The Voice over IP (VoIP) market emerged as broadband internet developed and internet connections were severed from traditional phone lines. IT professionals looked for a way to unify the two services once more, and VoIP was born. Instability and poor call quality plagued VoIP in the early days, but once the initial bugs were worked out, VoIP overtook traditional telephone systems in new telecommunications infrastructures. 

The biggest challenge facing the VoIP market is that virtually every business in the world already had a telecommunications solution deployed, and because of the huge amount of infrastructure in the form of hardware, cable and servers that must be replaced in order for a VoIP solution to be implemented in place of legacy systems. Most companies are unwilling to invest such a huge amount of money and man power in replacing an already adequate telecommunications solution.

Still, even with all of the unlikelihood surrounding the VoIP market, it experienced a 16-percent growth in 2011. The increase was consistent with a study performed by Infonetics Research which projected a compounding annual growth rate of 16.6 percent over the period of 2011 through 2015.

Other predictions from the Infonetics (News - Alert) report:

• The number of seats for hosted business VoIP and unified communications (UC) services is on track to more than double between 2012 and 2016.
• SIP trunking service revenue jumped 128 percent in 2011 from the previous year, as businesses adopt SIP trunking for flexibility, centralization of resources and cost effective voice connectivity.
• Demand for cloud-based services helped push hosted PBX (News - Alert) and UC service revenue up 33 percent and seats up 44 percent in 2011.
• The number of residential and SOHO VoIP subscribers grew 14 percent in 2011, to over 178 million worldwide, as more households opt for no fixed-line voice connection.

As more and more legacy telecommunications systems reach the end of their usefulness, expect the VoIP market to continue to grow.