What is VOIP?

Industry Terminology

VOIP Gateway

VoIP stands for Voice over Internet Protocol. Voice over IP is a form of communication much different than circuit switching because VoIP sends information through IP packets over the internet. Years ago it was found that sending a signal to a remote destination could also be done digitally which brought about the evolution of VoIP. A typical VoIP call uses an ADC or analog to digital converter, then transmits the data over the internet in packets and at the end of transmission formats the data again with a DAC or digital to analog converter. Basically VoIP digitalizes voice in data packets, sends them and reconverts them in voice at the call destination.

The data network involved might be the Internet itself, or a corporate intranet, or managed networks used by local or long distance carriers and ISPs. Who runs the network isn’t important-- what is is the fact that you're taking voice (i.e., analog information) and encoding it digitally, converting it into packets, and then using a data network to move those packets along the most efficient path to their destination, where they get reassembled and transmitted in the format they started in: voice. This way of packet switching is more efficient than the previous way of circuit switching because the information is sent in groups and there is no dead air time. If no one is speaking during a VoIP call then no information is being sent, however with a circuit switching call if no one is speaking you are still being charged for the dead air time on the line.

Advantages of VoIP

VoIP could be applied to almost any voice communications requirement, ranging from a simple inter-office intercom to complex multi-point teleconferencing/shared screen environments.
Widespread deployment of a new technology seldom occurs without a clear and sustainable justification, and this is also the case with VoIP. Demonstrable benefits to end-users are also needed if VoIP products (and services) are to be a long-term success. Generally, the benefits of technology can be divided into the following four categories:

• Cost Reduction. Reducing long distance telephone costs is a good reason for implementing VoIP. Today flat rate long distance pricing is available with the Internet and can result in considerable savings for both voice and facsimile (at least currently). The sharing of equipment and operations costs across both data and voice users can also improve network efficiency since excess bandwidth on one network can be used by the other, thereby creating economies of scale for voice (especially given the rapid growth in data traffic).

• Simplification. An integrated infrastructure that supports all forms of communication allows more standardization and reduces the total equipment complement. This combined infrastructure can support dynamic bandwidth optimization and a fault tolerant design. The differences between the traffic patterns of voice and data offer further opportunities for significant efficiency improvements.

• Consolidation. Since people are the most significant cost elements in a network, any opportunity to combine operations, to eliminate points of failure, and to consolidate accounting systems would be beneficial. In the enterprise, SNMP-based management can be provided for both voice and data services using VoIP. Universal use of the IP protocols for all applications holds out the promise of both reduced complexity and more flexibility. Related facilities such as directory services and security services may be more easily shared.

• Other Advanced Applications. Even though basic telephony and facsimile are the initial applications for VoIP, the longer term benefits are expected to be derived from multimedia and multiservice applications. For example, Internet commerce solutions can combine WWW access to information with a voice call button that allows immediate access to a call center agent from the PC. Needless to say, voice is an integral part of conferencing systems that may also include shared screens, whiteboarding, etc. Combining voice and data features into new applications will provide the greatest returns over the longer term. Videoconferencing also can be greatly enhanced.