December 20, 2023

What is VoIP?

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Key takeaways

  • VoIP is a telecom format where phone calls (and other forms of communication) are transmitted over the internet instead of landlines.
  • VoIP offers a variety of enhanced features and functionality that landlines can’t or struggle to provide.
  • When choosing a VoIP provider, keep in mind details like call volume, international calls, security concerns, and service reliability.

Whenever a voice call to a phone number is transmitted over the internet, you’re using what’s known as Voice over Internet Protocol, or VoIP

That’s it, that’s the whole answer. You’re done reading the article now, and you can return to scrolling LinkedIn, or Reddit. 

Unless, of course, you want to know things like, “Do I need to use VoIP?”, “How do I get started with VoIP?” or, “What should I look for in a VoIP provider?”

If questions like those are still burning, we recommend you keep reading, as you’ll find answers to the same in the sections below.

What is a VoIP phone system?

As mentioned above, VoIP calls are just like phone calls. The key difference here is the communication lines that carry the signal. Old school phones used phone lines, while VoIP transmits over a broadband connection. That’s the long and short of it.

In practical terms, though, there are a number of functional differences between the two approaches. Phone lines are comparatively limited in what they can transmit. VoIP, meanwhile, offers more than just dial tones and answering machines—more on that below. With the right setup, you can even call from, or to, a computer instead of just a landline.

Other advantages of VoIP include advanced, app-enabled functions like call forwarding, call recording, remote access, click-to-dial, and a host of others.

But hold up: How did we get from rotary phones to desktop-powered long-distance calls, anyway?

VoIP history crash course

Once upon a time, nearly every home in the United States had a fixed, permanent phone, referred to as a landline. If it seems odd that we’re explaining that bit, it’s because you’re among the crowd old enough to remember “the before times”, in contrast to those who have never heard the phrase “touch tone phone.” 

Those landlines were, at one point, the only way to contact the outside world without leaving the building. Even once faxes and computers started facilitating more complex long-distance communication, it happened over phone lines. We old timers can still likely recall the siren song of the dial-up connection. 

At some point, though, the dynamic began to reverse itself, and these days, it’s often the phone calls that are carried over internet connections, rather than the other way around. Initially, VoIP systems were more or less identical to landline systems, albeit with some additional equipment to make the proper encoding possible. However, they didn’t stay equivalent options for long.

Major changes were less obvious to those using personal phones. With most individuals and families cutting cords over the years and replacing landlines with a house full of mobile phones, these use cases migrated from phone lines to cell towers, rather than to broadband connections. For businesses, though, VoIP was a huge step forward.

Perhaps you recall the kinds of internal phone networks at schools, call centers, and other sizeable organizations, where you had to do things like “dial 9 to call an external number.” The setup and infrastructure required to make all of that work properly, so calls could be put on hold, or forwarded, or connected to multiple parties, was complex, costly, and finicky. 

Combine that with all of the installations required to enable internet access to team members across the building, and what you had was a logistical nightmare for IT staff. What VoIP did was allow teams to use that internet infrastructure for both. With the right encoders and software, all a team member needed was a phone that could plug into their computer, and they could make calls right from their workstation. No additional phone line required. 

And it only got better from there.

Benefits of using a VoIP system

Ok, internet stuff is cool and all, but what makes it better than a standard phone line, other than needing less setup?

Put simply, VoIP offers quite a few upgrades over what landlines can provide. Even where phone lines can be set up to facilitate similar features, it’s less convenient, more complex, and usually comes at higher cost.

Think of it like the difference between recording a TV show on a VHS or DVR, and streaming it online. Both essentially do the same thing. But one is a lot more handy than the other in nearly every way. 

We’ll dig into some of the specifics down below, but most of the advantages can be boiled down to three primary aspects: lower costs, better features, and enhanced UX.

VoIP achieves lower service costs because:

  • You don’t have to pay for a separate phone line for every staff member
  • You’re not paying separately for phone and internet service connections
  • You’re not paying for distinct phone system hardware, as any VoIP hardware can be integrated into the existing computer infrastructure
  • You’re not shelling out extra for long-distance or international calls in most cases

VoIP also offers better features:

  • Call forwarding (that’s much easier to use)
  • Caller ID and voicemail (of course), plus blocking, call scheduling, call recording, and more
  • Remote access (so you can use VoIP systems from anywhere), remote management, and user access management
  • Voice recognition, voice analysis, and advanced data intelligence

Finally, VoIP provides a better user experience:

  • Easier to set up, easier to use
  • Less maintenance, shorter onboarding time
  • Better self-service education and troubleshooting
  • Remote access, remote troubleshooting, remote maintenance, remote management

Does VoIP have any drawbacks?

