Rarely does bad news come wrapped around good news, but if your company needs to upgrade your telephone system, consider yourself lucky. OK, not lucky, because replacing phone systems takes far more time and money than you first think. At least today you have options that reduce the money required from outrageous to merely surprising, a huge savings.Small and medium businesses now buy more IP PBX systems than traditional telephone network PBX systems. Last time you bought a PBX you probably had options for the PBX vendor and long-distance provider, but no options on which local service carried your calls. Now you have options for all three.Will Gibson, president of Fluent Systems, started experimenting with VoIP phone systems back in 1999, "before it really worked," he says with a laugh. His company focuses on companies needing 30 to 50 phones, although he does have one national construction company customer with thousands of phones spread around 82 locations."The sales process is lease driven," says Gibson. "Companies start looking when their lease is running out." Rarely will companies add a new phone system while still making payments on their current one, but Gibson has had a couple of customers who saved so much with a new IP PBX they did just that.When Gibson started, the big savings came from "toll bypass,- shifting voice traffic between offices off of toll lines to existing IP data networks. Suddenly a phone in a remote office was another extension, not a long distance call. An IBM executive once told me that a decade ago, 90% of IBM's long-distance calls were employee to employee. With long-distance rates at about 15 cents per minute, bypass saved big money.But today rates are four cents per minute or less, and you can't justify an IP PBX on long-distance cost savings. Look instead to adding more features, simplifying your networks and easier management.Gibson resells systems from Sphere Communications because they offer SIP Trunking, among other features. Session Initialization Protocol (SIP) Trunking bypasses your local telephone lines and goes directly to an IP switch at the carrier. This feature avoids the need for multiple telephone lines from the traditional telephone company linked to your building, and avoids the expensive ($2500-$5000) gateway hardware that connects your IP PBX to traditional phone lines.Besides cost, avoiding traditional phone lines from the Public Switched Telephone Network (PSTN) as much as possible reduces noise on the calls. Voice quality from IP phones drops when the signal is converted to an analog signal when it hits the PSTN.Today, most companies get data network lines from one vendor and telephone lines (even 24 lines bundled into a T1 circuit) from another vendor (a phone company). SIP Trunking avoids that need by running voice and data over the same network connection until it reaches a service provider. Gibson leases 3M and 6Mbps data lines that use as much bandwidth as necessary to carry phone calls and supports Internet traffic with the rest of the bandwidth. Since there are few if any phone calls at night, online back-up services can run at the full bandwidth to transfer more data more quickly.Not every small company will save money with an IP PBX. Gibson can't really help small companies with fewer than 10 phones and no serious data infrastructure because the savings won't pay for the new system. Of course, features such as easy teleconferencing, instant messaging, tracking presence of where employees are and whether they're on the phone or a network connection may make a phone upgrade worthwhile anyway.Sphere has plenty of competition. Google "IP PBX" and you'll get over three million results, far more than you can check. Talk to companies in your area for references, talk to your local business groups for references, and talk to your technical resellers. Always check carefully, and always check references. Even when you save money, changing phones is a hassle and you need a good partner to make it work smoothly.