What began as a novelty application for Internet users to converse on-line has now graduated into a sophisticated and the most cost-effective technology, capable of replacing the traditional PSTN (Public Switched Telephone Network) and PBX (Private Branch Exchange) phones. Thats IP Phone for you.

The hardware requirements of a domestic user are very simple. All that an IP application requires is an ordinary PC equipped with IP software and connected to the Internet. Attach speakers and a microphone to the PC, you are all set to call any number whether local, international or cellular incurring only Internet expenses. If you dont have a computer, you can use a specially manufactured IP Phone (basically a phone with a built-in adaptor) or even a regular phone supported by an IP adapter. If you want to operate even during power failure, you will need a generator or a UPS.

Software requirements are also equally simple. Popular service providers like Skype, Yahoo Messenger, Google Talk etc. provide free downloads for the computer based IP Phone. Regular updates, too, are freely downloadable. Providing software for the IP Phone/adaptor is the responsibility of the manufacturer.

More extensive hardware is required for large enterprise implementations and many involve considerable expenditure for converting the existing PBX system into IP system. Since the IP system runs on data network system instead of the regular copper circuits, LAN/WAN connections should be properly configured. Depending on the call traffic and bandwidth requirement, number and locations of IP routers and extensions are to be determined. Power back up is also compulsory for an enterprise. However, most of the hardware expenditure is one-time expenditure and proves economical in the long run because single network supports voice, data and video transfer.

As far as the software requirements are concerned firewalls and servers are to be configured to accept IP transmissions. Software needs of business enterprises differ form user to user. Therefore, software solutions for organizational users are generally custom made but for certain common features.

The cost savings in making calls through the Internet are simply monumental for a business organization with high volume long distance calls, remote branch offices and mobile workers. Traditional PBX phones come in many ranges and they require to be scrapped periodically to be replaced by new hardware which involves lot of expenditure. There is no such problem with IP Phones because this system is mainly based on software rather than hardware and, thus, easier to alter and maintain.