Internet telephony is an umbrella term used to describe all voice telephone solutions hosted over the internet. Internet Telephony solutions such as Skype and VoIP have become extremely popular with consumers as they enable free international calls with acceptable quality. Initially bandwidth was unpredictable with Skype due to its peer-to-peer architecture but consumers were willing to make allowances. Another basic problem was that the internet is just not an architecture for delivering real-time traffic.
With regards business Skype and the earlier VoIP solutions very just not acceptable as a company telephone system. There were alternatives to these such as IP/PBXs that could replicate the many built-in features of the PSTN PBX however, the same problems with voice quality persisted when calls traversed the internet. As a result, VoIP was slower to develop in the corporate environment as it was deemed a vital communication system where reliability, predictability and quality could not be compromised.
Therefore during the 2000s consumer VoIP surged in popularity and uptake with Skype being a household recognized brand and became popular with SMBs for voice and video conferencing.
Since then, there have been dramatic improvements in bandwidth availability and WAN speeds through technologies such as ADSL and Fiber to the home. This has created a market for business standard internet telephony in the SMB (small Medium business) environments. Similarly, these advances in WAN connectivity have enabled Cloud computing and SaaS (software as a service) solution to thrive. Virtual Telephone systems hosted in the cloud and managed by a provider have become cheap and feature rich alternatives to the PSTN for many SMB. Hosted IP/PBX is another thriving business, which provides SMB with all the features of a PBX for a managed monthly fee. Both of these Internet telephony services are provided over the internet through standard internet connections.
Another thriving business model is the Virtual telephone service hosted again in the cloud providing an automated call answering and call forwarding service to a mobile, landline or VoIP phone. These call-answering services provide a central point of contact, a business number, and a call receptionist, and an automated transparent call forwarding service, which gives the impression to callers of dealing with a much larger company. Virtual telephone systems have become very popular with entrepreneurs and startups as they typically wish to operate from their mobile phones.