History of VoIP
Back in 1995 a small technology company, Vocaltec, released the first internet phone software. It was designed to run on a home PC, and it utilized sound cards, microphones and speakers much like the PC phones used today. "Internet Phone" was the name of the product, and it operated using the older H.323 protocol instead of SIP (Session Inititation Protocol), which is more commonly used today.
The Company had some initial success with Internet Phone, and it even launched a successful IPO in 1996. But the lack of broadband availability in 1995 was a major drawback. Many people were using dial-up, not cable or DSL. Because of this, the software used modems, and this resulted in poor voice quality compared to a regular telephone call. However, it represented a milestone as the first IP Phone.
Even though by 1998, VoIP traffic had grown to represent only 1% of all voice traffic in the United States, network engineers and companies saw a lot of potential. Networking manufacturers like Cisco and Lucent began to produce networking equipment that could route and switch the VoIP traffic. By 2000, VoIP traffic had grown to more than 3% of all voice traffic.
By 2005, major voice quality issues had been addressed and resolved, and VoIP traffic could be prioritized over data traffic. This lead to reliable, clear sounding, and unbroken telephone calls. Revenue from VoIP equipment sales alone reached nearly $3 billion and over $8.5 billion by the end of 2008.