It takes the analog signal from your traditional phone and converts it into digital data for transmission over the Internet.
Many analysts still believe in the promise of fiber optics networks, which can carry far more voice and data than traditional phone or cable lines.
Unless you have a backup battery, a blackout like last summer's can knock out Internet phone service even when traditional phones continue to work.
But experts wonder if enough people are willing to make the switch from traditional phones to talking through their computers.
This gives a higher transmission quality than that of traditional phones, which use FM-type radio signals.
Microsoft introduced three software products on Tuesday that are intended to blur the lines between traditional phones and computer networks within corporations.
A gateway transfers this information from the Internet to the traditional phone or cellular phone network.
Almost all cellular phone subscribers, unlike users of traditional phones, have to pay when they receive calls.
The traditional phone by his desk shares space with one of his company's new creations.
Mr. Johnson said the quality of the calls made with softphone was "indistinguishable" from a traditional phone.