VoIP - Definition & Advantages for Your Small Business

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VoIP or Voice over Internet Protocol is a technology that allows people to make voice calls over an internet connection instead of the traditional landline approach. Users can make calls from computers, mobile phones, and other devices. In recent years, VoIP has become an increasingly popular choice for both consumers and organizations because of its unique capabilities, such as better call quality and multimedia communication. You've likely already used a VoIP phone system, service, or software without realizing it!

There are also unique advantages to implementing VoIP into your small business's communication tools, which we'll explore further in this blog.

VoIP vs. Landline

The primary difference between VoIP phones and traditional telephones is the way in which voice communication is transmitted. While traditional telephones use analog signals that are carried via physical cables to connect users, VoIP phones use digital signals to transmit data using the IP (Internet Protocol) network via cellular data or Wi-Fi. In a business context, VoIP integration requires a fast internet connection and high bandwidth that can support both regular IP calling and day-to-day internet usage.

How does it work?

When you make a VoIP call, your voice is converted into digital data through your device's microphone. In a process known as packet switching, the data is broken down into smaller packets of info, which are then transmitted over the internet to reach the recipient. When the packets arrive, they are rebuilt and the data is converted into sound once again via the recipient's headphones or speakers.

This process happens rapidly in real-time, creating a seamless experience for both users. Therefore, as long you have an internet connection, with a VoIP service provider virtually any device with a speaker and microphone can become a VoIP phone.

Pros & Cons of VoIP vs. Traditional Phones

Let's break down the advantages and disadvantages of these two options to help you determine what works best for your business.



  1. Cost savings - One of the biggest advantages of Voice over Internet Protocol integration is cost savings. Traditional phone systems can be pricey, especially for small businesses that rely on making a lot of long-distance or international calls. Since the internet is used to transmit voice data instead of physical wires, VoIP not only allows businesses to make calls at a lower cost, but in many cases, international calls are free.

  2. Flexibility - VoIP phones are incredibly flexible since they can be used from any location as long as there is a reliable internet connection. They can even be used on a computer or a mobile device, in case a user needs to communicate while on the go. This means that businesses can operate virtually anywhere, and employees can work remotely without further communication disruptions or inconveniences.

  3. Advanced Features - VoIP services come with a range of advanced perks that are not available on traditional phone systems. Depending on the service provider, these features could include call forwarding, recording, voicemail, custom caller ID, conference calling, file sharing, instant messaging, virtual phone numbers, HD sound quality, and more.

  4. Scalability - Voice over Internet Protocol systems are highly scalable, meaning that they can grow and adapt to the needs of a business. As your small business grows, additional phone lines can be added easily, and new features can be integrated without disruption or tedious hardware upgrades.

  5. Reliability - VoIP systems are generally very reliable, with minimal downtime. This is because the systems are designed to be redundant, meaning that if one part of the system fails, another part will take over. This ensures that there is no interruption in service.



Potential Quality Inconsistency - Phone call quality can be affected by internet connectivity, bandwidth limitations, and network congestion, which could potentially result in dropped calls, delays, or echoes.

Power Outages - In the event of a power outage, VoIP phones may not work as they rely on an internet connection via electricity to function, unlike landlines.

Security - Without strong safety measures, VoIP phones can be susceptible to cyber attacks, such as hacking and phishing.

Dependence on Internet Connection - VoIP phones require a reliable internet connection, which means that if the connection is weakened or lost, the phone service will also be lost.

Landline Phones


  1. Traditional Reliability - Landline phones use a dedicated physical wire network and the user's voice signal is transmitted over a continuous circuit. Based on your business needs, this option may be more reliable vs. depending on an internet connection.

  2. Security - Since the voice signal is transmitted over a closed circuit, traditional telephones are less vulnerable to cyber attacks than VoIP phones.

  3. Power Outage Protection - Traditional phones can continue to function even in the event of a power outage, as the power comes from the telephone company, not the user's/organization's electrical supply.


Cost - Traditional phone services are typically more expensive than VoIP services, especially for long-distance and international calls.

Features - Landline phones are limited to offering only basic calling features and are not as versatile as VoIP phones in terms of perks like multimedia sharing.

Mobility Limitations - Since landlines require a dedicated phone line to function, users have to rely on a cell phone to take calls on the go or outside the office.

Limited Scalability - Traditional phones are often less scalable than VoIP services due to relying on physical infrastructure to carry calls. This could make it more challenging for a business to adapt to rapid changes in call volume.


Why should Small Businesses consider VoIP?

Each small business has its own unique challenges and goals. Transitioning to VoIP phones might be a great solution for your business's communication needs. Besides the benefits of cost savings, flexibility, and advanced features, here are some more perks you can consider when making your decision:

Because VoIP phones can be used with computers or mobile devices, communicating while on the go can be much more efficient, reliable, and intuitive. It's particularly useful for businesses with employees who travel frequently or even work remotely.

Improved Customer Service
With VoIP, small businesses can improve the customer service experience by using features such as auto-attendants, call queues, and call routing, which assist with directing calls to the appropriate person or department more seamlessly.

Integration with other Applications
VoIP phones can be integrated with other business applications to streamline communication and increase productivity, such as CRM software. This allows businesses to easily manage customer interactions and even enable automatic call logging, providing access to customer data during calls and helping businesses manage their communication more effectively.

VoIP is easy to set up and maintain, making it an ideal choice for small businesses with limited IT resources. By leveraging all of these benefits, small businesses can improve their communication and compete more effectively in today's marketplace.

As one of Calgary’s top-rated IT service providersGAM Tech specializes in delivering “big business” managed IT services to small and medium-sized organizations in Alberta and beyond. From disaster recovery and cloud solutions to VCIO services and strategic around-the-clock network security, GAM Tech has reliable, affordable solutions to keep you up and running. 

Posted by GAM Tech Team on Apr 10, 2023 11:00:00 AM

Topics: voip, communication

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