What Is Voice over IP? A Look at VoIP in Business

What is the technology known as voice over IP? And beyond that, what are the advantages of VoIP? The baseline definition might not sound too exciting — telephony service delivered over data instead of a dedicated voice line, such as a landline private branch exchange (PBX). But its ability to cheaply replace the analog standards it outpaces and serve as a dedicated piece of the larger communication/collaboration toolbox certainly is. Its flexibility, value, and scalability make it a major industry unto itself, too, with some estimates claiming the technology's overall market size will grow to $55 billion in the next five years — up $35 billion from 2018.

It only makes sense that the advantages of VoIP show the most luster in a corporate environment, with businesses being major consumers of the legacy phone systems VoIP now supplants. Organizations running the gamut of sizes and industries have moved to the technology thanks to its enticing combination of cost savings and reliable service, and it will only grow from here. Read on to learn more about a communication tool all businesses should familiarize themselves with.

The Advantages of VoIP: Early History

There was a time when phone lines carried the internet, not the other way around. While it might seem strange that the first VoIP tools were created when most users were still on dial-up, VoIP didn't bring phone service to the internet "just because." Instead, the tools offered an affordable alternative to costly long-distance and international calls.

The earliest takes on this concept look little like the high-powered voice over IP tools businesses can access today. Early VoIP only worked online and required both the caller and the recipient to have the same software installed for communication to be possible. This meant, among other things, a landline couldn't call a VoIP line. While useful enough, the lack of capability essentially meant the technology wasn't fully there yet, and thus wasn't ready to be the dominant force in business communications it is today.

Over time, things have naturally gotten better — a lot better. Modern solutions are effectively indistinguishable from legacy PBX, and the cloud-based backend makes it even easier to tailor the system to the user's specific needs. Businesses that need to purchase a book of numbers or add features, for instance, can access an online portal to alter their service, with no need to wrangle with the phone company's interactive voice response (IVR). This means shorter waits, better functionality, and better cost — a trio of advantages of VoIP any business can use more of.

A Superior Communications Tool

For businesses, governmental agencies, and other organizations with moderate-to-complex phone needs, all this innovation couldn't have come at a better time. Installing, managing, and paying for a PBX (or similar wireline service) can be costly. The challenges grow as the business does, especially where branch offices and other examples of business distribution are involved.

By comparison, VoIP — to borrow the famous phrase — "just works." Nowhere is that more true than the distributed workforce, where the medium's flexibility and capability make it several strides better than legacy phone service for businesses' many work-from-home schemes. With VoIP, almost anyone with an internet connection can loop into the larger business's phone service. Businesses with complex needs such as unified communications services, meanwhile, can use VoIP as a backbone for numerous services, such as a sales branch using on-the-go capability to "forward" their desk numbers to their mobile phones while they're away from the desk.

For an expanding business, the advantages of VoIP could translate to enterprise-level phone functionality or expanded international calling capability at a fraction of PBX's cost. On the other hand, a larger organization could use the same voice over IP tools to centralize their billing and support needs, freeing them from a tangled web of regional providers.

Voice Over IP and Business: A Good Mix

VoIP's advantages have only grown with the advent of cloud technology. Where local business VoIP systems may necessitate hardware expenses and baseline technical knowledge, a cloud-based VoIP provider handles much of the heavy lifting: They host the hardware, manage the call quality, and handle the technical problems. It's a big step forward, and one with positive implications for businesses everywhere. Adding features and numbers becomes as easy as accessing a web-based portal, and reducing costs becomes easier with less need for on-site hardware and human maintenance.

To that end, VoIP does a lot more than placing calls over the internet, though that's obviously a large part of the allure. Companies looking to modernize, simplify, or secure better technological footing for the future should make it a point to examine the technology now.

Evan Wade
Evan Wade Contributor

Evan Wade is an author and editor from Carmel, Indiana. As a veteran tech writer and lifelong tech enthusiast, he focuses his writing and research on communication, mobility and security. Alongside work with leading cloud technology providers and industry news sources, Evan has extensive sales and end-user marketing experience, giving him a unique view of the individual’s relationship with technology — and how organizations can realize huge benefits from it.

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