Despite these benefits, there are a few potential issues that leveraging internet connections this way introduces to the equation. 

First and foremost, VoIP requires an active internet connection and enough bandwidth to support the throughput. While you don’t need a dedicated line for each user, your usage can exceed your provided access speeds. And you’re susceptible to internet outages and power outages, either of which render the solution non-functional. 

Even when you have a connection, limited bandwidth or unstable connections can lead to poor call quality, dropped calls, high latency, and other interference. Any user connected via a wireless connection is particularly vulnerable to these issues, just as a mobile phone is when driving through tunnels or in dead zones. 

Information security can also be a concern as VoIP is vulnerable to cyber threats the same way any digital data is. A landline has to be “tapped,” or physically monitored via direct access, to be compromised. A network breach can happen from anywhere and at any time.

Finally, there are a few critical phone-related functions that don’t always work as intended when a VoIP is in play. The biggest of these is emergency services. Because calls are routed through servers and networks that could be anywhere in the world, a local 911 dispatch can’t see the origin address when a VoIP call comes in, slowing response times in the event of a crisis.

Ultimately, which solution is right is entirely contextual to you, your team, and your current circumstances. 

How to choose a VoIP provider

Knowing how to find a technology provider that won’t be a wasted investment is best practice for any business. To make sure you’re making the best decision, evaluate providers based on how well they match your needs for customer service, pricing, integrations, support and setup, and so forth.

When comparing VoIP providers, there are only a few aspects that are unique to this particular vertical, with the biggest concerns being:

  • Required call volume—you’ll need a provider that can facilitate all of the simultaneous calls you be making
  • Geographical boundaries—while “long-distance” doesn’t mean much anymore to most phone users, it can still apply to businesses, even those using VoIP, with international calls carrying the greatest potential costs
  • Uptime—as mentioned above, VoIP doesn’t function without internet, but it also doesn’t function without the vendor’s system being online, so the reliability of both are major factors
  • Security—not all calls traffic sensitive information, strictly speaking, but some do, and not all vendors offer the same level of security and privacy safeguards

Beginning your search

Even with a clear set of requirements in mind, sifting through all of the available providers can be daunting. Here are a few of our picks for leading VoIP providers, and the demographics who might find them the most useful.

ringcentral logo

RingCentral boasts, among other features, industry-leading HD video conferencing. For teams and organizations that are looking to get as close to “in-person” as possible via remote connections, RingCentral is one to look at.

Nextivareviews

Nextiva is a VoIP provider that prioritizes support for decentralized collaboration. With virtual workspaces, video conferencing, mobile connectivity, customer intelligence, and a whole lot more, Nextiva can help alleviate the pain points of “anywhere operations.”

Grasshopper reviews

One of the biggest selling points of VoIP is how it can put enterprise-style tools in the hands of much smaller teams. With automated answering systems, live secretary services, and a variety of other features, Grasshopper helps growing teams easily supplement their current staff and tools, earning the same level of consideration as much larger brands.

Is a VoIP solution right for my business?

Not every organization necessarily needs a VoIP system or provider, just like not every business needs a landline. In some cases, a single landline or even several can meet the requirements of the use case. 

That being said, as most organizations scale, they inevitably run into the issues of complexity and cost that come with landline-based phone infrastructure. This is especially true for larger teams where every staff member needs a dedicated line (e.g. call centers, sales teams, customer support, etc.).

Since VoIP consolidates all communication to a single medium, organizations can avoid spending additional resources on a separate telecom service. And, since most VoIP software consolidates voice calls with functions like messaging, video calls, file libraries, and more, it can remove productivity roadblocks.

With the rise of generative language learning models, AI-powered analytics, and other significant advances in computer technologies, it’s hard to imagine landlines genuinely competing with VoIP for much longer. There may be a few fringe use cases that are better served by landline phone systems, but for just about everyone else, VoIP will likely be their telecom solution of choice sooner or later.

FAQs

VoIP is Voice over Internet Protocol, a method of transmitting phone calls (as well as video, text, file sharing, and more) over the internet rather than via landline.

While some use cases are better served by dedicated landlines, VoIP is quickly becoming the default telecom service model for most organizations due to its lower costs, minimized complexity, and enhanced functionality.

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