The Three Hats of VoIP

Over the past few years new VoIP products and services seem like they are announced daily. While this rate of innovation is exciting, it is also very confusing. How are these companies the same or different? What service should I use for my business?

These new VoIP solutions fall into one of three general categories: hosted PBX solutions, telephone API platforms or telephone applications.

Many hosted PBX solutions, such as Packet 8, Vonage or Fonality, replace your business’s premised based telephone with new SIP phones or “soft-phones” connected over the Internet to a hosted PBX system. These solutions often result in lower costs with no premise based telephone system to support and maintain. But, there are hidden costs in this model that complicate the buying decision. The best solutions require your company to install a dedicated, VoIP-optimized Internet connection. These connections are often more expensive than dedicated phone lines so some of the costs savings disappear. Since cost is most often the driver for the switch from plain old telephone lines (POTs) to hosted PBX solutions, this space has been commoditized and has become highly price competitive. This price competition is good news for your business but creates challenges for the hosted PBX companies.

Telephone APIs from companies such as Twilio and Voxeo, offer a platform where your software developer initiates and controls phone calls without purchasing equipment or telephone connectivity. The best APIs, such as Tropo from Voxeo, give your company access to a sophisticated, and highly reliable, telephony network suitable for developing complex telephone applications. Ease of use is often a selling point of these platforms, but in reality they are only easy to use for experienced software developers since they provide infrastructure and not packaged solutions. An experienced software developer may be able to code a simple phone call with just a few minutes of work using a telephone API. But building a robust, reliable telephone solution, such as dynamic call tracking, a virtual call center, or customer notifications service with retry logic and automated scheduling, requires hundreds or even thousands of hours of work. Telephone API solutions are best for companies where integration of telephone services is a core competency and where dedicated software developers are available for application support and maintenance.

Telephone application services are completely different from both hosted PBX solutions and telephone APIs. Telephone applications, from companies like Ifbyphone, provide your business with complete, ready-to-run, hosted applications that work with any telephone - business, home, VoIP or PSTN. The plug and play nature of telephone application services enable your business to measure value immediately - increased sales, reduced service delivery costs and improved customer retention. You can use these applications to manage, measure and automate phone calls that track advertising campaigns, dynamically route calls, provide customer notifications and deliver customer fulfillment or support via virtual call centers or distributed call groups. Then by utilizing an API on top of these applications your company can quickly and cost effectively integrate these ready to run applications with key business processes.

To further clarify the differences among these three VoIP models, let’s compare them to traditional web business services.

  • Hosted PBX solutions are like Internet backup services such as SugarSync or Mozy. Instead of purchasing and maintaining your own computer backup equipment, you back up your computers over the Internet to a centralized service. While you share a high-quality backup facility, you still carry the cost of the Internet connection and the desktop computers.
  • Telephone API platforms are like web hosting companies such as GoDaddy or Rackspace. The hosting company provides you a platform to build anything you want providing you have the right skills and the staff to support your custom application.
  • Telephone application services are like or NetSuite. While you could build your own CRM system, most businesses choose to use an off-the-shelf CRM solution. then provides APIs for integrating with their applications and a specialized environment for extending the platform ( Similarly, Ifbyphone offers an API for integrating with our applications.

While hosted PBX solutions, telephone APIs and telephone applications may share the VoIP “cloud”, these three solutions are very different. Think of hosted PBXs as replacements for existing telephone systems. Telephone API platforms provide a greenfield environment for software developers. And, telephone application companies, such as Ifbyphone, provide ready to use applications for businesses looking to increase sales, improve customer retention and increase business efficiency.

By focusing on ready to run telephone applications Ifbyphone is helping thousands of company manage, measure and automate voice interaction with hundreds of thousands of customers daily.

eComm 2009 Ifbyphone iPhone Mashup Tutorial

I recently led a session at eComm 2009 on how to build an Ifbyphone-to-iPhone App. We've uploaded the session to YouTube. You can find it on the Ifbyphone YouTube Channel, and I've also listed the URLs for the 7 parts below:

Part 1: Introduction to iPhone Applications

click here to play video

Part 2: Introduction to the Ifbyphone API

click here to play video

Part 3: Getting Started as an Ifbyphone Developer

click here to play video

Part 4: Building Your First SurVo (IVR Voice Dialog)

click here to play video

Part 5: Building Your First iPhone Application

click here to play video

Part 6: Building the PHP Middleware (Glue)

click here to play video

Part 7:  API Review and Course Wrap Up

click here to play video

You can find more information on or in the developer section of the Ifbyphone website.

It's the applications, stupid or what telco can learn from

It seems that a popular business model today is to deploy some telephone softswitches or Asterisk servers into a data center, contract for call termination services, and anounce that you are in the telephone API business.  Unfortunately this business approach ignores the lessons learned by following the grand daddy of cloud computing, was founded in 1999 to provide customer relationship management solutions to small and medium sized businesses.  Four years later, in 2003, after acquiring over 8,000 customers and 127,000 subscribers they released the API.  Why did wait so long to release an API?

It's the applications, stupid! 

Businesses buy applications, not APIs.  By allowing others to create applications for Salesforce that solve real business problems, created a sustainable and profitable ecosystem.

At Ifbyphone we are following a similar process. In September of 2007 we released our current suite of automated telephone applications.  These applications enhance business processes that depend on a telephone.  Our off-the-shelf applications range from a simple virtual receptionist, voice mailbox or parallel "Find me" (think Google Voice) to sophisticated, interactive, voice-response applications such as Store Locator, Voice Broadcast and API-driven conference calls.  Any of over a dozen Ifbyphone applications may be invoked from an API call, an inbound telephone call, a scheduled outbound call, or an on-demand outbound call.

While those developers who prefer to build applications from scratch have complete access to basic call control services, the majority of Ifbyphone development partners utilize our off-the-shelf telephone applications to save time and reduce complexity.  Our customers and partners are free from the burdens of building standard call processing components such as find me, voice mail or caller ID routing.  Instead they utilize the Ifbyphone API to integrate their business processes with the Ifbyphone standard applications. 

This model works.  Ifbyphone has over 10,000 customers and has been generating revenues for over 20 months.  You can learn more about our development programs at the Ifbyphone Developers page.