The Project: Switch 35,000 employee and consultants to Internet telephone systems.

The Payoff: Cuts phone costs, provides data services, and promotes the company's technology.

It's a piece of the sparkling future that Cisco Systems Inc. (CSCO ) has been promising for years. The networking company is showcasing Internet telephony -- and using 35,000 of its own employees as guinea pigs.

Cisco workers worldwide now have newfangled phones that let staffers make calls to each other over the Net, cutting down on phone bills. And staffers can assign their number to whichever phone they're using, with just a few keystrokes. It's less work for the tech staff. That has helped Cisco save $300,000 a month in Europe alone. What's more, Net calls promise all sorts of new data features. Cisco execs will soon see account info when a customer calls -- even before picking up the phone.

By Peter Burrows

    Before it's here, it's on the Bloomberg Terminal.