Digital Phone Systems (Legacy) v/s IP Based

Updated: October 01, 2009

Digital Systems v/s IP Phone Systems.

A white paper by Pierre Kerbage

VP of Sales & Marketing for Zultys, Inc. or

(408) 328-5423

Digital Systems have been around for decades. Many of these systems have proven to last 10 to 20 years in some cases, showing strong reliability in the work place. In the past few years, these legacy systems have added expandability and functionality such as T1, PRI, Automatic Call Distribution and much more and some models can scale to thousands of end points (phones) with great reliability.

IP Systems originated about a decade ago, and today, some of these systems can scale to tens of thousands of units in dozens if not hundreds of locations.

What is the advantage of an IP Phone system over a traditional systems ?

Some of the IP Systems today are HYBRID: meaning that they can handle TRADITIONAL phone lines (including Analog trunks, ISDN, T1, E1 and PRI to Multiple T1 and PRIs) as well as Voice Over IP (VoIP) phone lines. So they provide the best of both world. VoIP phone lines (also called SIP: Session Initiated Protocol) are typically provided by an ITSP (Internet Telephony Service Provider), and these type of trunks can replace or augment your traditional phone lines. Each TRUNK (meaning phone line) requires roughly about 84 Kilobit of bandwidth (uncompressed) when a conversation is in session. That means that a DATA T1 (1.5 Megabits) can handle about 17 or so conversations simultaneously. Many companies find that SIP is the way to go because they cost far less than traditional phone lines, as well as provide extremely competitive rates for long distance, and some providers have plans which include unlimited long distance. And if you make calls overseas, you are in for a treat as some of these plans can provide rates as cheap as a few pennies to Western Europe or Southeast Asia. In essence, if you are paying $1000 for Long Distance a month, and you can buy a brand new IP Phone system (that costs say: $20,000) , you could lease to own that system for around $460 per month, therefore SAVING the company nearly $5,000 per year and much more once you finish paying on the lease. THIS IS AN EFFECTIVE ROI that makes sense.

Having said that, many people are buying IP Phone systems today and STILL using traditional Phone lines because they either don't trust the internet or don't understand SIP Technology that well or don't have the upload bandwidth it takes to sustain these type of phone lines. But they LIKE the idea of buying an IP Phone system because it provides the FLEXIBILITY to use traditional phone lines OR VoIP Lines or BOTH.

But the appeal of IP Systems goes FAR BEYOND the fact that you can do IP Trunking.

Here are my Top Reasons why IP Phone Systems are incredibly beneficial and result in drastic cost savings and why Digital Systems are dying:

  1. an EASY TO USE Programming Interface. Many people don't want to have to call the "phone guy" every time they need to make a change to their system. IP Systems provide a Graphical User's Interface, that can be launched from anywhere and make changes to the system that can take effect immediately. So making changes to the system is much easier to understand than legacy systems. This often provides tremendous cost savings for the lifetime of the phone.

  1. The ability to have a Phone in your house or another location and to be able to use the office's Dial tone is beneficial too. The remote user appears as if they are working at the office. So if a call comes in - it can be transferred to that remote user (wherever they have that IP Phone plugged in) and the caller has no idea that the remote user is working from home or from anywhere in the world (where broadband is available). Working remotely can cut costs of Travel, time, gas, etc… and quickly and easily enables remote workers. Just think: no added desks, real estate, electrical, supplies, etc… etc… Teleworkers can take their office phone, plug it in, and off they go. Their extension remains the same and is totally transparent to the caller

  1. If you have more than 1 Office - the ability to have 2 systems - and the ability to do an extension to extension DIAL and of course when that happens - you bypass any tolls (no long distance) not to mention the ease of talking to someone by just depressing their button or extension. Another cost saving.

  1. The ability to have very flexible "find me follow me" - For example - if you are out to lunch and are expecting an important phone call - the system can easily transfer that call to your cell phone. In the case of SOME large Enterprise (yes, expensive) system, the Cell phone can even be a MOBILE EXTENSION - meaning that you can transfer BACK the caller to an INSIDE EXTENSION from your CELL PHONE (or put them on hold and them hearing your CORPORATE ON HOLD messages). Now you can DROP that expensive CALL FORWARDING (multiplied by every line you have) and drop the after hours answering service since calls can be forwarded ANYTIME ANYWHERE.

  1. Some systems add features like Fax Services (Fax from your desktop or TO your desktop). Cut costs of Toner and Paper by having the fax come RIGHT TO YOUR DESKTOP in a TIF File Format and FILE that fax in a folder on your desktop or your server. Recording conversations and dropping that WAV File is also huge.

  1. Some of these systems can handle call recording, allowing you to record conversations by simply pressing a key and then archiving these to an external storage area

  1. How about Unified Messaging: When receiving a VOICE MAIL - that voice mail is also EMAILED to you in a WAV file enabling that Voice Mail to be SAVED forever on your desktop or server or be forwarded as a WAV file outside your company.

