VoIP, or Voice over Internet Protocol essentially combines two technological areas which have been considered quite separate. Rather than transmitting voice over traditional copper lines (analog phone lines), VoIP packages voice as digital data, and transfers it over data networks. In other words, voice is treated in much the same way as visual information and can be transmitted over any high-speed internet connection.
As a telephone system, VoIP technology can be used functionally the same way as traditional phone lines, while by-passing the actual phone line network and its associated billing. Long distance calling using voIP can be significantly cheaper.
While much of the excitement over VoIP has to do with potential long distance cost savings, the real benefits come from the functions VoIP technology makes much more accessible and affordable, particularly for small to medium-sized businesses.