What is Voip?

By Neil Zawacki
Updated: June 28, 2013

VoIP (Voice over Internet Protocol) has become quite popular with small businesses over the last few years. Many people still don’t know what the technology is, however, or how it can benefit their business.

To put it simply, VoIP is a way to make and receive phone calls over the internet. You don’t need to use the telephone network, and can quickly scale the system up or down depending on the number of employees.

Here’s how it works: the VoIP software digitizes the audio signal into a variable number of packets and encrypts them for security purposes. It then transmits the phone call across the internet until it reaches its destination, at which point it decrypts the packets and reforms the audio signal.

You need a few pieces of equipment in order for VoIP to work. The first is something to speak into and listen to during the phone call – this can be a VoIP telephone, a standard phone with a VoIP adapter, or a microphone and set of speakers. The second is a high-speed internet connection that can handle a large amount of bandwidth—56K dial-up just won’t suffice.

VoIP also requires a computer program to be installed onto your system. This is usually pretty small and can be downloaded directly from the vendor. It will handle all the necessary processes and perform the security encryption. Many of them also provide access to useful functions like an auto attendant, call recording, call waiting, and conference calls.

If this seems complicated, it’s not. Most people can have VoIP up and running at their business in less than twenty minutes. The VoIP software also tends to have a streamlined interface that allows you to quickly access your contact list and make and receive phone calls with a click of a button.

There are also many advantages that make VoIP worth your company’s time. The first is the amount of money saved – VoIP tends to be much cheaper than a traditional phone line. It can also make international phone calls for free (or extremely low rates, in some cases). This provides a major benefit to small businesses that need to contact foreign countries on a regular basis.

One disadvantage of VoIP is that it is not always tied into the 911 service. If you need to dial emergency services, the system won’t automatically send your location to the dispatch service (this is because the phone call is occurring over the internet instead of coming from a fixed location). Most VoIP systems now come with an E911 feature that provides the same capability, however.