The Difference Between Analog, Digital and Voice over IP (VoIP) Business Phone Systems

Updated: Apr 22

There are three different types of business phone systems (Analog, Digital, and Voice over IP) that have evolved onto the market over the last twenty-five years. Being able to understand the difference between these three systems can be very useful in helping you to choose the right communications solution for your organization.

Business Phone System
Business Phone System

Analog dominated business phone systems before 1995. These systems used copper wires over a service called “Pots” or “Plain Old Telephone Service” that utilized a technology known as analog. This technology took an audio or video signal and converted it into electronic pulses to support phones, faxes, and modems.


A Digital Phone System is one that breaks audio or video signals into binary code. Binary code is a series of 1’s and 0’s that digital devices can then use to create a signal that can be rapidly transferred from one phone at one location to another phone at another location. The sending phone converts the signal to binary and then sends this signal. The receiving phone receives the signal and then decodes it and reassembles the decoded signal into the original message. Amazingly, it does this so close to real time that it seems as if the callers are standing right next to each other even if they are thousands of miles away.

Voice over IP or more formally, Voice over Internet Protocol” or “VoIP is the latest business phone system technology. VoIP was developed in 1995 and since then has taken the business phone market by storm and changed the way that business is done. VoIP works by sending voice data via a data connection (The Internet). Voice over IP phone systems allow far more capabilities than standard analog or digital systems. VoIP brings together voice, video, and messaging on a single IP platform to provide your business with