VOIP: The History of Voice over IP

It’s been said a million times before, but it’s worth saying again: The Internet is changing the way that people around the world live their lives and conduct business. There was once a time when people had to wait for news papers or the evening news to find out what was going on in the world around them. Shopping was localized to malls and retail stores. Entertainment options were rigidly scheduled as such that people had to either find time to enjoy television shows, concerts, etc. or miss out on these events entirely.

Today, people get news instantly whenever they want from their computers. They can buy anything, from clothing to groceries, without leaving the comfort of their homes. Streaming web services have allowed us to watch our favorite television programs when we want at watch a concert from halfway around the world as it occurs.

But one topic that isn’t covered often is the way in which web-based services have changed telephony services. The irony is that many people’s first experience with the Internet was with dial-up services, yet when they wanted to hear the voice of a person they were communicating with they would have to disconnect and pick up the phone.

Voice over IP (VoIP) services have changed this scenario dramatically. VoIP uses your existing Internet connection to connect you to other web-users or standard landlines. The connection is usually crystal clear. In fact, many people don’t realize that they use VoIP every day at their places of employment!

Many technology historians believe that the first VoIP software was Vocaltec’s Internet Phone. The service was made available in 1995, when the majority of web-users were still using a regular phone line to connect to the Internet. Due to technical limitations of the time, people often complained of poor sound quality on their calls. Still, the program offered some impressive features that laid the groundwork for modern-day VoIP services like Skype and Vonage. You can see one Internet Phone’s reviews on page 29 of the July/August issue of CTI Magazine. In fact, Internet Telephone was a very influential product that is often referred to today as the “Skype of the mid ‘90s.”

VoIP began to slowly gain users as the next few years passed. By 1998, about 1% of all telephone calls had at least one user who connected to the conversation via the Internet. Business began to make the transition to VoIP as a way to replace their aging telephone systems and save money. Well-established companies like Cisco Systems began to create devices that could connect PC and landline based callers.

In 2003, web users were introduced to Skype, one of the most wildly popular messaging systems on the planet. Initially the service allowed people to make free voice calls to other Skype users. Several months later a PC-to-phone service was added on for a nominal fee. By 2005, Internet telephony was a $3 billion a year industry.

VoIP continues to gain popularity. It is currently used in a very notable number of businesses, both big and small. Researchers also estimate that 9% of households currently use some form of Internet phone. As the technology continues to improve, there is no doubt that more and more people will drop their normal home phone service in favor of an Internet-ready option.