VoIP stands for Voice over Internet Protocol, but don’t let that term fool you. Your calls will not be running through Google. Instead, calls are placed over an Internet Protocol network, or a way of communicating between two points. IP telephony is supported by different kinds of network connections, such as a corporate high-speed line, and businesses can benefit by converging data and voice into a single arena.
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How does VoIP work? Like all data that move over an IP connection, VoIP breaks down conversations into digital “packets,” each of which contains bits of the phone discussion. The packets are pumped out over the high-speed connection and converted into conversations, virtually instantaneously, at the other end.

What are the benefits? Cost savings, higher worker productivity, higher return on investment, messaging programs such as e-mail, fax and voice mail in a single computer program, and the ability to set up an office anywhere there’s a solid Internet connection. Advocates say IP telephony is a service that companies should consider if they are opening multiple offices.

What are the downfalls? Because VoIP relies on an Internet connection, an IT staff is required to some extent to support the operation, which can go down if the network fails. Because it runs on a data network, it faces issues of security, as well. And since a computer relies on power, an outage can render the phone useless. Emergency calling can also pose a problem, as Internet addresses are not pegged to an exact location. But if the company chooses to outsource its network connections, backup-power supply and IT staff to a managed host, many of those problems can be resolved.