Managed VoIP 101

By Catherine Hensley
Updated: February 12, 2011

As telecommunications technology advances, many companies are turning to VoIP to handle their voice and data operation needs. With VoIP (Voice over Internet Protocol) technology, voice and data communications (such as basic telephone service, email, video chatting, and faxing) are transmitted over an Internet connection. VoIP gives users the ability to handle multiple calls and data applications through a single network, eliminating the need for older and more expensive telephone equipment and maintenance costs.

When a company decides to go with VoIP to administer its telecommunications functions, it will have to choose between a managed or hosted VoIP system. Each has its particular advantages and drawbacks, and these are worth considering before making a decision. The costs of installing and operating a VoIP can be high, and skilled personnel will be needed to ensure the system runs smoothly for employees.


When a managed VoIP system is in place, a third party vendor can provide all of the services related to equipment installation, storage facilities, technical support, and software maintenance. All equipment is kept either at the location of the subscriber or that of the third party. A company can select an all-inclusive service package appropriate for their telecommunications needs. Managed VoIP systems generally have more add-on features available (such as fax capabilities), have lower call costs, and can be customized depending on the types of services a company needs to perform.


Managed VoIP systems sometimes cost more than hosted VoIP systems because the equipment is often located in the office itself. A hosted VoIP system also uses a third party to control its functioning, but much less equipment is kept at the site of the subscriber. This is attractive to many medium-sized companies looking to reduce communications budgets and still expand their business reach. Usually, only the VoIP phones and their associated software materials need to be kept at the site. Because of this, businesses can reduce the costs that go along with servicing and maintaining the telephone equipment. Having the VoIP technology hosted also allows for updates to be applied faster than with other types of systems.

The size of a business is one factor to consider when deciding on which type of VoIP system — managed or hosted — will be best suited for your organization. Look at your location’s storage capabilities, budgetary needs, and desired features. After such an analysis, you’ll be well on your way to maximizing your company’s telecommunications abilities through VoIP technology.

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