What is VoIP All About? The Complete Guide

You’ve likely come across many VoIP options in your search for a new phone system. VoIP phone solutions are popular for businesses and individuals alike, as they often provide more flexibility and reduced costs compared to traditional phones. 

Nextiva is perhaps the best VoIP option for businesses of all sizes to consider. It delivers exceptional call quality and reliability, plus an easy path to set up and implement, whether your workplace is a traditional office, remote, or hybrid. Admins can manage this platform without any technical expertise, which is great for those workplaces new to using VoIP communication technology. 

What Are the Best Tools for VoIP Calling?

Below you’ll find our Golden Eggs—our top-rated VoIP business phone solutions. We recommend these platforms with confidence because they’ve stood up well under scrutiny during our research of what real businesses want from VoIP phone systems.

Nextiva is a relatively affordable VoIP business phone system that shines above competitors with its unmatched call quality and reliability. Get started with Nextiva by scheduling a demo. 

RingCentral is an ideal VoIP solution for larger organizations and call centers, as it offers near-limitless scalability and robust international calling capabilities. Start on RingCentral with their 14-day free trial.

Ooma makes it easy for small businesses to leverage VoIP communications in an environment with traditional desk phones. Get set up in less than an hour with Ooma.

More Top VoIP Providers and Phone Services

In addition to the tools listed above, our team here at Crazy Egg has conducted extensive research on other solutions in the VoIP communications category. Check out detailed reviews on 18 different providers divided into six of the most common use cases for needing these platforms in our full post on the best VoIP providers and phone services. 

How Do I Get Started with Nextiva?

One of the best parts of using Nextiva for your business phone system is that it’s ultra-easy to deploy. That’s why more than 100,000 businesses rely on Nextiva for their business communications. 

To get started yourself, just head over to Nextiva’s website and either click Get started at the top-right of the homepage to set up a sales interaction or click See pricing to examine available plan options. 

Whichever path you choose, Nextiva requires you to interact with an agent to proceed—which is beneficial since they’ll help explain features and capabilities to you further and steer you in the right direction in terms of how you can use Nextiva’s platform. 

Often, this will involve getting a demo of the software after you set up your call or live chat session with a Nextiva agent. 

Filling out the demo form takes less than 30 seconds, as it only asks for your name, email address, phone number, the name of your business, and how many employees you have. 

With that information in place, a rep will schedule an appointment with you to demonstrate how Nextiva works, help you find the perfect plan for your specific business needs, and fill you in on what it will take to implement the platform into your workplace. 

What Is VoIP?

VoIP is an acronym that stands for “voice over internet protocol,” which is a type of phone technology that makes it possible to make and receive calls using an internet connection instead of a traditional phone line or PBX. 

Traditional phone systems are tied to phones in a single location, such as a wired desktop phone in an office. This phone can’t be used in the elevator, in the car, or at a coffee shop down the street. 

But VoIP platforms make it possible to make and receive calls from anywhere with an internet connection from a smartphone, tablet, or computer. VoIP calls can even work using compatible office phones and headsets, so you can keep your equipment and integrate it into your new VoIP system.

Since the calls are placed over an internet connection, VoIP is much more cost-effective than a traditional phone line. Most VoIP providers offer some degree of unlimited calling, multiple phone numbers, and extensions, and lots of other features that aren’t as easily attainable through a traditional phone line. 

What Are the Three Types of Phone Systems?

There are three main types of business phone systems—VoIP, PBX, and KSU. We explained VoIP above (and we’ll get into how it works in a bit), but the key to remember is that VoIP systems can be hosted on-premise or in the cloud, with cloud-hosted VoIP solutions being the most common type of VoIP phone system. 

PBX stands for “private branch exchange” and is an on-premise phone solution that isn’t tied to any data network. It uses copper phone lines to connect your phone system to a PBX either in the office or elsewhere on-site. A telephony switch is used to direct incoming calls to a phone on the premises.

One variation that combines these two systems is known as a “cloud PBX.” This gives businesses with an existing PBX infrastructure the ability to use multiple devices for VoIP calling and get the other benefits of a VoIP phone service. Nextiva, in fact, offers this option to customers.

Key System Unit, better known as KSU, is the third type of business phone system. This works by using a centralized piece of hardware to route calls. It’s designed for small to mid-sized businesses needing multiple phone lines and features that are more advanced than a traditional phone system. 

How Does a VoIP Phone System Work?

VoIP technology takes the audio from a phone conversation and turns it into data packets that are sent over the internet from the speaker to the recipient. The packets arrive at the recipient’s device and are reassembled back into audio. This process happens instantaneously, which often makes VoIP call quality better than traditional phone lines. 

Every time a call is made or received, a VoIP adapter or service makes the conversion and sends the signal through an internet router. It passes through the VoIP provider’s servers on its way to the caller or callers on the other end of the line. 

Traditional phones rely on circuit switching, which connects all parties on a phone call through a circuit. But VoIP phones use packet switching technology, so data is only sent back and forth between parties as needed. For example, when you’re speaking to someone on the phone, you don’t always need a multi-way connection unless multiple people are talking at the same time (like on a conference call, which VoIP platforms can also handle with ease). 

Since these packets of data are sent through the internet, they can take different paths to be sent as efficiently as possible before reaching the recipient. Data packets can also be compressed, making it possible for them to travel even faster to reduce lag in conversations.

