Revolutionizing business communications: A comprehensive guide to VoIP technology
What is VoIP? (VoIP meaning)
Voice over Internet Protocol (VoIP) is the use of Internet Protocol for transmitting voice communications. Internet Protocol is a network-layer communications protocol for relaying datagrams across network boundaries.
Voice over IP delivers digitized audio as data packets which can be transmitted over intranets, extranets, and the internet.
VoIP differs from traditional phone systems since it uses an internet connection to make or receive phone calls. With VoIP, if you call a landline, the data packets are converted to a regular telephone signal. It allows you to make a call from a computer, a VoIP phone, or with a traditional phone connected to a special adapter.
How does VoIP work?
When calls are made using VoIP, the data is converted into digital format and sent through codecs. Codecs are computer programs that compress and uncompress audio or video. VoIP codecs use either proprietary or open-source algorithms.
Some VoiP phones plug directly into a broadband connection, which makes them function like traditional telephones. With VoIP you can call landlines, mobile phones, or make calls from one computer to another. Since VoIP uses common standards for how digital information is encoded, it can communicate with any device that uses Internet Protocol.
Traditional phone systems require circuit-switching to maintain a constant two-way connection. Since VoIP uses packet switching, data packets are sent only when someone is speaking. Because circuit-switched networks aren’t needed, it reduces the network infrastructure costs that accompany traditional phone. service
Learn more about Microsoft Teams VoIP
How businesses benefit from VoIP
VoIP also offers more flexibility since businesses can easily add, move, or change phone extensions or locations. Because VoIP technology uses an internet connection, employees can connect to it wherever they work—in the office, from home, or while traveling domestically or internationally.
Another benefit for businesses is that some VoIP service providers offer features that aren’t available with a traditional phone, such as call recording, voicemail to email, custom caller ID, call queue management, automated attendants, advanced call analytics, and customer relationship management integration. However, such premium features often come with additional fees from VoIP providers. Unified communication solutions like VoIP make it easier for employees to collaborate through voice, chat, web conference, and instant messaging. Businesses that use VoIP also typically have only one network to manage.
Some of the benefits of VoIP include:
- Cost savings. The total cost of ownership of VoIP is lower compared to traditional phone bills.
- Quality sound. When call data is uncompressed, audio quality is comparable, if not better, than other voice solutions.
- Customizable features. Some VoIP providers offer call recording, custom caller ID, voicemail to email, and other customizable features.
- Lower international rates. Since VoIP doesn’t require a wired telephone line, it’s treated as normal internet traffic and doesn’t incur any additional cost.
Learn how Microsoft Teams VoIP Business Phone Services work
Enable a smart workplace with Microsoft Teams
Potential challenges of VoIP
Compression reduces bandwidth requirements, but voice quality can suffer. However, since broadband transmits wide bandwidth data over high-speed connections, the likelihood of compression affecting voice quality is low. Also, if you use a private network, a method called quality of service prioritizes voice traffic to maintain audio quality.
For services that require VoIP devices (such as VoIP phones), power outages may prevent some services from working. This is likely to be a rare occurrence, but it is something to keep in mind.
Some VoIP service providers don’t offer directory assistance or a way to connect to emergency services.
Conclusion
VoIP has grown in popularity since it is easy to set up and offers cost savings over conventional phone networks. Because the benefits outweigh the challenges, it’s a good alternative to a traditional phone system.
To set up a VoIP system, start by installing front-office devices (phones, converters, and software). Businesses must also install VoIP gear to replace their conventional phone network. After both steps are complete, the new software and hardware controls how the VoIP devices connect with any existing IT system.
Learn how Microsoft Teams Phone can help
The Microsoft 365 team is focused on sharing resources to help you start, run, and grow your business.
Get started with Microsoft 365
Related content
Six Generative AI Benefits for Small Businesses
How to Use AI to be More Productive and Efficient at Work
AI and productivity: How to use AI tools to improve the employee experience
A guide to Agile DevOps for SMBs
Business Insights and Ideas does not constitute professional tax or financial advice. You should contact your own tax or financial professional to discuss your situation.
Follow Microsoft 365