How VoIP Technology Works and How To Use It

Understanding VoIP technology is a vital part of modern business. Current trends are steering away from PBX and moving towards mass adoption of VoIP technology.

Communication should be a priority in your technical infrastructure at all times. The lack of an effective communications strategy imposes a significant impact on the success of all other projects within an organization. As you can see we’re passionate about communication and believe VoIP is the go-to solution for today’s fast-paced environment.

In this article we will help you understand the inner workings of VoIP tech including what VoIP is, how it works and how to use it in your business.

What is VoIP?

VoIP stands for Voiceover Internet Protocol. It is also known as IP telephony. The basic premise of a VoIP network is to send communications, both voice, and multimedia, over an Internet protocol network instead of an analog phone line.

Contrary to popular belief, you do not have to employ cutting edge infrastructure in order to take advantage of VoIP technology. Businesses of all sizes and budgets can enjoy the full spectrum of VoIP benefits with nothing more than a good commercial quality Internet connection.

You can also use VoIP services alongside traditional PBX (landline) phone services. Many small businesses make use of a “hybrid” configuration because some VoIP companies do not offer features like:

  • 411 service
  • 911 service
  • Directory listings

Depending on the plan that you choose, the VoIP provider may not give you a number of other common phone services as well.

What are the Basics of VoIP?

In order to use VoIP for voice and multimedia communications, your hardware must be changed or modified from an existing analog system to a digital system. These system changes can easily be achieved with new hardware or if you can use an Analog Telephone Adapter (ATA) that runs separately. An ATA is a viable option if you are connecting from an analog phone.

If a VoIP uses an ATA, then it goes through five phases before it reaches the VoIP phone services provider. These stages are as follows:

  • Analog phone
  • ATA
  • Ethernet router
  • Internet
  • VoIP service provider

If the VoIP system is using an IP phone, it progresses through the following stages:

  • IP phone
  • Ethernet
  • Router
  • the Internet
  • VoIP service provider

A VoIP business phone services provider can also be connected directly to a VoIP user unless the devices being used are hooked up to NAT routers. In this case, the sequence of events goes as follows:

  • IP phone
  • Ethernet
  • Router
  • Internet
  • Second router
  • Second IP phone

What Applications Can Integrate with VoIP?

VoIP usually has the ability to run most traditional telephony applications, meaning that it can be used as an outbound call center infrastructure or for inbound IVR applications. Other popular business applications can also integrate with your VoIP system. These applications include:


  • Salesforce
  • SAP
  • Zoho CRM


  • Mailchimp
  • Hubspot


  • QuickBooks
  • Paypal
  • Stripe

Customer Support

  • ZenDesk
  • Zoho
  • FreshDesk

What are the Reasons to Use VoIP?

Depending on the scale of your business and the communications structure that you need, the reasons to use VoIP can be very different. However, there are two big reasons that VoIP is trending over traditional PBX and PSTN communications. Let’s explore these reasons in further detail below.

Cost Advantages

The first reason to use VoIP is its low cost when compared to traditional telephony systems. These costs are lower across the board, because traditional telephony is dominated by monopolies instead of competing companies, including government entities. The ability to carry multimedia, data and voice communications over a single network provides huge cost savings. Users who are not utilizing their full network capacity have the ability to save even more money, because they can employ VoIP without added hardware costs.

More importantly, for most users, all phone calls can be interpreted as completely free – even international calls. The only cost comes from using the Internet service itself. There is actually no charge for making the call over the network.

Increased Functionality

The second reason to use VoIP is increased functionality. Even with lower costs, the VoIP network gives users more utility than traditional telephony infrastructure. VoIP also makes certain aspects of communication much easier than PBX lines. In fact, some of the functionality VoIP provides is impossible to achieve on traditional landlines. Let’s take a look at some of the most important functional VoIP benefits.

Routing incoming calls – With a VoIP system, incoming calls are routed automatically to your VoIP phone. As long as you have the phone with you and you can connect that phone to the Internet, you can take any incoming call that you want.

Salesmanship – Because VoIP phone works from anywhere with a great Internet connection, call center agents that are using these types of phones have the ability to work anywhere. VoIP tech has added greatly to the ability of workers to function remotely.

Compatibility – The modern VoIP system provides more flexibility to hardware infrastructure as a whole, not just individual users. One of the major advantages of a VoIP PBX system over a traditional PBX is the ability of VoIP to work with a wider selection of hardware. With VoIP, companies no longer have to concern themselves with the proprietary contracts that some telecommunications providers force clients into when they do not have the flexibility of a VoIP system.

How Does VoIP Work?

The short answer: VoIP converts communications over an IP network into packets of data, sending those packets out over the network. Because of the way the data is routed, you do not need a traditional phone in your home or business in order to use VoIP as calls are directed over the internet.

The answer above is technically correct, but there is more to the story if you dig deeper.

VoIP gives the user the ability to combine Internet and phone services. It is easier to scale because of its infrastructure, and it is compatible with many of the new features that are being created for communication clients by third-party app developers.

VoIP functions over an IP network. All data that comes through the network is finally stored in the cloud. All settings associated with this data are immediately accessible through a digital user interface application or universal online dashboard.

The dashboard for a VoIP network gives the users access to data that they store there, including client information, contacts, and phone numbers. Users also have the ability to add new phone numbers and set up call settings. All of this functionality is available in a traditional office or on mobile hardware.

