The History of VoIP and Business Phone Systems

Voice over Internet Protocol (VoIP) can be defined as “a technology or set of standards for the delivery of telephone calls and other voice communications over the Internet.

May 09, 2017

What is VoIP?

Voice over Internet Protocol (VoIP) can be defined as “a technology or set of standards for the delivery of telephone calls and other voice communications over the Internet.” (Webopedia)  This is accomplished by sending voice data in packets across IP, instead of via traditional circuit transmissions over the Public Switched Telephone Network (PSTN). With a reasonable connection to the internet, phone service is able to be delivered across the internet via VoIP, turning analog signals into digital signals so they can be properly read and interpreted by transmission devices on the Internet.

How VoIP Works:



Adoption of Hosted VoIP

VoIP was developed around 1995 to originally serve as a way to save money on long-distance and international telephone charges. It began with a company called VocalTec, who created the first Internet phone for the masses. Through this InternetPhone, one user could call another through connected speakers and microphone, using the same software.

From 1996 to 1998, VocalTec worked on adding Internet voicemail applications and paired their Internet phone software with Microsoft NetMeeting. Later in 1998, VocalTec came out with computer-to-telephone and phone-to-phone calling features for VoIP. Initially, adoption of VoIP was low – at only 1 percent - in part, because users had to listen to advertisements before, during and after their conversations.

By 1999, companies like Teledvance, the company that would become Smoothstone IP Communications and eventually Intrado, was formed to take VoIP to the enterprise space - with more robust features, capability and reliability. Smoothstone wasn’t forced to rely on gimmicky revenue models featuring disruptive advertising, since the corporate market was hungry for alternative, flexible telephony solutions. The VoIP and network services pioneered by the company exist today within the Intrado portfolio of calling and network services

In the 21st century, telephony equipment companies started realizing the benefits of transferring information over IP – with increases in speed, lower costs and better quality. VoIP capabilities were added into switches, software and other equipment that could integrate with VoIP. The additional development in VoIP-capable hardware and software meant that by 2003, 25 percent of all voice calls were VoIP. Also, the rise in broadband Ethernet service also helped increase VoIP adoption, promoting better connectivity and call quality.

Besides improvements with call quality and call connections, the consumer market started noticing the decrease in costs available with VoIP calling, such as a reduction in fees for Iong-distance calls and no additional per call fees across the Internet. This reduction in costs eventually transferred to additional corporate implementations, even changing the scope of job markets, since employers could now utilize VoIP contact centers overseas.

While Skype officially launched its beta software in 2003 (using its software to call landlines and cell phones alike), its adoption rapidly took off once the company added video chat features into its software in 2005. Nowadays, an increasing number of enterprises are implementing Microsoft Teams for its advanced collaboration solutions that combine VoIP calls, instant messaging, video calls, online meeting capabilities, cloud productivity apps, integrated web conferencing and more.

The evolution of Session Initiation Protocol (SIP) in the early 2000s also led to the adoption of hosted VoIP, as this protocol allowed developers to bypass the limitations of hardware, creating applications that could integrate with almost any phone system. SIP implementations also allow for increased network security across just about any device. SIP trunking provides a path across the internet - instead of the traditional telephone network – to connect the onsite phone system to the Internet, making it easier than ever to deliver hosted VoIP services to companies.

More About SIP Trunking:



The convenience and lowered costs involved with hosted VoIP apps and services has driven the surge towards hosted VoIP adoption. Companies are realizing that they can have access to productivity apps, hosted VoIP contact centers, and so much more, with quick deployment times and ease of use. Trends toward mobility, video conferencing developments involving WebRTC, plus the flexibility of hosted VoIP have made it increasingly popular with enterprises everywhere.

VoIP Performance Metrics

With the infrastructure in place almost everywhere to support onsite and hosted VoIP, calls and communication that run across VoIP generally produce a high quality calling experience. However, there are certain factors that can impact the quality of the VoIP user experience if they are not accounted for and adjusted as needed along the calling pathway.

Top Metrics Affecting or Measuring VoIP Performance

The interruption in digital signal traffic flow. It is often caused by electromagnetic interference (EMI) and crosstalk from other signals. Jitter can cause monitor flickering, clicking in audio, and data loss.

A delay in the amount of time it takes for a packet of data to get from one point to another. The amount of latency affects the usability of communication interfaces or devices. Latency can also be defined as the wait time that occurs when signals are traveling across communications devices that are spread out geographically.

Packet Loss
The failure of transmitted packets to arrive at their destination. The effects of packet loss can include data errors, jitter in video conferences, jitter and gaps in speech in VoIP audio communications, and data corruption. Causes of packet loss can include inadequate signal strength at the destination, system noise, hardware failure, software corruption or overburdened network nodes.

A score used to “quantitatively express the subjective quality of speech in communications systems, especially digital networks that carry voice over IP  traffic.” (TechTarget) The R-value score is used in relation to voice testing processes, with ranges from 1 (worst) to 100 (best). The R-value score is based on the percentage of users who are satisfied with the quality of a test voice signal after it has passed through a transmitter to a receiver.

Mean Opinion Score (MOS)
Scores the quality of a call, with scores ranging from 1 (unacceptable) to 5 (excellent). VoIP calls typically fall within the 3.5 to 4.2 range. (VoIPInfo)

Companies must monitor these various areas of performance to ensure the highest level of call quality and reduce the number of interruptions or dropped calls. Products like Intrado's Maxxis should be put in place at your office to give your enterprise the ability to view and manage the real-time performance and health of your entire network infrastructure.

Cost of Enterprise VoIP Phone Systems

In the same vein that users are not charged to send and receive individual emails, users of VoIP for telephone calls across the Internet are not charged per call, only for their general Internet access and in some cases, long distance charges. Hosted VoIP phone systems often charge per phone line or extension, providing a flexible, operational cost model. There are various features and plans offered depending on the level of unified communications and mobility features desired by the company. Hosted VoIP phone services tend to be more affordable in the long run as capital expenses are reduced with the service provider taking responsibility for hardware and software upgrades. Hosted VoIP is also very flexible, allowing companies to utilize on-premises equipment if desired, in a hybrid setup. To lower your business’s TCO for its enterprise phone system, contact us today to see what the power of hosted VoIP can do for your organization.

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