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VoIP is the Wave of the Future—and the Present
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By Alex Pierson

Small and medium businesses worldwide face similar challenges. They need to cost-effectively build and manage a communications infrastructure capable of meeting today’s telephony and data challenges and efficiently support tomorrow’s application and business growth requirements.

Growing a business means staying on top of day-to-day operations and freeing employees from repetitive and time consuming tasks. Providing employees with the infrastructure to work efficiently is half the battle. A good telephony solution must be easy to learn and use. Tasks ranging from a typical receptionist’s duties to the creation of a call center for handling real-time orders and service all must be automated.

Voice over IP (VoIP) technology is becoming increasingly important for businesses large and small. VoIP lets businesses save money on long distance and on changes to their voice network, while offering cost-effective integrated communications tools such as unified messaging and interactive voice response (IVR). While VoIP adds a layer of complexity to the communications network, the lower long distance costs will provide a both near- and long-term return on investment.

It's important to understand VoIP basics. In the past, all digital phone calls were sent over a time division multiplexed (TDM) link, and TDM is still the default multiplexing technique used today. TDM transmissions include built-in quality of service because each transmission receives a dedicated time slot for the user’s data or voice. The time slot cannot be over-run by another user’s voice or data. The downside is that if the dedicated time slot is not used by the voice or data it is wasted because it cannot be shared with another user.

Packet network technology, often called Internet Protocol or IP, eliminates the need for separate networks by converting voice, multimedia, video and data into tiny packets similar to those that comprise email and Web sites. These applications can be transmitted together on the same network. Putting all communications onto one network using digitized packets eliminates boundaries between services. By comparison, the traditional approach requires a network dedicated to voice, which converts conversations to electrical signals rather than digital packets of information.

With IP technologies small businesses can now subscribe to a full range of communication services that, in the past, were only within the reach of larger corporations. Businesses can pay one service provider a single low monthly fee for telephone service with inexpensive long distance calling, fax, email and multimedia capabilities all bundled together. Lower communication costs help these smaller businesses remain competitive and better compete in global markets.

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Alex Pierson is the Vice President and General Manager for Nortel's Enterprise Business Networks.
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