What is VoIP?

The definition of voice over IP (VoIP) refers to a system that enables voice transmissions to be carried over any IP network. The IP systems might include the internet as well as private data networks or office LANs. An advantage of utilizing VoIP solutions is that costs are much lower than using traditional telephony infrastructure when making long-distance calls.

VoIP phones enable users to route calls over the internet by converting voice data into IP packets and vice versa. While some traditional telephones offer VoIP as an option, other VoIP solutions work squarely from a web browser. These solutions are known as softphones or browser phones.

Because VoIP systems route calls through IP-based carrier networks, features such as CNAM (Caller Name Delivery), STIR/SHAKEN authentication, and spam labeling controls are often managed at the carrier and service provider level rather than through traditional on-premise telephony infrastructure.

How VoIP Works Technically

Voice over IP works by converting analog voice signals into digital data packets that can be transmitted over IP networks. When a user speaks into a VoIP-enabled device, the system compresses the audio using a codec, breaks it into packets, and transmits those packets over the internet or a private IP network.

These packets travel independently across the network and are reassembled in real time at the receiving endpoint. The receiving device then converts the digital packets back into audio that the listener hears.

Several core components enable VoIP functionality:

• Codecs that compress and decompress audio data

• Session Initiation Protocol (SIP) to establish and manage calls

• Media gateways to connect VoIP systems with traditional PSTN networks

• Quality of Service (QoS) controls to prioritize voice traffic

Because VoIP relies on internet connectivity rather than copper phone lines, call quality depends heavily on network stability, bandwidth availability, and latency management. When properly configured, VoIP can deliver high-definition audio with lower infrastructure costs than legacy telephony systems.

Benefits of VoIP for Modern Revenue Teams

VoIP technology has become foundational for modern sales and support operations because it offers flexibility, scalability, and integration capabilities that traditional phone systems cannot match.

Unlike legacy PBX systems, VoIP platforms can:

• Scale instantly across distributed and remote teams

• Integrate directly with CRM systems such as Salesforce

• Enable browser-based calling through softphones

• Support call recording and analytics

• Route calls intelligently based on workflow logic

For revenue teams, this means improved visibility into call activity, automatic logging of conversations, and centralized performance reporting. VoIP platforms also support advanced outbound features such as power dialing, local presence dialing, CNAM registration, and authentication protocols like STIR/SHAKEN.

As organizations move toward cloud-based revenue technology stacks, VoIP serves as the infrastructure layer that enables communication, automation, compliance, and performance measurement within a unified system.

VoIP vs Traditional Phone Systems

Voice over IP and traditional phone systems differ fundamentally in how they transmit voice data and how infrastructure is deployed.

Traditional phone systems rely on the Public Switched Telephone Network (PSTN), which uses dedicated copper lines to transmit analog voice signals. These systems often require on-premise hardware such as PBX equipment, desk phones, and physical wiring. Scaling typically involves installing additional lines and hardware, which increases cost and operational complexity.

VoIP systems, by contrast, transmit voice as digital data packets over IP networks such as the internet or private data networks. Instead of relying on physical phone lines, VoIP operates through broadband connectivity and cloud-based infrastructure.

The differences extend beyond transmission method:

Traditional systems are stable and predictable but can be costly to maintain and difficult to scale. VoIP offers greater flexibility, easier integration with modern revenue platforms, and reduced infrastructure costs, particularly for distributed teams.

For organizations prioritizing automation, CRM visibility, and cloud scalability, VoIP has largely replaced legacy telephony infrastructure.

Hosted VoIP vs On-Premise VoIP

Even within VoIP systems, deployment models vary. The two primary approaches are hosted VoIP and on-premise VoIP.

Hosted VoIP, also known as cloud VoIP, is managed by a third-party provider. Call routing, infrastructure maintenance, updates, and security are handled externally. Users access the system through IP phones, softphones, or browser-based applications without maintaining physical telecom hardware.

On-premise VoIP, by contrast, requires organizations to host their own IP-PBX equipment within their physical location. While voice traffic still travels over IP networks, the hardware and system management responsibilities remain internal.

The distinction primarily affects control, cost, and operational burden.

Hosted VoIP has become the dominant model for modern revenue teams because it supports rapid scaling, remote workforce enablement, CRM integration, and lower administrative overhead.

On-premise VoIP may still appeal to organizations with strict data control requirements or highly customized telecom environments. However, the operational complexity and capital expenditure often make cloud-based deployments more attractive for growth-focused companies.

Explore our complete comparison of the top VoIP providers for Salesforce.