What Is VoIP?
The world of VoIP tech has come a long way from its early days as a somewhat nerdy application that often didn't really perform that well 'out of the box'. Today, things are very different, and the stability of VoIP systems makes them a perfect choice for many businesses that want to run a cost-effective telecommunications strategy that is less reliant on older tech.
VoIP stands for Voice over Internet Protocol and it is now a serious player in the wider telecoms market. Although the use of VoIP goes as far back as the 1970s, with the U.S. Department of Defense being an early adopter, the quality of early consumer-ready packages was not particularly reliable. Today, the ubiquitous nature of strong, high-speed Internet connections means that the small packets of data that are sent across the network and rearranged at the receiving end in a VoIP system result in voice quality that is just as good as with traditional telephone lines.
There are a number of services to choose from that can be provided by a VoIP service, ranging from PC to PC, PC to Telephone Network, Telephone Network to Telephone Network, and IP Phone to Telephone Network. Because the cost of making calls via using VoIP is cheaper than using a landline, particularly for international calls, the commercial appeal for any business working on a global scale is obvious.
As calls between VoIP users are often free of charge, it also makes sense for any company that wants to set up an essentially 'free to use' employee to employee communication system. Even taking all of this into account, perhaps the biggest advantage that VoIP has over traditional telephonic services is that it also offers video calls, so travel costs can be reduced or eliminated altogether by adapting remote conference calling techniques.
Calculating the future of any tech market has to take into account so many different factors and elements that it makes it fascinating, complex and potentially highly rewarding. Zion Research recently estimated that the global VoIP services market is poised to surge upwards from being worth $83 billion in 2015 to $140 billion by 2021. This leading research firm's latest report on the sector assessed the global demand for its services and revealed that it is expected to grow at a CAGR of above 9.1percent between 2016 and 2021. Improvements in infrastructure in terms of both wired and wireless communications result in the bandwidth available to end users growing at an unprecedented rate.
This means that services such as VoIP, which were previously hampered by connectivity issues and slow transfers of end-to-end data, are only now really coming into their own. The VoIP services market can be separated into domestic VoIP calls and international long-distance VoIP calls, and it is the latter that is proving to be the real area of potential. Currently it is the leading segment, generating 52 percent of total revenue share in 2015, but this is expected to increase to 62 percent in the report's forecast period.
All major tech sectors are reliant on constantly evolving systems that can reflect user needs, and implement solutions and upgrades that give them an edge in a highly competitive commercial environment. Companies such as magicJack VocalTec Ltd (NASDAQ: CALL) a long-time provider of VoIP software and technologies, are a perfect example of this process in action. Under the leadership of chair of the board Donald Burns, the company has sold more than 10 million of its devices and today has a high-profile presence in more than 25,000 retail stores.
While VoIP is currently being used mainly in conjunction with landlines, there may well be a future scenario in which it will completely replace the older tech. As handheld devices become even more powerful, and delivery systems, whether over cell connections or wider Wi-Fi coverage become able to cope with almost unlimited data transfer, video calling is likely to finally move out of the world of sci-fi and into daily usage that far outstrips its current occasional style of application.
From medical assessments through to retail uses that are still in concept stage, VoIP is set to play a vital role in the way we connect with others in a range of different situations. This can only be good news for the sector and for anyone looking for a next generation blue-chip investment.
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