History of VoIP Technology

By Ryan Ayers
Updated: March 28, 2011

Although it has been in existence since the mid-1990’s, Voice over Internet Protocol (VoIP) has only taken hold as a standard form of communications in business and home markets over the last several years. As technology has advanced and more functional, less expensive equipment has been developed, VoIP has become a viable and reliable communication solution.

Necessary Components

In order for VoIP technology to function, it needs two separate components: a VoIP capable phone or device, and an Internet connection. While this seems like a fairly straightforward set of requirements, in practical terms it meant that technologies had to be built in each of these different areas. Early attempts at functional VoIP communication solutions were hampered by aspects of both of these components.

Early VoIP

As early as 1995, there were companies that were offering “Internet phone calls”. These early attempts used personal computers and specialized software that needed to be present on both ends of the call in order for the call to be completed. The computers attempting these calls needed to be equipped with a sound card and microphone, as well as a reliable Internet connection.

The problems with this system were twofold:

  • Each caller needed specific technology to place and receive calls
  • A reliable, efficient, and rapid Internet connection was necessary

Both of these issues presented problems. Particularly problematic was the fact that Internet technology was not sufficiently advanced at this point to allow for the rapid and consistent exchange necessary to maintain call quality and consistency.

VoIP Takes Root

The exciting thing that came out of those early attempts at VoIP calling was that the seed of the idea was planted and technology began to emerge that addressed these early problems. By 2000, VoIP communications made up over 3% of all voice traffic in the United States. By 2004, there were already several companies that had begun mass marketing VoIP technology toward home based users using either software based IP phones, adapters for traditional telephone lines, or IP telephone hardware.

Soon after, business began to take notice as providers of service and equipment raced forward with new technologies designed to allow businesses to cost effectively create telephone systems that offered comprehensive communication solutions. As data networks and hardware designed to improve connectivity has advanced, VoIP has flourished and taken root as the new form of telephone communication.

VoIP Today

Today’s communications needs, whether for business or home use, are increasingly being met using VoIP systems. Because of the multitude of applications and features available to increase connectivity and productivity, and the cost effectiveness of most service packages, the general public has adopted VoIP as a communication solution.
 

Featured Research
  • 2017 Business VoIP Features

    If you’re considering an investment into a new VoIP system (or upgrading an old one), it’s important to understand what features are available and which ones your business will actually need. Especially if you want to keep costs at a minimum. more

  • What To Do When Your VoIP Contract Expires

    Automatically renewing your VoIP contract is a mistake. The VoIP landscape has been changing rapidly, and it pays to review all of your options before committing to another contract. more

  • VoIP Brings Big Benefits to Small Businesses

    If you run a small to midsized business and you're still relying on a traditional phone system, you need to rethink things. VoIP offers most businesses, regardless of the size, huge benefits. For small businesses, it unlocks the opportunity to have an enterprise-level communication system without the traditional expenses. more

  • [Infographic] How UC Can Improve Employee Productivity

    If you’re interested in a straightforward way to improve the productivity of your employees, it's time to consider adopting a Unified Communications (UC) strategy. more

  • How to Cut VoIP Costs Without Losing Features

    No matter how long your business has been around, when given the chance to cut costs without compromising important business processes, you make it happen without a moment’s hesitation. more