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How Does VoIP Work? Can It Save Me Serious Money?

How Does VoIP Work?

One of the most frequently asked questions I get is “E-Dude, how does VoIP work and what exactly IS VoIP?”

Ok, I'm going to keep this very simple, very basic.

The existing analog or digital telephone technology most businesses use today to communicate is pretty similar to VoIP in the way it sounds to the human ear, and maybe even basic functionality, but there the similarities end. So it's only good business when selecting a new technology, especially if you're expecting free internet calls or cheap phone service to ask the question, how does VoIP work?

First off, it cannot be assumed that a business VoIP phone service deployment will sound “toll quality” or as good as a regular wire line call, but this is a subject of another article. Click here to read up on VoIP problems.

By the way I can help with this, Contact E-Dude Now!

Yeah, But What EXACTLY Is It?
How Does VoIP Work?

So Voice over Internet Protocol is essentially taking your voice and making a phone call by turning it into bits and bytes (ones and zeros like this 1110001010011001010010)

We then place these in Internet Protocol (IP) Packets and transmit it over the wire to the internet or perhaps another more private network like a Local Area Network (LAN) maybe in a large building or campus environment, or Wide Area Network (WAN) that is perhaps connecting multiple branch offices together.

So your voice arrives at the other end and received by the other caller using their internet connection, although again sometimes it might be using a LAN or WAN.

Have I anwsered the question how does VoIP work yet? If not, read on.

OK, Now That I Know How VoIP works
What Other Stuff Is Important?

The tremendous business advantage of VoIP is that generally you can use an existing internet connection (or a somewhat beefed up one) or MPLS WAN to transport most if not all your voice data, thereby dropping the phone lines.

Additionally long distance charges are many times greatly reduced, or provided for on a capped or "unlimited use" basis per line. Heck, if you're willing to put up with doing all this from PC to PC using soft phone software, you can even erase long distance charges altogether and get free internet calls!

Lastly, we have the ability to start to "converge" the communications platform, voice with data, voice with Instant Messaging or video and other Unified Communications (UC) options. If we're doing this between branches, we pay only for the cost of the WAN.

So we have a number of basic hardware and / or software devices required to do low rate VoIP or do free internet calls. We won't do a deep dive here, as I have an entire section devoted to VoIP Devices But here are the basics.

Analog Transfer Adapter (ATA) – this is a small device that is used to let your standard analog telephone (like the ones you probably already have all over your business and your home as well) work with VoIP. Used only with a few phones generally, not for larger phone systems.

Basically turns your talking on the analog phone into IP packets to be placed on the wire to transmit over your internet connection. So it has a plug for the internet or your Local Area Network (LAN) and a plug for your phone AKA RJ-11 interface (a regular phone jack)

VoIP router – in a small or home office, this device is generally a firewall of sorts too, and also functions as the gateway (see below). Suffice it to say that your phone is simply an IP address, so the Voice over IP data packets need to know where to come during your discussion with other people i.e.: your phone. The router does this.

It also assures some level of Quality Of Service (QOS) as VoIP doesn’t like delay, see my Broadband Connection Test Page for more on this issue.

VoIP firewall - The VoIP firewall protects your network, PC, phone whatever from the nasties on the internet, but it also has to allow your VoIP packets to come and go quickly, so hence the term "VoIP enabled" firewall.

VoIP gateway – basically a Magic "black box" used in larger businesses, at least five to 10 phone lines minimum that might allow any number of additional connections as well as your phone or phone system to the Internet.

So we might have T1 data circuits, regular analog phone lines, along with other types of digital phone services like PRI used in larger businesses. Gateways let us mix and match services, and use various connections to different networks so as to set up a cost efficient solution based on existing equipment and business needs.

So there you have it, how VoIP works along with the opportunity of low rate VoIP, free internet calls and cheap phone service, although again, I have a whole section on this as well.

Good Luck with your Business VoIP initiative!

If you need help let me know, we can chat about how VoIP will work for you I'm right here - Contact E-Dude Now

The Next Page in the VoIP tutorial is What Are Sip Trunks?, click to go!


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