  1. The ability to move your phone by simply unplugging it and plugging ANYWHERE on your Network where you have Ethernet (without having to reprogram a THING). Cut costs by NOT dispatching the "phone guy"

  1. IP Systems cut cost of Wiring in HALF. So if you are moving to a new place and where you normally have to provide a VOICE and DATA Cable - you would NOT need to do this anymore. Most IP Phones have a 2 port switch on them - allowing you to plug your PHONE into the Ethernet Wall Plate and your PC into the back of the phone - therefore only requiring 1 Cable to the desk NOT 2. This cuts cost of cabling by 50%.

  1. The EASE of use of an IP system is amazing providing you a Software interface on your PC (and some systems like the Zultys can support Linux and MACs too) so you can have full "dial from Outlook" capability, Chat, Presence (I am at Lunch) and MUCH more

  1. The ability to use your LAPTOP or your Desktop as a PHONE - so if you are traveling - simply plug your Laptop into the Hotel's or your house's Internet and you are now connected to the office. Add a Headset for better sound quality and you have yourself a great communication device

  1. Call Detail Reporting is often built-in to many of these systems. The ability to find out just about anything you want about incoming or outgoing calls and produce reports that can translate into TIME BILLING and providing important information on where your callers are finding you (i.e. having them dial a different Phone Number for certain add campaigns) or how about tracking what your call center is doing, or Sales reps, or who called us today ? Etc…. Of course these reports can easily be exported into a multitude of formats making them easy to manipulate for many reasons.

  1. Cell phone Twinning: The ability to have your cell phone function as a remote extension of your PBX and then be able to transfer that call back to any extension in your office. Imagine working from home and your cell phone rings, it is a client. You speak to the client and now they want to be transferred to your customer service dept. You use your computer to initiate that transfer in no time. What is the price of CONNECTIVITY

  1. Webinars: Many of these systems today integrate or have an option to include Webinar facility like Webex. Unlike recurring costs like Webex and Gotomeeting, these are appliances that easily add to your phone system and DEFER these recurring costs.

  1. How about application interface where you can make a phone call from or CRM or Outlook. Or the ability to call anyone in your contact's list from outlook.

In short - IP Systems are here to stay and are definitely where EVERY Phone vendor on earth today is going. SIP is the ONLY ratified standard of telephony today. Simply putting it "If you ain't SIP, you AIN'T" and you won't connect to tomorrow's applications or phones or systems.

IP Phone systems DO save money by providing lesser expensive alternatives for Local and Long Distance lines as well as 0 Toll when using them between each other, and decrease costs of Cabling as well as the need to dispatch a Phone guy every time, since they use a Graphical User's Interface allowing each person the FLEXIBILITY to manage their own end points and the ability to move their system as much as they want WITHOUT requiring a phone Guy. Finally - moving an IP System is as easy as unplugging 3 connections. No more 66 Blocks and the confusing and unattractive wire closets you sometimes see. They are often a 2 or 3U Rack Mounted appliance that EASILY travel and here again, reduce cost if you ever have to move the system. IP Systems provides ease of use, flexibility, mobility, compliance, scalability, and a drastic overall reduction of price.

Featured Research
  • 8 Ways Business Travelers Can Save with VoIP

    Do you or any part of your workforce travel for work, or even telecommute? If that answer is yes, then you should be utilizing mobile VoIP. With VoIP, businesses have been found to save as much as 40% on local calls and a whopping 90% on international calling expenses. more

  • Phone System Showdown

    When it comes time to select your new phone system, one of the biggest questions that you will face is whether to go with the hot, new VoIP system or the steady and secure PBX network. There are pros and cons to each of these phone systems, and before making any purchase we highly suggest that you take the time to download and read our latest guide: Phone System Showdown: VoIP vs. PBX. more

  • Signals Your Company is Ready For Unified Communications

    Efficient and effective business collaboration is essential to company success and as you grow your business, you'll discover all the different communication methods that you NEED to stay connected with partners and customers. Implementing a Unified Communications (UC) system can save your company upwards of $920,000 a year due to increased efficiency amongst company employees. more

  • Phone System Implementation Expectations

    Providers would have you believe that implementing a new phone system is as easy as counting to three. However, while the process may not be difficult, there are steps that need to be taken to ensure that your new VoIP system is installed and implemented smoothly. Luckily, the challenges associated with upgrading your system tend to be fairly predictable. Most businesses run into the same set of problems that many others have faced before them, meaning avoiding or overcoming them is as easy as preparing ahead of time. more

  • Your Phone System and Your Bottom Line

    Businesses have been using phones to drive increases to their bottom lines for almost a century now. Telephony, much like the rest of the business world, has seen drastic changes with the increase in technological advancement. Voice Over Internet Protocol (VoIP), has enabled companies to connect with consumers at levels that have been seen as unheard of before. And trust us when we say this, it is doing wonders for the bottom line. more