The technology of telephone communica on is comple ng a revolu on that began
over 40 years ago. That revolu on is the digi za on of the phone system or more
commonly referred to as Voice over Internet Protocol or VoIP. Without the average
consumer realizing it, the vast majority of our phone calls are, at some point in
their life, digi zed and de-digi zed. The copper wire installed by telephone
com-panies leading to businesses and houses is the last ves ge of the phone system as
it has been tradi onally understood. In the next few years, even that ves ge will
disappear and the world will be an en rely VoIP world.
At the same me tradi onal phones are increasingly going digital, digital computers have
in-creasingly become more telephone capable. Computers have grown to include microphones
and speakers like phones; and programmers have wri1en so2ware to allow voice
ons over networks to which most computers are now connected. We are now at a point most
computers and tablet devices can serve as a primary phone.
Introduction
The reason for this revolu on is simply that VoIP is notably cheaper and more efficient than tradi onal
phones. As the technology of VoIP has grown, it has also become higher quality and more flexible as well. The flexibility of VoIP, enhanced by the standardiza on of VoIP protocols, is giving companies and consumers un-precedented control over their phone infrastructure par cularly in the area of connec vity and disaster re-covery.
As VoIP completes its take-over of the world of telephones, businesses le2 with some big ques ons:
How can they maximize the benefits of communicaon in a VoIP world? Can they develop the experse needed to navigate this new world? Are separate phones even necessary anymore ?
The following pages provide detailed explana ons of the tradi onal phone, VoIP, some comparison of the up-sides and downup-sides of the two, reasons it is impera ve to prepare for and maximize u liza on of the VoIP world now, and finally, guidance on naviga ng conversion to the VoIP world.
Contents
2 Introduction
4
Traditional Telephones
4
Voice over IP
5
The Internals of VoIP
Codecs
Soft Switches & Call Routing
Transport & the SIP Protocol
Security
6
VoIP in the Corporate Market
Quality of Service
Soft Phones
7
VoIP Advantages
VoIP is cheaper
VoIP sound quality is be#er
VoIP is more secure
Down Side of VoIP
Emergency Calls
Interoperability
Costs of Delaying Migration
Loss of savings
8
Loss of VoIP abilies
Limited me to build instuonal knowledge
Final Analysis
Green Key Technologies
About the Author
Those of us old enough to have been bored as children (Pong was only so interes ng) probably put a hole in each of two n cans and connected them with a string. When stretched ght, one could whisper into one end and the person on the other end could hear every word. In principle this contrap on is a telephone though one that relies on different physical principles to operate than what we think of as telephones.
Convert that string to a copper wire and those cans to electronic microphones and speakers and we have a basic telephone system. When telephones first came into commercial existence, they weren’t much more complicated than this, but slowly telephones went through many changes. A switch hook was added so they weren’t “on” all of the me. The ba1ery was removed and the line itself was powered. A crank, then a rotary dial, and a keypad was added to allow users to route their own calls.
However, the biggest changes in telephone technology have occurred well out of view of customers. Once a call reaches an exchange, it is digitalized for sending around the globe. Understanding why companies do this and what it means for the future of telephony is detailed more in the rest of the paper, so we will hold off for the me being.
Outside of digitalized signals and automated switching there haven’t been many changes to tradi onal tele-phones for a century and a half. While we have all heard of computer geeks using the internet to make phone calls, ini al forays into internet calls were choppy, undependable, and frequently dropped. However, all of that has changed with recent advancements in technology.
Voice over IP
If we wanted to create a simple n can model of Voice over IP or VoIP, it would be a decidedly complicated affair. VoIP relies on digi zing a voice and sending the informa on over the internet, then de-digi zing it to project out of the speakers on the other end. In essence, VoIP is a computer-based imita on of tradi onal tel-ephones, yet it does so more efficiently and even more clearly than tradi onal phones. Yet there are im-portant and confusing dis nc ons between the two which we will explore. To do so will require a be1er un-derstanding of VoIP
The first forays into VoIP started with computer geeks trying to avoid long-distance charges by digi zing voice data and sending it over the public internet in the early-1990’s. The setup involved two computers with micro-phones and sound cards and an internet connec on simula ng a phone. The result was a ji1ery mess by to-day’s standards, but the experiment encouraged a range of par cipants including corporate users.