Unless there’s an issue with the internet connection, all of this happens so fast that you won’t notice any delays on VoIP calls. 

What’s also great about VoIP phone systems is their capability to handle other forms of internal and external communication. Platforms like Nextiva delivers features for conference calling, video calling and conferencing, team chat and live chat, text messaging, faxing, and more.

How Much Does VoIP Cost?

The cost of VoIP depends on the provider you’re evaluating. For example, free tools like Google Voice and WhatsApp use VoIP technology to support inbound and outbound call capabilities. But these types of tools are intended for personal use and don’t come with many other features helpful for businesses beyond the ability to make and receive calls. 

VoIP-based business phone systems are almost always subscription-based and have tiered pricing based on the number of users who need access to the platform. Pricing also is affected by the features you need and whether you prefer to be billed monthly or annually.

In the screenshot above, you can see Nextiva’s three main plans and their rates for monthly billing for between 20 and 99 users. If you opt for an annual subscription, those rates drop around $7 per user per month. Typically, the more users you have, the lower the cost per user becomes, too. 

At the time of this writing, most of the leading VoIP providers offer an entry-level plan that runs between $20 and $25 per user per month for 20 to 50 users. But, overall, it’s important to pay attention to the nuances of pricing for each provider. Nextiva offers more affordable plans than RingCentral overall, but something like Ooma offers simplified plan structures with price points that don’t depend on user thresholds.

VoIP solutions rely on stable internet connections or cellular data, too. Most of you will already have this set up. But if you’re starting completely from scratch, then you’ll also need to factor in the costs of setting up quality internet access (or upgrading to handle the addition of VoIP). 

But VoIP’s major benefit is not requiring you to buy any hardware. You won’t need to purchase any new equipment to use a VoIP phone service since they can work on your existing computers and mobile devices, plus traditional desk phones if you opt for cloud PBX. 

How Do I Make a Call Using VoIP?

This is the aspect of VoIP that may be most confusing if you haven’t used a VoIP platform before. Instead of dialing from your phone’s keypad, you can make a call using VoIP directly from the platform’s web-based app, desktop app, or mobile application. 

The exact steps and interface will vary slightly depending on the software you’re using. With Nextiva,  it’s just a matter of finding your contact and choosing how you want to call them or bringing up the in-platform dial pad to reach someone who isn’t already in your contacts. 

Nextiva also makes it possible to seamlessly switch between your computer and mobile device. So you can make and receive calls from anywhere without being tied to a physical location and while you’re on the move. 

On top of that, most VoIP platforms can integrate with other software of yours, like a CRM, allowing you to import contacts wholesale or even initiate VoIP calls from within those other platforms.

What Are the Pros and Cons of VoIP?

We’ve already touched on a good array of the benefits to using VoIP over a traditional landline or an alternative phone system. Let’s recap some of the big ones:

• Affordability and cost savings
• Easier to scale 
• Better call quality
• Increased portability and mobility
• Easy to deploy 
• Adaptability to any work environment
• Advanced features and flexibility
• Ability to bundle voice, video, SMS, fax, and chat into a single system

VoIP also makes it easy to add new users and lines with just a single click. Even your remote staff can be onboarded without needing anything other than a computer or mobile device and an internet connection. 

While VoIP systems are great in many aspects, there are some drawbacks to be aware of. They won’t apply to every situation, but keep these in mind when you’re considering a change to VoIP:

• Requires consistently stable internet connections (both in-office and for your remote workers)
• Won’t work during power outages (as WiFi networks will be down)
• Some platforms might require training or have a learning curve for your employees
• Access to advanced features can require higher-priced plans, which may offset savings

With that said, many businesses believe that the pros outweigh the cons when they’re evaluating VoIP against other phone systems. 

What Are The Key Features of a VoIP Phone System?

Let’s get into some of the specifics of the advantages of VoIP. Every VoIP phone system will give you the same basic ability to make and receive calls over the internet. But many platforms offer a wide array of more advanced features that can prove incredibly helpful to your business, such as:

• Call recording
• Call forwarding and parking
• Auto attendants and interactive voice responses (IVR) 
• Voice and video conferencing calling
• Call notifications
• Visual voicemail
• Software integrations
• Online faxing
• Team chat and collaboration features
• Live chat and support center features
• Call encryption

That’s just a taste of the features VoIP providers deliver. Businesses seeking a way to truly modernize should start by looking for a platform that delivers video calling, team chat, and SMS messaging within a single plan alongside unlimited VoIP calling, then assess options based on additional, useful features beyond that.

Call centers might need more advanced features, like power dialers or auto-dialers, round-robin call routing for sales teams, and live monitoring with call barging capabilities for managers supervising support centers. 

What’s the Difference Between VoIP Business Phone Systems and Call Center Software?

Call center software is a specific type of business phone solution that often falls within the VoIP category. Many call center tools use VoIP technology to power the system.

Generally speaking, call center software is designed for organizations that handle a large volume of inbound and outbound calls. They’re typically used by customer support centers and outbound sales teams that spend most of their workdays on the phone. 

Call center software comes with more advanced tools to support a large volume of calls, such as auto dialers, advanced call distribution, CRM and help desk integrations, live monitoring, call analytics, and more. 

Many VoIP phone providers, including Nextiva, offer separate plans that focus just on call center solutions—either as standalone options or to be used in conjunction with their main VoIP platform. Either way, call center systems are often more expensive due to the built-in features that support high-volume calling, but they are also usually well worth that investment.