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VoIP vs. SIP, What’s The Difference?

October 26th, 2021 | 5 min. read

By Marissa Olson


If you're like many business owners, you may be curious about the implications of some common technological options. There is rarely enough time to research many topics that are important to understand for the benefits they can bring to your business. 

When talking about modern phone systems, you've probably heard the terms VoIP (Voice over Internet Protocol) and SIP (Session Initiated Protocol). You may have wondered, what's the difference between VoIP vs. SIP?  They're not the same, though some people mistakenly use the terms interchangeably—but they do work in combination. 

Switching from traditional phone lines to a VoIP system is recommended for some companies. But others are better off with Unified Communications to cover their mixed need for voice, conferencing, texting, mobile, and other communication options. 

Perhaps you're a business owner seeking help in deciding whether you need a new phone system. Here, we'll address the question of VoIP vs SIP.  We'll explain each term's meaning, the importance of understanding the difference to help you determine the best phone system setup for your needs.

What is VoIP?

The term “VoIP” stands for Voice Over Internet Protocol. That term covers all phone calls made over the internet, rather than traditional landlines. VoIP phone systems function just like conventional phone systems. 

They provide long-distance service, call forwarding, voicemail, and other standard phone service options.  Similarly, like landlines, VoIP systems only allow voice communication, not video or different types of multimedia communications. 

VoIP is replacing landlines with internet-based systems for more and more businesses. 

How is VoIP Installed?

Older phone systems can have onsite hardware installed that adapts to the existing system, functioning as a VoIP system. In new business spaces, hardware and data wiring may already be set up for VoIP service. 

VoIP can also work via Wi-Fi if needed. A VoIP phone doesn't have to be stationary. It can work anyplace it can connect to the internet.  

VoIP can work from other devices also, like from your computer at home or on the road. Your office number and perks can travel with you. Compatibility isn't an issue, and you can still call numbers connected to traditional phone systems. 

To determine whether your current internet system can support VoIP, run a speed test, and then contact an office technology company like AIS for a consultation. 

How Does VoIP Really Work?

VoIP is a cloud-based phone system. It connects the caller's device to a provider using various protocols.

A Protocol is:

A system of rules applying to IT hardware that permits the exchange of data or messaging. Protocols facilitate many types of communication using hardware and technology. Many protocols exist. You've likely heard of some commonly noted protocols (think HTTP and DNS).

When VoIP Protocols are Activated:

Cloud-based phone systems use groups of phones working together. They route calls through an internet connection. The cloud or servers support the connection. Compare them to smartphones which store information in the cloud to free space on the physical device.

What are the Main Benefits of VoIP?

Ease of Installation

Cloud-based systems avoid some common hardware problems that can make traditional landline phone systems challenging to install. Since there's no extensive network of tech-loaded equipment, installation is more straightforward. 


Cloud-based systems avoid some common hardware problems that make traditional landlines unreliable. Steady internet and VoIP compatible hardware is a benefit of VoIP implementation. 

Cost Savings

VoIP systems offer significant cost savings for most companies since they rely on systems already set up rather than requiring expensive, complex equipment installation. VoIP doesn't always need specific hardware. Costs for VoIP are usually determined by the number of users and any hardware rental if necessary. 

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What is SIP?

SIP stands for Session Initiated Protocol. SIP systems utilize the internet and also share some traits with VoIP. 

But, while VoIP can be installed on its own, SIP requires VoIP to function. But SIP offers additional options. SIP is an internet protocol that's an industry standard.

What are the Advantages of SIP?

SIP can be used to implement VoIP and deliver additional options. SIP lines add SIP capabilities to a phone system. SIP can transfer more extensive voice, text, and video-based data than VoIP can transfer. 

Multiple SIP lines are called SIP trunks. A SIP trunk (communication line to carry multiple signals) isn't a physical link but a virtual connection to a service provider. SIP trunking connects a phone system to the cloud so that you can utilize more benefits for your current phone system. 

Including a SIP trunk or installing a new system that includes one opens up access to a wealth of communication possibilities. SIP phones can also work independently, without the requirement of a computer link.

SIP Facilitates Scalability

Many plans allow you to only pay for what you need in the beginning through customization, so costs are less. You can also choose between metered and unlimited plans to optimize expenses with some providers.

Trunks can be added as your business expands or your requirements change to meet your scalability needs.   

Five Major Advantages of Cloud-Based Phone Systems

A Forbes post recently noted, "Five Ways a Cloud-Based Phone System can Improve Communication.” They include: 

  1. Text messaging options - For many, texting is considered most convenient. Offering voice call, text, or chat choices increases customer engagement.
  2. Call recording capabilities - Recorded conversations make it easier to understand and follow up appropriately on essential talking points.
  3. Smart transcriptions - Highlight items while you're on a call to make them easier to locate in the transcription later.
  4. Softphone technology - A softphone is the software contained within devices that connect them to the internet, allowing calls to be made.
  5. App integrations - Can simplify business communications and offer additional services that simplify workdays.

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The Final Say: VoIP vs. SIP - What's the Answer?

The question of VoIP vs. SIP isn't a question of which is better. It's the story of how they complement each other. Phone systems aren't simple anymore. But cloud-based systems offer a world of tools supporting today's business communication demands.

  • SIP needs VoIP to function.
  • VoIP doesn't necessarily require SIP.
  • But adding SIP to a VoIP system significantly expands available applications.

Are you still confused about your telecommunication system needs? Our team can help you! Make sure to contact us today to learn more about the best phone systems and other office technologies for your business or organization. We’re here to give you peace of mind to help you win more business.

Marissa Olson

A true southerner from Atlanta, Georgia, Marissa has always had a strong passion for writing and storytelling. She moved out west in 2018 where she became an expert on all things business technology-related as the Content Producer at AIS. Coupled with her knowledge of SEO best practices, she's been integral in catapulting AIS to the digital forefront of the industry. In her free time, she enjoys sipping wine and hanging out with her rescue-dog, WIllow. Basically, she loves wine and dogs, but not whiny dogs.