

Types of VoIP Service

A VoIP application is just like e-mail in several ways. A company deciding to migrate its telecommunications to the Internet can choose a variety of models. For example, it can build out its own VoIP infrastructure by purchasing and maintaining VoIP servers. This is similar to how they run their own in-house e-mail services. It gives them complete control over the features and security. Unlike e-mail however, VoIP is significantly more complicated. It requires much more powerful hardware, more things can go wrong, and hiring and retaining the best talent to keep this system humming smoothly can be challenging. This is because VoIP is a real-time protocol. A large number of factors need to be taken into consideration such as audio codecs, working around NAT firewalls etc.

The other option for businesses is to outsource all of this work to a third-party provider. This "SIP service provider" will have their own infrastructure in place and will service several clients at the same time. From the point of view of an organization, all they need is Internet connectivity and IP enabled devices. If they want, they can even convert their existing landlines to Internet-based ones using simple ATA adapters. For an organization who knows nothing of the technical implementations of VoIP, this kind of model is a godsend.

Hosted PBX Services
Hosted PBX Services | Source

Benefits of Hosted PBX Services

Large corporations like to have everything under their control. They can afford to build out data centers of their own to house servers with their precious information. Needless to say this requires a lot of capital expenditure as well as a significant ongoing expense. But it doesn't end there. They also need the expertise and manpower to consistently monitor the status of their VoIP services, patch it we needed, and upgrade the hardware as the demand grows. Small and medium-sized businesses simply cannot afford to do all this. Neither do they have the expertise. For such entities, hosted PBX calling is an ideal solution.

The good news is that there are literally hundreds of SIP VoIP service providers in the market today. While building out a solid VoIP infrastructure isn't trivial, it's far easier than creating a telecom company which explains the lack of competition in the latter. With today's cloud-based resources, anyone with the proper technical knowledge can create powerful Internet-based applications on their own. This is especially useful for start up companies that have neither the time nor the resources to purchase anything beyond their laptops and the tools necessary for conducting their business.

In the world of venture capitalists, hosted PBX services are extremely popular because they can be set up and torn down without any preamble. This combined with the low costs and abundant features makes third-party VoIP services irresistible.


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    • jabelufiroz profile image

      Firoz 4 years ago from India

      Useful information on Hosted VoIP. Voted up.