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Dave Frey, a director at Teach Away Inc., is seen in his office on April 30, 2010. Teach Away Inc. is a technologically innovative company that uses laptops and VoiP phones.

JENNIFER ROBERTS/jennifer roberts The Globe and Mail

In the first part of this series, we looked at how and why small businesses are going wireless. There are various means of taking the office outside the office, such as putting software and data on the cloud, integrating wireless printing and letting employees communicate and collaborate through the Internet.

This week, we look at one of the most important and widely adopted aspects of the wireless office: Internet-based phone calls.

Voice over Internet protocol essentially describes audio communication carried through Internet-based networks - basically, phone calls made over the Web, rather than through traditional phone lines. The term is also sometimes used to describe video-based communication carried over the Web from mobile devices, but is usually reserved for Web-based phone calls.

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For years, VoIP never really caught on in the consumer market, and even less in the business world. Because the service is dependent on an Internet connection, call quality could vary widely from place to place, and at various times of the day.

However, in recent years, the wide adoption of broadband networks has made service quality much less of an issue. Indeed, today's networks handle real-time video communication better than most networks handled audio communication just a few years ago. As such, small and medium-sized businesses are increasingly considering switching to the new means of making calls.

Already, there are various VoIP options available to businesses and consumers, including relatively inexpensive services from companies such as Google Inc., which offers the Google Voice product (although not in Canada). Apple Inc. also now offers Internet-based video-calling tools for some of its newer mobile devices, and Research In Motion Ltd. recently introduced a video-chat application for its PlayBook tablet.

But perhaps the most well-known VOIP product available today is Skype. Initially intended as a way for consumers to make free or cheap calls over the Web, Skype has grown to include some 700 million users today. In the process, Skype has introduced VoIP services focused on businesses as well as consumers.

And it is Skype that, in many ways, is leading the newest surge in business VoIP adoption.

Earlier this month, Microsoft Corp. bought Skype Technologies SA for $8.4-billion (U.S.) - the largest purchase in Microsoft history. Although it is still unclear just how wise a purchase the Skype acquisition was, the deal will have a profound impact on how quickly small and medium-sized businesses take up VOIP services.

That's in large part because Microsoft plans to integrate Skype into just about all of its services, including its smart-phone platform and the kind of enterprise software already in use by millions of businesses.

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That integration alone could be the push VoIP needs to hit critical mass in the business world, as new customers lure more new customers, and so on. Microsoft's move will also likely spur new VoIP players such as Google, and established ones such as Cisco Systems Inc., to focus more of their efforts on the technology.

For businesses, the key advantage of VoIP is cost. Internet-based calls are often far less expensive than setting up a traditional phone system. The cost savings are also due to the ability to use one network for both data and phone services.

As more services, such as voice mail and text-messaging, become available in VoIP flavours, those cost savings begin to apply to more and more areas of business communication.

But there are still plenty of reasons why some businesses have opted to stay with traditional phone systems.

For one thing, the traditional network is usually more reliable, thanks to decades of investment in the infrastructure. Most businesses also already have existing communication networks, and may not be ready to replace what is usually a costly capital expense.

That's why companies such as RIM have recently offered services that let businesses integrate VoIP and traditional phone systems, so that employees can send and receive calls on either network.

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Those tools will prove vital in getting small and medium-sized businesses to make the leap to Internet-based communication.

The series continues next Monday. Other Stories can be found on the Web Strategy section of the Your Business website.

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