VoIP vs. UCaaS: The Differences Explained

VoIP vs. UCaaS: The Differences Explained
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Many companies are evaluating new communications channels due to the COVID-19 pandemic. If you’re trying to understand the difference between a VoIP service and a Unified Communications as a Service (UCaaS) provider, we break it down.
Most corporate technology buyers know what voice over IP (VoIP) is since it’s become the mainstream standard for voice communications among small to midsized businesses (SMBs). It’s enjoyed this success because it demonstrates too many benefits when compared to old fashioned on-premises PBX systems. VoIP costs significantly less (especially when delivered as a cloud service), is much more flexible when it comes to software integration, and can be used to power several other communication channels besides a straight voice conversation using your desktop handset.
It’s actually that ability, which has given rise to a new term for some kinds of VoIP-based services, called Unified Communications-as-a-Service (UCaaS). These are essentially VoIP services that have expanded into multi-channel delivery systems, which sounds complex, but is really rather simple as long as you focus on what you need rather than the potentially myriad options providers might be throwing at you.
What’s given rise to UCaaS is essentially VoIP’s great enabler: software. By pushing your communication solution to the software layer, you’re opening a myriad of new doors when it comes to enhancing the capabilities of what most people think of when they look at a phone. From adding new features to the technology to integrating it with the software your business relies upon most, it’s all possible with VoIP, and especially UCaaS solutions, which are usually designed with integration in mind. Undoubtedly a big reason they’re growing so fast as the chart below from market research firm, Statista, clearly shows.
Image of Statista market research table showing growth of UCaaS market from 2014-2024
Size of the unified communications market in the United States from 2014 to 2024, by type(in billion U.S. dollars)
Below we’ll explain the features you’re paying for with a straight business VoIP provider, including those in our latest PCMag Business Choice Awards for VoIP survey. We’ll also cover what you’ll get if your VoIP provider offers UCaaS. But before we get into the specifics, let’s do a simple breakdown of VoIP and UCaaS. We asked Curtis Peterson, Senior Vice President of Cloud Operations at business phone system provider RingCentral to help distinguish between the two types of services.
“VoIP is usually just a voice service provider, inbound and outbound calls,” Peterson explained. “UCaaS is basically looking at all business communications and putting them over IP or Internet Protocol. VoIP is a single mode. UCaaS is multi-modal: texting, chatting, video conferencing, screen sharing, video meetings. But it uses VoIP to power the voice part.”
A great nutshell summary, but now let’s get into more detail.
The Features of VoIP
Image of a desktop business VoIP phone
At its core, VoIP is a digital telephone service that uses the internet for transport and delivery of communications. You can make and receive calls from your internet connection via handsets as you would in most traditional office settings or via softphones (which are software-based applications). By taking advantage of the microphone and speakers in your desktop, laptop, or smartphone, you’re able to conduct calls in the same manner as you would using a typical handset.
VoIP offers many of the same accouterments as your telco service provider. You will be able to receive and listen to voicemail messages, and monitor calls via caller ID. Calls can be forwarded to alternate lines if someone isn’t available to receive a call. Other features VoIP offers include auto-attendants, call holds, call logs, call monitoring, call recording, call transcriptions, dial-in conferencing, and number porting.
An Emphasis on Networking
One caveat of VoIP, even for services that are delivered and managed via the cloud, is that they’re taxing to your local area network. With VoIP enabled, suddenly many of your PCs will start transmitting voice traffic not to mention all VoIP-enabled desktop handsets, and, for most companies, also a slew of mobile phones, tablets, and other devices. And the fact that this is a lot of new traffic isn’t the biggest problem; the biggest problem is that all this new traffic is also sensitive.
Normal data traffic can stand sudden if short network slow downs as well as occasional packet loss, latency, and network jitter. VoIP traffic doesn’t like any of those things and tends to react badly to them in the form of audible breaks in your conversations or even dropping calls entirely. Preventing such problems is certainly doable, and all the best VoIP providers can assign you customer service engineers to help, but you’ll still need on-staff IT professionals on your side and this will take up a good deal of their time, especially during the initial roll-out of the service.
And all of the above is simply about one kind of communication, namely voice, being turned into a new form of data. Once you add more channels, things can become even more complicated, which is exactly what can happen when you deploy UCaaS.
Concept art of workers with many channels of communication
UCaaS Features
UCaaS generally includes voice as one of its communication options, but as the name implies, it provides a more robust communications capability by offering other channels as well, notably video. With UCaaS, your service provider will let you also schedule one-on-one video calls as well as one-to-many video conferences. This may not seem like a must-have for smaller companies but, as your team scales and as you hire in different geographies, you’re going to want to be able to conduct “face-to-face” video calls. With video conferencing and VoIP, you’ll be able to do things such as conduct meetings with hundreds of attendants, share your screen with everyone attending, and even share and receive files to everyone on the call or to individual attendants.
UCaaS tools also let you chat and text message with coworkers on your plan. Why would you need this feature? Well, if you’re on a video call with a client and your sales rep is speaking out of turn, then you can send her a private chat message to get everyone on the same page. This also lets your team members send chat messages rather than emails to discuss more time-sensitive and more casual interactions.
Some UCaaS providers allow for deep collaboration and group project management. This includes document sharing and simultaneous editing, to-do lists, shared calendars, and even joint file storage.

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