Understanding SIP Technology and the Part it Plays in VoIP Technologies 

Voice over Internet Protocol (VoIP) is a general term for a group of transmission technologies that deliver voice communications as IP over networks such as IP networks, packet-switched and private line networks.
SIP is the Session Initiation Protocol.  That means it is an open standard for establishing real-time communications sessions via the Internet. SIP is media agnostic and can be used to establish voice, text, and video calls at any fidelity of bit rate, depending only on the capabilities of the end systems.
According to Wikipedia, "A SIP (Session Initiation Protocol) connection is a service offered by many Internet Telephony Service Providers that connects a company's PBX to the existing telephone system infrastructure via the SIP VoIP standard."
Unlike traditional telephony, where bundles of physical wires were once delivered from the service provider to a business, a SIP trunk allows a company to replace traditional fixed Telephone Service Provided lines with virtual connectivity via Internet access.
SIP trunks can offer significant cost-savings for enterprises, eliminating the need for local Telephone Service Provider gateways, costly ISDN Basic Rate Interfaces (BRI's)  or Primary Rate Interfaces (PRI's).
By utilizing a SIP connection for voice, text and video, the user may simplify administration as the SIP connection typically will use the same Internet connection that is used for normal data.  Using a SIP connection as a redundant network is another way to maximize technology to realize cost savings.
The design of any SIP application is critical to the success of voice traffic.  If the call traffic runs on the same connection with other traffic like Email or Web, voice and even signaling packets may be dropped and the voice stream can get interrupted.
To mitigate this, many networks are designed to split voice and data up into two separate internet connections to solve this problem, so that the resource conflict on the Internet access side is avoided. Other devices perform traffic shaping in order to avoid this resource conflict, but they still depend on the merit of the service provider not to drop packets from the Internet to the PBX.
As more and more applications are developed using the Internet as the backbone of the communication, hardware devices will depend on VoIP technology to revolutionize communications of the future.