Using your company network as the backbone for making telephone calls is not a new concept, in fact it has been around for several years but recent developments in technology has increased the rate of adoption of internet telephony. Internet telephony goes by numerous names and acronyms – VOIP, Voice Over IP (IP stands for Internet Protocol), IP telephony, broadband telephony and VoBB (Voice Over BroadBand). Skype is a widely adopted application that uses the internet backbone for transmitting voice and video call data.

The advantages of internet telephony are numerous, not least the cost savings associated with running telephone calls over the same network as the company network and internet. By combining the two applications – use of the web and making telephone calls – only one network is required instead of two separate telephony and IT networks. In a wider context, telephone and internet service providers (ISP's) can use their existing network, and network security, infrastructure to deliver services to customers. This is why it is so common to find cable/telephone/internet access all bundled together from companies in the business and domestic customer markets.

The internet is used to transmit your calls in the form of data which gets reassembled at the other end of the connection, so the cost of making calls drops dramatically. All a user has to do is pay for internet access and they will bypass having to tell a telephone company for service. When you consider that the internet backbone is equally capable of delivering data to Australia as it is to the next cubicle, the cost savings become even more apparent.

Users frequently experienced poor call quality with internet telephony. Better technology has dramatically improved call quality so that it is just as good as a land line call. A further drawback was the inability to make telephone calls if the internet connection was down – as internet telephony relies on the internet backbone to transmit the call, if you cannot access the internet for whatever reason, you cannot use the internet telephony service. This has led to some criticisms regarding VOIP's lack of redundancy, but installations deliver significant cost savings that run hand in hand with a fixed line system.

Modern internet telephony systems use bandwidth with a high degree of efficiency and as this limiting factor has now been removed, more and more businesses are performing the migration of their business telephone service to IP based services. It is not just the cost savings which can be achieved which is the business driver but the functionality which can be delivered. Internet telephony includes not only voice calling, but also video and web conferencing, email interaction, and device utility for making and taking calls, faxes, and emails. This merging of communications technology and application (a device and internet telephony) is called "unified communications".