Cri cally, Cisco, Nortel, and others developed routers capable of digi zing and de-digi zing VoIP packets for integra ng with tradi onal phone lines, a.k.a. the Publicly-Switched Telephone Network (PSTN), so a VoIP call could go out to non-VoIP phones. Once this occurred it was only a ma1er of increasing the quality of calls. With be1er protocols, high defini on audio and widely available broadband, VoIP has come to surpass the PSTN in quality and reliability.
Codecs
In the analog phone, a hardware device (the microphone) converts the acous c sound into an electric signal along the copper wire. Obviously, we need a similar process for VoIP, but in this case we need to convert the electric signal from the microphone into a digital signal for transmission. This is accomplished using a piece of so2ware called a “codec” short for “coder-decoder”. A codec samples the user speaking several thousand mes a second for a digital on of the voice coming through the microphone. It isn’t necessary to go too deeply into codecs, but suffice it to say, they sample, sort, compress, and digi ze into packets the audio coming from the microphone very quickly and then de-digi ze, decompress, and rebuild the audio to send to the speaker.
Soft Switches & Call Routing
A “switch” is a device that routes the digi zed audio packets to the right loca on. A switch can be a physical device or an increasingly common approach is to use a so2ware process called a “so2 switch”. The main objec ve of a so2 switch is to send the packets to the correct IP address in the internet universe. Because some IP addresses are sta c while others are dynamic the so2 switch must constantly check the database for updated loca ons. On top of remem-bering all of the IP addresses for our friends so we don’t have to, the so2 switch needs to know which of a user’s te-lephony devices is currently in use and route to it or perhaps to all of them at once.
The so2 switch can determine all of this useful informa on using a key advancement over telephones: user names and passwords! Tradi onal telephones never ask anyone to login before ringing. They just ring at a fixed loca on. VoIP re-quires users to login so the so2 switches know where to route traffic. The key benefit here is you can have a VoIP call routed to anywhere you are in the world.
Transport & the SIP Protocol
When informa on is sent across the internet it is broken down into smaller hunks for a number of reasons all of which combine to make the internet feasible. VoIP call traffic is no different. In fact, the IP in VoIP stands for the same IP in TCP/IP, the primary protocol for internet data transmission. However there are a large number of ways to break-up the voice signal using that protocol, so we need another protocol to handle the transmission of voice data and the signaling to the other computer.
In certain cases, like Skype, the calling universe is a closed system, so everyone is using the same protocols from the same company. More commonly, a set of agreed upon protocols is used to handle all of these interac ons. The more common and arguably most efficient is SIP or “session-ini ated protocol” which is a set of protocols for handling VoIP calls between computers poten ally with different so2ware providers.
Security
In order to keep conversa ons safe from hackers, VoIP requires security. VoIP security technology is really the same for crea ng secure websites, but instead of crea ng a single connec on between computers, it creates a full network be-tween computers known as a Virtual Private Network or VPN. VPN technology has been used widely by corpora ons for securely integra ng external users into its compu ng environment. VPN at its most basic is an encryp on protocol which means it takes ordinary data and writes it in a specifically convoluted manner which can only be de-convoluted if the receiving party has the encryp on key which specifies how the original data was convoluted. VoIP with VPN
essen-When VoIP is men oned, the first thing that pops into most people’s head (besides confusion) is Skype or perhaps Google Voice. While these are undoubtedly important VoIP examples, they are by no means the most important in-stances of VoIP. By far, the largest VoIP market is in the corporate sector. To save costs on calls, most large companies use VoIP throughout their en re enterprise.