This is the explanation from a customer-facing perspective. If you want a deeper technical understanding of how VoIP works, read on. The description below will help determine if you have the specs to use a VoIP network in your current business environment.

VoIP systems do not use any sort of hosted PBX system or any other kind of PBX system for that matter. PBX stands for ‘Private Branch Exchange,’ and it means a telephony system runs from a private system instead of the cloud. VoIP functions across your Local Area Network (LAN) and moves data to the servers that are owned and managed by your provider.

If you have a digital device – like a laptop, a phone or a tablet – you can begin the process of VoIP routing. These devices are known as ‘SIP-enabled,’ (which stands for System Integrity Protection). The VoIP system can connect to a Public Switched Telephone Network (PTSN) or a SIP device. Before this happens, the data must travel through the router that is connected to your LAN network.

The router is a very important part of the day to day use of a VoIP device. The traditional telephone system connects your phone to the system through a copper line that is also likely taken through a server that may be in your office or off-site.

From there, the entire communication occurs in the cloud. Because the data that you send does not stay in your proprietary reach for very long, the need to create an infrastructure on-site is greatly reduced.

In a VoIP system, your router will connect to the Internet platform that you have chosen. It will access the IP network that your ISP (Internet Service Provider) works with. At this point, your VoIP platform has the ability to access the majority of digital device types for the purpose of communications.

VoIP is truly amazing because of its instant adaptability and device flexibility. For example, you choose from a bevy of mobile devices, but you can also use VoIP softphone enabled desktop devices such as your home computer or tablet.

A major reason that VoIP is gaining traction in the world of business is its ability to give its clients remote access to central hub offices. Many offices are transitioning to work schedules that are not quite so traditional and requiring more travel from their employees. With VoIP, these companies are able to stay in business while expanding their reach and ability to operate across the world.

What is SIP Trunking?

The SIP is another vital piece of the VoIP puzzle. You may be a part of a company that wants to keep an on-site PBX for some reason. If so, SIP Trunking is likely a part of your infrastructure. In essence, SIP Trunking then becomes the direct pathway to your VoIP provider, sequestering its own space within your infrastructure.

SIP trunks collect the information that comes from the service provider PTSN. It funnels the data in the same way as other VoIP connections. Hardwired into the server that is likely right beside the PBX, the trunk is actually a switch that filters your data as it funnels it through.

In many cases, it allows all of a company’s voice communications to move to a separate line. That line is fully dedicated to your company, only your data moves through it. In suh cases, the main LAN network would be 100% available for other business processes.

What are the Major Features of a VoIP System?

While VoIP systems have many different features its important to be aware of the major features associated with VoIP tech. Let’s discuss these features in further detail below.

Call forwarding – Clients can move a call from a laptop to a smartphone to a tablet and back again with no trouble. This feature makes it easy to move a conversation from an office to a transport location, and it is very important for most companies to have.

Call parking – Parking a call is putting that call on hold. You may need this feature so that you can preserve a call before moving to another location or so that you can pick it back up again on another VoIP connected device.

Voicemail to email messaging – One of the features that is growing quickly is a transcription service that allows the user to move a voicemail message into an email transcript. Voicemails are not often able to be accessed as immediately as emails, so this feature speeds up communication for people on the go.

Auto-attendant – This is a feature that works well for small businesses that cannot afford her receptionist. The auto-attendant is a message that presents an options menu and greets callers. If you are part of the company that has many departments to consider, the auto attendant can make it much simpler for customers to access the appropriate person in your organization.

What Makes VoIP Work?

VoIP is such an innovative technology because it has innovative technologies that make up its component parts. The five major components of VoIP include codecs, IP phones, softphones, ATA adapters, and packet switching.


Codecs are small pieces of hardware or software that are built straight into a modem or remote access through an adapter. They have one job – to convert your voice messages into data. As you are speaking your message into your device, your voice moves through the IP network and is decoded by the codec into data. This data is converted back into audio once it hits the destination.

IP Phones

The IP phone has the ability to connect to the Internet through ethernet or Wi-Fi while maintaining all of the functions of a traditional phone. IP phones do not make calls through copper telephone lines. Rather, they send and request information through the IP network that is connected to it. One of the top characteristics of these phones is that they can easily access all of the features mentioned above in the “What are the Major Features of a VoIP System?” section.


The softphone is a software package or application that gives your other digital devices the ability to make calls. If you install a softphone app into a tablet, desktop or laptop, it basically becomes an IP phone. If you have ever made a call using Google Hangouts or Skype, then you have made a softphone call.

ATA Adapters

ATA stands for “And alone Telephone Adapter,” and usually comes in the shape of a box that looks like a modem. Companies will usually an ATA adapter from the service provider. It connects to a router or modem and performs the same function as an IP phone – basically converting voice into data and moving that data through the Internet.

Packet Switching

When a codec changes your voice into data, that data is then segmented into hundreds of thousands of smaller chunks called “packets.” Packets are moved to the end destination and are reassembled at the point of the communication. They may take different directions in order to keep from clogging the data line, and the process of sending them across the data line in an organized fashion is called packet switching. Codecs and packet switching are dual functions that work in tandem to make successful VoIP calls.

Now that you know the basics of VoIP technology, it is time to look into whether this technology is right for your company. In most cases, it is. You get increased functionality with more cost-efficient plans and less responsibility for hardware maintenance. You also future proof your company by ensuring that your communications infrastructure remains compatible with the technology of tomorrow. These are just a few of the advantages of a VoIP system.

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