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What is a cloud-based phone system?

3 mars 2020

A cloud-based phone system is a phone system that relies on cloud-based technologies and infrastructure, as opposed to more traditional PBX telephony systems that require on-premises hardware. There are several reasons for making the switch to the cloud instead of using a more traditional, local on-site server and there are also multiple benefits to doing so. This article will cover what cloud-based phone systems are, how they work, and why they are advantageous.


What sort of features do cloud-based phone systems offer?

Many mature cloud-based phone system providers offer a wide range of advanced features as part of their standard package at no extra cost. Below is a list of typical features offered by many cloud-based phone systems.

  • Call forwarding

Call forwarding is a standard feature for many phone networks but cloud-based systems offer a programmatic approach to call forwarding that can handle different responses to different conditions. For example, you can set different call forwarding options under conditions such as “no answer”, “when busy”, or “always”. This is useful if you receive a call while already on a call - you can easily pass off the call to someone else, rather than have to interrupt your current call or let it ring to voicemail.

  • Ring groups

Ring groups are groups of phones (physical phones, phone numbers, or extensions) that all ring simultaneously when one number or extension is dialled. This is particularly useful for departments, such as sales or marketing, where multiple people may work and distribute the workload with regard to incoming calls. This makes it much easier for organizations to divide the workforce more efficiently into appropriate groupings while providing one simple number for others to call in.

  • SIP forking

SIP forking is similar to ring groups, in that one incoming call can be distributed to multiple devices. SIP forking is particularly useful for individuals who may have numerous ways to reach them. When a number is called, the incoming call is ‘forked’ to multiple devices. These devices don’t have to be the same - for example, a manager may regularly use a desk phone, conference phone and smart phone. With SIP forking, that manager can use one phone number and have all 3 devices ring when it is called. They can then simply use whichever device is most convenient for them at the time to answer the call.

  • Variable ringtones

Calls may be preconfigured to use different ringtones. For example, incoming internal calls can make use of one ringtone, while incoming external calls use a different ringtone. This can help hint to team members who is calling or what type of call to expect as soon as the phone rings.

  • Blocklist/allowlist

Blocklists and allowlists allow you fine-grained control over which calls are accepted or rejected before even ringing your phones. It’s easy to block nuisance calls or only allow through certain calls to prevent abuse and control which calls make it to the end destination.

  • Interactive voice response

Interactive voice response (IVR) is an interactive auto-attendant call-handling system that can work with either touch typing or voice commands. Pre-configured voice responses and branching paths can be used to handle incoming calls and route them to the most appropriate destination. These are easily configured and adjusted with cloud-based phone systems and offer a smooth routing experience for incoming callers.

  • Automatic voicemail to email

As voice data is digital data in a cloud-based phone system, it can be used as input for other processes, such as speech-to-text. This allows for the automated transcription of voicemails into text, which can then be sent in the form of an email to a specified address. This can be useful for multiple reasons, such as record tracking or being able to monitor voicemails in places where listening isn’t possible.

  • Video conferencing

Provided that the devices you are using have cameras, video conferencing works with no additional hardware necessary and they’re handled just like regular conference calls and video calls. Users can use a smartphone or other device to simply pick up an incoming call like any other to join a video conference.

How does a cloud-based phone system work?

At a high level, a cloud-based phone system works by converting analogue voice signals into digital data. These data packets can then be transmitted over the Internet and programmatically manipulated with software. This massively expands the range of tools and services that can be built on top of these data packets compared to handling analogue phone signals.  


What this means practically for your business is that the on-premises PBX hardware you may be using with a legacy phone system is not needed with a cloud-based phone system. Instead, it is as simple as plugging an ethernet cable into your telephone hardware or using an app on your smartphone to start taking and making calls using a cloud-based phone system.


For your customers and other end users calling in, there is no distinguishable difference between a legacy PBX system and a cloud-based phone system. The same features will work in the same way, which makes for a smooth transition if you are considering switching.


What are the benefits of a cloud-based phone system?

There are various benefits to implementing and using a cloud-based phone system over PBX systems. From greater flexibility to lower costs, read below for some of the key benefits of choosing a cloud-based phone system. 

  • Offload system maintenance & support

One benefit is the offloading of responsibility for network infrastructure and maintenance. One of the disadvantages of traditional PBX systems is that they are typically very costly to maintain and must be managed by the user. Issues with the network requiring callouts may add further expenses on top.

By comparison, cloud-based phone systems are typically provided as a service. The SaaS (software as a service) model sells a particular service, usually for a recurring monthly or annual fee. In exchange, all infrastructure and maintenance are taken care of by the service provider instead of the end user. 

  • Future proof

Another benefit of cloud-based systems is that they are, in effect, future-proof. The underlying systems are developed and maintained by the service provider, meaning that you do not have to worry about either maintaining legacy systems or costly system upgrades. All of this is taken care of for you, along with other aspects of system maintenance, such as security. This too becomes the responsibility of the service provider.

  • Cost-saving

Another major benefit of this offloading of responsibility is the cost-saving. Maintaining a traditional PBX system is expensive, as the network must be maintained and one or more people are required to manage the system. By comparison, cloud-based phone systems charge a set, consistent fee on a monthly or annual basis. One single predictable sum is also a lot easier to account for and manage in budgets.

  • Greater flexibility

Cloud-based phone systems are also extremely flexible, which makes them very useful for modern organizations. In a post-COVID world, many organizations may be operating on remote working or hybrid working policies, whereby not all team members may be in the same physical location. This can be a problem for PBX systems that plug in to on-site hardware. Team members have to be in the office in order to use these phone systems. By comparison, cloud-based phone systems can run on smartphones and other devices, giving your team members access to the same telephone systems from anywhere. This gives companies far more flexibility when handling calls and removes the need for message handling when out of the office or on the road. It also removes a lot of complications around setting up the correct phone numbers when hot desking.

  • Easy to scale

Adding new users to a traditional phone network can be a pain. You need new hardware to scale with a traditional system, whether that be simply the landline itself or even new routing hardware. This can take time if you don’t have new hardware to hand, which is not ideal for onboarding new team members quickly. This is particularly useful for small businesses that may not have the spare time or budget to requisition new devices every time a new employee joins. Existing phones can easily be repurposed and given new numbers.

  • Quick installation

It’s very easy to get going once you decide to make the switch. Most of the technology offered is software-based, which means that it will already work on many of the telephony devices you have. Desk phones may only need to have an ethernet cable plugged in to connect to the Internet and mobile apps are available for smartphones. 


Where are cloud-based phone systems used?

Very often a business will make use of cloud-based phone systems as part of a broader unified communications platform. This allows for the easy integration of a cloud phone system with the other communication tools a business will often use, such as email and instant messaging. These platforms offer the same benefits, such as scalability, mobility, easy integrations, and more applied to all of a business’ communication tools. From enhancing internal communication and collaboration efforts for employees to providing smoother and more convenient contact points for customers, there are many reasons to start using a cloud phone system as part of a wider unified communications platform.