For quite some me, corpora ons have had internal phone systems for calling between employees. These were routed with something called a “Private Branch Exchange” or PBX to avoid using the phone companies’ rela vely expensive lines. However, once the call went to a separate corporate installa on long-distance charges applied. Once on’s internet bandwidth increased the call could just as easily get routed by VoIP over the internet.
Many firms have gone a step further and have decommission the PBX altogether in favor of handing the administra on of their en re phone infrastructure to an external provider, some mes referred to as a “cloud service.” Cloud services use their own servers and so2ware to provide VoIP services. Clients direct their phones or computers to the cloud pro-vider’s infrastructure and no longer need to worry about the details of VoIP. Cloud services provide a number of ad-vantages over in-house VoIP systems including lower cost, simplified management, consistency across installa ons, and more robust disaster recovery.
Quality of Service
Much of the poor quality of early VoIP was dependent on a lack of bandwidth. If a user sends an email in the middle of a bandwidth spike, the email just gets delayed. The difference in a 0.1 second email and a 1 second email delivery is pre1y much unno ceable. However, for a voice call in the middle of a bandwidth spike, a 1 second delay makes the call sound choppy and unpleasant. Modern VoIP gets around this in two ways. The first is to priori ze network traffic. Email and file transfers are set low, while voice is high. The second is simply to increase bandwidth which has hap-pened naturally as capacity has go1en cheaper over me.
Soft Phones
Looking at your desk you might be shaking your head and saying, “But I can see a regular phone on my desk, so my company must not use VoIP.” On the contrary, most desk phones at corporate installa ons are simply small computers made to look like regular phones. Chances are your company is currently using VoIP but hiding the details.
Interes ngly, once voice service is en rely digi zed, having a stand-alone phone called a “hard” phone becomes un-necessary. Users’ desktops, laptops, and tablets loaded with VoIP client so2ware can easily take the place of hard phones. Using so2ware on a computer in place of a phone is called a “so2” phone. While once uncommon in the cor-porate environment, more companies are embracing so2 phone technology. There are a number of reasons for this change. So2phones are hundreds of dollars cheaper and don’t require personnel to route separate lines for phone. So2 phones are easier to program and travel with the user on their laptop making them much more mobile than hard phones. Another interes ng advantage of so2 phones is the ability of callers to know when a user is available for a call since so2 phones can maintain an “available” status when logged in to the system. So2 phones also make chat, video, and other mul media func ons available.
All of these advantages have led to major changes in the so2phone industry with leading so2 phone maker Counter Path repor ng record earnings. The US military has announced plans on switching as much as 80% of their users to so2 phones. Even more interes ngly, Apple has recently approved a so2phone app for its iPhone. (1) To many industry watchers these trends show a big future for so2 phone usage.
VoIP Advantages
The preceding discussion should make it obvious why VoIP is winning out over tradi onal telephone. However, there are a few advantages which are worth poin ng out in detail:
VoIP is cheaper
Almost every company today have an internet connec on and chances are there is plenty of excess bandwidth at those installa ons. VoIP calls simply ride on top of that infrastructure through whatever device a user chooses. It is par cular-ly cheap if users forgo hard VoIP desk phones and simpcular-ly use so2ware clients on their exis ng terminals.
VoIP sound quality is better
Despite impressions to the contrary, VoIP audio codes offer higher quality sound than tradi onal PSTN calls. Problems with VoIP sound quality are almost always related to network issues or hardware issues with the microphone and speakers.
VoIP is more secure
A move to VoIP enhances security by merging today’s disparate telecommunica on systems onto a single plaRorm. When you go to a common environment, you can also set up common security requirements.
Down Side of VoIP
In spite of all of VoIP’s many advantages there are a couple of areas where VoIP needs to make progress.
