What is it?

VoIP (or Internet telephony which is almost the same thing) is any one of several technologies that allow you to make phone calls over the Internet instead of over the telephone network. Some more advanced and secure systems use a private data network instead of the Internet. This technology has been around since the 1970s but hasn't been practical until recently because for it to be effective you need a broadband/high-speed connection. Specifically you need a bit more than 100kbps per connection using modern VoIP transmission technologies. This has only recently become common among residential broadband subscribers.

That kind of bandwidth has been available in businesses for longer and the technology is already well established in the business market – but even there the necessary broadband has only been commonly available for three or four years.In addition, improvements in standards, protocols and underlying hardware and software have also made the required broadband speeds more feasible and have reduced costs to where the decision to move to VoIP is more about the timing and the implementation for a business rather than if it should switch or not.

Typically any VoIP system – residential on up – offers slightly lower operating costs (contrary to advertising claims the cost savings are small) but offers a big step forward in available features and functions. For example, it is now perfectly feasible and cost effective for a 20 person small business to run a call center of its own and to have one system manage main and branch offices and even remote and telecommuting workers.