Tutorial: Voice over IP (VoIP)


What Is VoIP

VoIP, Voice over IP, stands for Voice over the Internet Protocol.   In VoIP, voice calls are packetized to allow the voice traffic to “ride over” the organization’s data network.  This eliminates the need for a separate voice network with its dedicated voice circuits, thereby saving resources and costs.

The enhanced functionality and attractive pricing of VoIP offerings is encouraging many consumers to migrate to VoIP services provided by their cable company or VoIP telephony companies such as Vonage.  You may already have a VoIP-enabled phone on your desk at work, too, as many businesses are adopting VoIP to replace their antiquated phone systems. Traditional business phone systems tend to have expensive proprietary interfaces and offer little flexibility for important business communications requirements such as disaster recovery.

VoIP’s use of the Internet Protocol puts it firmly in the realm of data networking. However, most systems and devices that use the Voice over IP protocol must support features and functions found in traditional telecommunications systems. Thus VoIP represents the convergence of voice and data.


History and Standards

While Voice over IP has taken off rapidly in the last several years, convergence of voice and data has been around for many years in one form or another. Voice over IP started in the early 1990s with “point to point” applications used on a multi-media PC between two parties over the Internet. H.323, a standard for these applications developed by the International Telecommunications Union (ITU, www.itu.com), enjoyed relative success in the market.  As businesses looked to adopt VoIP for their corporate phone systems, more complex capabilities were required.   Session Initiation Protocol (SIP), a standard developed by the IETF www.ietf.org several years back, has now emerged as the de facto VoIP standard for telecommunications carriers, software vendors, and equipment manufacturers for both consumer and corporate systems.


Historical Milestones

1950s  Long distance phone calls and mainframe computers

  • U.S. nationwide long distance dialing introduced in 1949
  • AT&T owns home private lines through “Bell Operating Companies”,   long distance lines, all business phone lines, and the manufacturing of all the telephone equipment
  • Mainframe computers introduced for large financial institutions with proprietary terminal equipment

1970s  US Government files lawsuit to break up AT&T; Internet Protocol gains acceptance

  • 1969 – ARPANET creates first packet-based network (first used for research sharing between universities and grew to government, military, and military suppliers in 70’s)
  • 1974 – U.S. Government files anti-trust lawsuit against AT&T
  • Mid-70’s the Internet Working group is formed; by late 70’s ARPANET is widely used for data and file sharing
  • 1979 – CompuServ, a commercial e-mail and information sharing service, goes online

1980’s    Break-up of AT&T completed; personal computers Introduced

  • 1984 – court decision to split AT&T, the Regional Bell Operating Companies, and equipment manufacturing into separate companies to introduce competition
  • Personal computers introduced on the market and first networks between these by Novell, Banyan, and other networking companies come into being
  • Late 80’s and very early 90’s – widespread adoption of TCP/IP networking by major corporations to implement standardized networks

1990s and 2000s

  • 1996 telecommunications act seeks to stimulate competition by allowing cable companies to offer telephone service and long distance providers to offer local service
  • Cisco enters voice market by purchasing a VoIP equipment manufacturer; in the late 1990s, other equipment manufacturers, such as Avaya and Nortel respond with their solutions
  • “Software-based” solutions, such as open-source Asterisk software and Microsoft-based Interactive Intelligence, gain market acceptance
  • In the early 2000s, first widely accepted standard for VoIP networking, called SIP, is adopted by all major manufacturers and VoIP phone service providers


Why VoIP?

Traditional telephony uses a dedicated circuit per call. This means that distributed organizations must install a lot of expensive equipment while still being subject to a limit on the numbers of calls that can be distributed to alternate sites.

Traditional telephony also requires the operation and maintenance of a separate voice network with its own equipment and personnel, in addition to the organization’s data network.  Obviously, if the voice traffic can utilize the existing data network, that would lower the cost of both hardware and personnel.

Also, traditional telephone systems tend to use proprietary interfaces. This “vendor lock-in” makes equipment and business communications applications extremely expensive to buy and maintain. The widespread adoption of VoIP standards holds the promise of a ubiquitous network for voice and data.

VoIP is now a mainstream technology adopted by approximately 75% of all companies purchasing new phone systems.   Adoption of carrier circuits by individuals is also growing rapidly.   Due to the dramatic savings that can be achieved by the elimination of dedicated voice circuits in a wide area network, the early adopters of VoIP tend to be distributed organizations such as banks, retail, and universities.


Principles and Operation

As mentioned earlier, voice conversations in VoIP are “packetized” and sent on a data network using the Internet Protocol (IP).   Incidentally, that does not mean that the Internet itself is necessarily used for the transmission of this data, only that voice is carried on a data network using IP. Traditional telephony uses a dedicated voice circuit or “channel” per call and transmits calls to other devices using a voice signal on that channel. By using “packets”, many calls can be sent on the same data circuit as long as appropriate data bandwidth is present to handle the overall traffic.

