How IP Telephony Fits In

But Skype can't take all of the credit for the recent growth of Voice over IP. A number of enterprise telephone system vendors have heavily promoted what they call "IP telephony"--the art of building corporate phone systems using Ethernet devices and host-based servers instead of old-fashioned PBX chassis and legacy technology. Cisco Systems and Avaya were two of the earliest players in the VoIP-phone-system arena, and their stubborn support of IP-based voice technology is beginning to pay off. More and more corporate customers are integrating IP phones and servers, and upgrading their IP networks to support voice applications, interested primarily in the productivity boost and long-term cost savings of running a single converged network instead of maintaining legacy voice equipment. This transition is a lot like the move from mainframes and minicomputers to personal computers a generation ago.

On two fronts--the corporate phone system and that of the home user--VoIP is transforming the global communications matrix. Instead of two separate notions of a global network (one for voice calling and one for Internet Protocol), a single converged network is arising, carrying both voice and data with the same networking protocol, IP. Steadily, corporations and domestic phone subscribers are migrating their voice services from the old voice plane to the new one, and next-generation, IP-based phone companies have rushed in to help them make the move.

Unless you've been sleeping under a very big rock for the last year, you've certainly heard the phrase "Voice over IP" uttered. Perhaps you've seen those hilarious Vonage commercials that feature painful and embarrassing accidents caught on tape, promising to let you dump your local phone company in order save big on your phone bill. You may also have seen the Cisco telephones that are curiously inserted in prime-time shows like 24.

What is all the hubbub about, anyway? Why, VoIP, of course! VoIP, the fabulous secret ingredient in Vonage, Skype, Cisco CallManager, and a host of other revolutionary technology products you may have already encountered on TV, in the news, or in person. But what makes these products so revolutionary? What is it about VoIP that is such a big deal?

The VoIP Technology

Voice over Internet Protocol is a family of technologies that enable voice communications using IP networks like the internet. Inventive developers and entrepreneurs have created an industry around VoIP technology in its many forms: desktop applications, telephone services, and corporate phone systems. VoIP is a core technology that drives everything from voice-chat software loaded on a desktop PC to Mac full-blown IP-based telecommunications networks in large corporations. To the Wall Street speculator, VoIP is a single technology investment with many revenue streams. To the enterprise network engineer, it's a way to simplify the corporate network and improve the telephony experience for users of the network. To the home user, it's a really cool way to save money on the old phone bill.

But how? What makes VoIP do all this awesome stuff? Read on.

Why VoIP Now?

The concept isn't actually that new: VoIP has been touted as a long-distance killer since the later 1990s, when goofy PC products like Internet Phone were starting to show up. But the promise of Voice over IP was lost in the shuffle of buggy applications and the slow-to-start broadband revolution. Without broadband connections, VoIP really isn't worthwhile. So early adopters of personal VoIP software like CUSeeMe and NetMeeting were sometimes frustrated by bad sound quality, and the first generation of VoIP products ultimately failed in the marketplace.

Fast forward to Fall 2005. Suddenly, everybody is talking about VoIP again. Why? There may be no greater reason than the sudden success of a freeware VoIP chat program called Skype.