VoIP is an acronym for Voice over IP, IP itself being an acronym for Internet Protocol, a type of data transmission used on the Internet.

The advantage to VoIP is that telephones can use the same type or possibly the same wires as the computers in an office. Also, by using the same network as the computers, there is the possibility for integration of the phone system and computer system. For example, the calls on hold can be displayed on an employee's (or any employee's) workstation.

Additionally, branch telephones can be connected to the main office through the same connection used by the computers, be that a dedicated phone line or the Internet. In a similar way, work at home employee's connecting through the Internet can be reached as if they were sitting at a desk in the main office.