Understanding VoIP

What is VoIP?

VoIP is an acronym that stands for Voice over Internet Protocol. The public Internet and the vast majority of home and office computers and network devices use Internet Protocol to communicate with each other. VoIP simply refers to the transmission of audio over this type of network. We could just as easily use the terms Web Browsing over Internet Protocol or Email over Internet Protocol to describe those very common activities.

The Pros and Cons of VoIP

Like most technologies, VoIP has it advantages and its disadvantages. Knowing what those are and understanding how to maximize the good and mimimize or eliminate the bad are the keys to determining whether or not VoIP is right for your business.


Applications - Virtual phone systems, Internet-based phone lines, remote office phones, multi-site integration and soft phones to name a few. more info

Cost Savings - many VoIP applications and services provide significant cost savings to businesses when compared to their more traditional alternatives. This isn't always the case, though, so it's wise to carefully analyze the Return on Investment.

Portability - With VoIP phone service (SIP Trunks), there are far fewer geographical constraints on phone numbers. The physical location of your office does not necessarily dictate the phone numbers that are available to you - even the area code. Also, when properly configured, VoIP phones can be taken from location to location and used anywhere that they can be connected to the Internet.


Voice Quality - Voice quality depends in part on the performance of the network over which VoIP operates, so inadequate network performance can result in poor voice quality. This problem occurs most often for applications that require voice transmission over the public Internet.

Reliability - VoIP applications that require an Internet connection will not function if the Internet connection goes down. Most businesses experience Internet disruptions more frequently than traditional phone service disruptions, making VoIP a less reliable alternative in these situations.

VoIP Applications

The technology to transmit audio over IP networks has resulted in the creation of a number of applications that can be very beneficial to businesses. Benefits can take the form of improved corporate communications, workforce mobility and of course everyone's favorite - cost savings. The most common VoIP applications include:

Hosted VoIP, Hosted PBX, Virtual PBX, Cloud PBX

All of these terms refer to essentially the same thing, which is having a virtual phone system that is located somewhere 'out there' on the Internet. There are a number of Hosted VoIP providers to choose from, each with their own pros and cons. This type of service is rapidly becoming very popular with small and medium-size businesses for a variety of reasons including reduced operating costs, access to sophisticated telecommunications features and easy multi-site integration. Hosted VoIP has also been made more feasible by the growing availability of low cost, high bandwidth Internet service.

In a typical Hosted VoIP setup, the customer subscribes to the service and either purchases or rents VoIP phones. These phones are then installed at the customer location (sometimes self-installed, sometimes installed by a technician) and are connected to the Hosted VoIP service provider via the Internet. The service provider takes care of connecting to the public telephone network to allow calling to and from the customer's VoIP phones. The customer is typically able to manage their virtual phone system through a web interface, allowing them to change call routing, manage voice mail, record greetings, view call reports, etc.

SIP Trunks

SIP Trunks are basically Internet-based phone lines. In the telcommunications world, a 'trunk' usually refers to a standard phone line or to a digital circuit (such as a PRI or T1) that delivers voice service to an end user. With SIP Trunks, the voice service is delivered from the provider to the customer over the Internet. This is often less expensive than traditional phone service, provides some advanced features like Direct Inward Dialing, and is much less restrictive geographically - allowing customers to obtain phone numbers that don't necessarily match their location. A business in Chicago, for example, could have a phone number with a New York area code.

VoIP Phone, IP Phone, SIP Phone

VoIP phones are telephones that are designed to communicate directly over an IP network. They connect to a host phone system over an office or home network like a computer would connect to a file server. Most VoIP phone models even have the ability to share a single network connection with a computer, allowing them to be installed on existing network infrastructure without requiring additional cabling or network switch capacity.

VoIP phones come in two basic flavors - local and remote. Local VoIP phones are installed on the same network as the host phone system and communicate over the Local Area Network (LAN). For new office buildouts, they eliminate the need to run separate voice cabling. They are also highly mobile, meaning they can be moved and connected to any part of the local network without having to be reprogrammed. This can save considerable cost as it eliminates the need for a site visit by a phone vendor when moving employees around within the office.

Remote VoIP phones differ from local VoIP phones in that they connect to an IP network that is different from the network on which the host phone system is located. They then communicate with the host system over a Wide Area Network (WAN) connection. This would typically be the public Internet (most common), a point-to-point T1 or an MPLS network. Once connected, the remote VoIP phone will function as if it were in the same physical location as the host system, even if it is in a different building, city, state or country. This allows direct calling between local and remote office locations (without toll charges) and also allows the remote VoIP phone user to appear to the outside world as if he/she were located at the main office.

Soft Phone

A soft phone is a software-based telephone. It is really a type of VoIP phone and can be used either on a local or on a remote network (see above). A typical soft phone installation requires that the soft phone software be installed on a computer. This is often on a laptop but could be on a desktop computer or a smart phone. The installed software then emulates a phone, allowing the user to place and receive calls using their computer. Audio is typically transmitted using a USB or Bluetooth headset. Soft phones are very popular with professionals who are frequently on the road since they can be used from just about anywhere that has a broadband Internet connection (customer location, hotel, coffee shop, book store, etc.).

Multi-Site Integration

This is a fancy term for connecting two or more phone systems using VoIP technology and a Wide Area Network (WAN) connection (public Internet, point-to-point T1, MPLS, etc.). This allows direct calling and transfers between connected sites without having to use outside phone lines or pay long distance charges. This can create some interesting scenarios, like having your receptionist and corporate staff in Chicago, your support and sales staff in Los Angeles and your distribution facility in Atlanta - each with their own independent phone system, phone lines and voice mail but still seamlessly connected.

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