Emergency Calls
One par cular difficulty even with a stable internet connec on is that VoIP doesn’t have a geographical loca on associ-ated with the number. The link between number and geography is cri cal for 911 calls and rou ng of emergency ser-vices. Already a number of device providers and services gather geographical loca on into the device which could be made available to emergency services. As VoIP becomes the standard for communica on, it is very likely some worka-round will be found.
Interoperability
Interoperability can be a major source of frustra on with VoIP. Many commercial providers insist that one use their system front to back by keeping their protocol a closely guarded secret. Fortunately, there are many providers who support SIP protocol, so as long as one insists on SIP-based VoIP there is no interoperability problem.
Costs of Delaying Migration
People tend to be conserva ve (or even outright reac onary) when it comes to changes in daily work-flow. The internal resistance to change in a corpora on has kept some firms from switching to VoIP and even more firms from embracing all of its advantages. O2en the argument has been that VoIP and its associated cost and labor saving tools will always be there when the firm is more open to change. Yet, there are certain costs which a firm delaying migra on will face by wai ng for a VoIP conversion.
Loss of savings
Obviously, since VoIP is cheaper than tradi onal phone systems, any firm relying on tradi onal phones will be paying more for the same services (or less as we have seen.) Higher costs in one area can affect needs in other areas of the IT infrastructure un l the firm finds itself falling behind more nimble compe tors. This is also true of was ng money on
For many firms, enabling a more flexible working infrastructure isn’t high on the priority list. However, disaster recovery is paramount or even required by law. Doing disaster recovery with VOIP is seamless, par cularly with so2 phones – you simply log everyone into the new site. This level of disaster recovery is unthinkable with tradi onal phone services which require re-rou ng of the network by the telecom that might be having their own disaster issues.
Limited me to build instuonal knowledge
Just like tradi onal phones, VOIP technology requires knowledge to operate correctly. Many of the errors managers have tended to associate with VOIP have really been a func on of flawed installa on by inexperienced administrators. While this aspect can be mi gated by using a business specific cloud service, the longer migra on is delayed the more likely the migra on will happen in a hurry and the more likely errors associated with the learning curve will occur.
Final Analysis
There is li1le to fear from VOIP and a lot to be gained. VOIP is growing more secure and reliable with each passing year while allowing for much simpler disaster recovery and unprecedented user mobility. As long as IT managers insist on SIP protocol capable so2ware with VPN encryp on for their VOIP installa ons, many of the more difficult issues can be by-passed. Or even be1er, if managers contract with a cloud provider and use so2 phones the process can not only be easy but decidedly inexpensive. While in their infancy, these technologies are likely to be commonplace in the near future. In the final analysis, dealing with the VOIP world is simple– move forward and enjoy it!
Green Key Technologies
is a privately owned so2ware company founded in 2013. We are a global team oftechnologists, quants and developers whose common goal is to change and improve the way voice communica on takes place within the financial markets. We have built a solid reputa on for supplying the world's leading trading and broker-age firms with reliable voice communica on and recording services. Trader Voice Box℠ enables global financial market par cipants to rapidly set up and instantly speak on private, secure voice networks without hardware. Communica on takes place using a downloadable so2ware client that is installed on the user’s PC connec ng over the internet into Green Key Technologies’ cloud telecom infrastructure. For more informa on visit www.GreenKeyTech.com
About the Author: David Kendal, Ph.D.
David Kendall is an independent researcher and product development consultant to funds, companies, and financial firms. Aer receiving his PhD from the University of Chicago, David worked for the US Futures Exchange (USFE), the Intellectual Property Exchange Interna(onal (IPXI), and Ocean Tomo, LLC. david@kendallgold.com
Stone, A. (2013 October 4) So2 phone revolu on: DoD shi2ing to Internet-based phone technology. Defense News from h1p://www.defensenews.com
Hamblen, M. (2013 September 24) AT&T exec urges faster FCC review of plan to re re wired networks. ComputerWorld from h1p://computerworld.com
