H.323 was originally created to provide a mechanism for transporting multimedia applications over local-area networks (LANs). Although H.323 is still used by numerous vendors for videoconferencing applications, it has rapidly evolved to address the growing needs of VoIP networks. Because of its early availability and these advancements, H.323 is currently the most widely used VoIP signaling and call-control protocol, with international and domestic carriers relying on it to handle billions of minutes of use each year.

H.323 is considered an "umbrella protocol" because it defines all aspects of call transmission, from call establishment to capabilities exchange to network resource availability. H.323 defines Registration, Admission, and Status (RAS) protocol for call routing, H.225 protocols for call set-up, and H.245 protocols for capabilities exchange.

Figure 1. H.323 Networks

H.323 is based on the Integrated Services Digital Network (ISDN) Q.931 protocol, which allows it to easily interoperate with legacy voice networks such as the PSTN or Signaling System 7 (SS7). As a protocol used in a distributed architecture, H.323 allows companies to build large-scale networks that are scalable, resilient, and redundant. It provides mechanisms for interconnecting with other VoIP networks and supports network intelligence on either the endpoints or the gatekeepers.