In carrying both voice and data on the same network, allowances must be made for the real-time nature of voice, or the call quality will suffer.  With most data applications, small delays are acceptable.  With a voice conversation, delays can be heard by the parties on the call and affects the quality of conversation.   However, the technology has evolved to the point where, with good planning and design, it is possible to achieve high-quality voice conversations on the data network.   For example, using the “quality of service” criteria as a guide, data routers and switches can optimize the flow of various kinds of data traffic within the available bandwidth, allowing the voice packets higher priority as needed.  Most organizations assess their data network and upgrade appropriate components and bandwidth prior to a VoIP deployment.   More information on the quality of service and other network design considerations can be found in our free CxO 5 Minute VoIP Guru Guide.


Strengths and Weaknesses

VoIP offers many advantages over traditional telephony.  Many of these stem from the fact that logical networking rather than dedicated circuits can now be used to transport conversations.   For example, users and their devices can be located anyplace on the data network and have access to both their phone calls and their data applications.  Previously, dedicated and separate phone circuits had to be present to handle the voice.  VoIP also works on a wireless data network, making mobility much easier.

One of the drawbacks of VoIP in the short term is that it requires expertise in both voice applications and data networking. IT experts with knowledge of both fields are not easy to develop.  There is a learning curve for data experts to master the features and functionality expected by their new telephone users. On the flip side, voice experts must become proficient with the unfamiliar data networking concepts and techniques.


Business Implications and Applications

The early adopters of voice over IP were highly distributed organizations that already rely heavily on wide area networks for their data and therefore also had significant bandwidth available between sites as well as reliable data networks.   Maintaining a separate voice network is expensive and offers little flexibility for routing call traffic among multiple sites due to the requirement for dedicated circuits.   Banks, retail organizations, and universities have all been widely moving to VoIP to save money on circuits between sites and route calls more flexibly.

Most distributed organizations want their “phone system” to operate as one virtual system. VoIP-enabled phone systems, often called IP PBX’s, are architected using a software model offering redundant processing, clustered operation, and standardized directories.   Business communications now appear to callers and users as one large system, independent of physical sites, just as the data applications do.

Both single-site and distributed organizations gain significant business advantage by moving to Voice over IP.   One big advantage of VoIP is that it uses a “logical” connection to the network rather than a physical circuit. This means that users can move about the network without the administrator having to make physical moves, additions, or changes.   For some companies this can mean dramatic savings in system administration costs.   Due to the “software approach” of many VoIP systems, system administration is greatly simplified and sometimes streamlined with standard company directories such as Microsoft’s Active Directory and LDAP-based directory systems.

One of the “killer apps” for VoIP is disaster recovery.   Companies who maintain redundant networks and have disaster recovery options for their data can now use that same style of redundancy for voice communications.   Phone systems using VoIP are architected with a software model and offer redundancy and clustered server options. In a traditional telephone environment, if a dedicated circuit or set of circuits are not available, it takes as much as thirty minutes for calls to be re-routed.   And for back-up capability, physical circuits, hardware cards, and expensive systems must be in place.   With VoIP there is some requirement for additional hardware and bandwidth, but systems using a software approach offer disaster recovery back-up options that are much less costly.   Also, using the standard protocol of SIP, calls can be instantly redirected. Users can also log in from any location on the data network and have phone service.


How to Learn More about It

Courses and Tutorials

  • Communications, systems, and software engineers; network, IT, and marketing/sales professionals; technical or strategy managers or consultants, and others who plan to evaluate, design, build, or work with VoIP networks, applications, and services will benefit from the 2-3 day course on   VoIP: Protocols, Design, and Implementation.
  • Those interested in the security ramifications of VoIP, for instance network-security planning teams, network administrators, IT and telecom engineers, IT security management, crime prevention/investigation officers, and homeland security personnel should take a look at the 2-day VoIP Security course.


  •  VoIP for Dummies by Timothy V. Kelly and Philipp Fockeler, May 30, 2006
  • Hacking Exposed: Voice Over IP Security Secrets & Solutionsby David Endler and Mark Collier, November 28, 2006
  • Practical VoIP Security by Thomas Porter and Jan Kanclirz, Jr. March 30, 2006
  • Newton’s Telecom Dictionary by Harry Newton should be in every IT organization’s library and on every engineer’s desk who will be involved with a VoIP rollout   The dictionary is updated regularly with new terms and industry issues.

Web Resources

  • http://www.itu.int   International Telecommunications Union is the standards body for H.323, the older VoIP standard that is still used in some equipment and software.
  • www.ietf.org    IETF is the international standards body for the Session Initiation Protocol (SIP) standard.
  • www.voip-info.org   Great resource for finding vendors and events as well as for general information.
  • www.eweek.com   Good source of news on VoIP technology and providers


  • www.tmcnet.com    Internet Telephony, aimed at a wide variety of audience ranging from enterprises and carriers to contact centers
  • www.von.com  VON Show, focused largely on the carriers