Cloud phone systems offer numerous advantages over landline telephones and on-premise PBX systems: cost savings and flexible pricing, mobility, advanced call management and team collaboration features, and third-party integrations to streamline business communications.
Whether you’re switching to cloud phone service for the first time or you’re re-evaluating your current VoIP provider, this review of the best cloud phone systems gives you the insights you need to make the right decision.
We’ve outlined the pricing and plans, standout features and integrations, customer support options, and more below.
Best Cloud Phone Systems for 2024
The most popular and reliable cloud-based phone systems are:
- RingCentral
- Zoom Phone
- Nextiva
- Vonage
- GoTo Connect
- Dialpad
- Ooma Office
- Grasshopper
- 8x8
- Intermedia Unite
1. RingCentral
RingCentral’s business phone system is a cloud phone and UCaaS platform best known for its 99.999% uptime, superior 24/7 customer service, and intuitive drag-and-drop Dial Plan Editor for up to 250 IVR call menus.
It’s an excellent cloud phone system for teams with a high daily call volume, as it provides ring groups with up to 16 phone numbers/group, advanced call routing strategies across all plans, and remote call forwarding. We loved the user-friendly desktop app, with feature-rich team chat channels and a spacious live-call interface.
Video collaboration capabilities include video meetings for up to 200 participants, unlimited audio conferencing, breakout rooms, and collaborative meeting notes.
Pricing and Plans
RingCentral Business Phone System offers three plans that range from $20 to $35 monthly per user:
- Core ($20 monthly): Unlimited domestic calling, 25 monthly SMS per user, 100-participant video meetings, team messaging with file sharing, 100 toll-free minutes per account, IVR, call logs
- Advanced ($25 monthly): Adds automatic call recording, call monitoring, 300+ integrations including CRM, real-time business analytics, 1000 toll-free minutes per account, 100 monthly SMS per user
- Ultra ($35 monthly): Adds unlimited HD video, unlimited file sharing, customizable business insights, 10,000 toll-free minutes per account, 200 monthly SMS per user
What We Like About RingCentral
- Team chat capabilities: In RingCentral team chat, users can create unlimited group channels with unique features like team huddles, task management and assignment tools, and threads.
- AI-based video meetings: The platform’s video meetings leverage AI for auto-generated summaries and transcripts, in addition to collaborative features like breakout rooms and built-in whiteboards
- Customizable analytics: RingCentral includes business analytics on the Advanced and Ultra plans. We were especially impressed with the Ultra plan’s “Pro” analytics, which includes a customizable dashboard with tons of metrics spanning user activity, channel usage, and historical call volumes.
Where RingCentral Falls Short
- SMS limitations: The three plans limit each user’s SMS allotment to 25, 100, and 200 respectively–which we found way too restrictive. Some alternatives support unlimited texting.
- Overwhelming feature suite: While RingCentral offers an abundance of features, some of the advanced tools, like analytics and call monitoring, can have a steep learning curve for new users
Who Should Use RingCentral?
- Teams seeking full UCaaS: RingCentral is not just a phone system but a complete UCaaS platform–with phone, chat, video conferencing, and texting. Its dynamic team chat can replace collaboration tools like Slack.
- Customer support teams: RingCentral’s queueing and IVR capabilities provide customer self-service, making it easier for your agents to handle inbound calls. It's a good solution for teams with multiple departments and complex inbound routing needs.
2. Zoom Phone
Zoom Phone is a cloud phone system designed to integrate with the Zoom Meetings video conferencing platform, allowing current Zoom users to access more advanced VoIP features without switching to a new, unfamiliar provider.
All Zoom Phone plans include unlimited auto attendants, voicemail transcription, on-demand/automatic call recording with recording transcription, 3-way conference calling, call queues (up to 50 callers/queue), and 24/7 live chat and phone support.
Zoom Phone’s industry-leading mobile app provides on-the-go access to a robust feature set including call monitoring, call recording, team chat, video meetings with mobile screen sharing and whiteboarding, and real-time call handling customization.
Zoom Phone Pricing
Zoom Phone is available as a standalone product or as part of the Zoom One UCaaS system.
Standalone Zoom Phone pricing options include the US/Canada Metered (pay-as-you-go) plan at $10 monthly per user, the US/Canada unlimited plan from $15 monthly, and the Global Select Plan with unlimited regional calling in a select country for $20 monthly.
- US & Canada Metered ($10 monthly): Desktop and mobile apps, per-minute calling in the US and Canada, domestic SMS, team chat with file sharing, US or Canada phone number, call monitoring, call recording, call parking
- US & Canada Unlimited ($15 monthly): Same features as above, with unlimited calling in the US and Canada
- Global Select ($20 monthly): Unlimited domestic calling in selected country
What We Like About Zoom Phone
- Flexible pricing options: Pricing options offer your choice between unlimited calling for a flat monthly fee and metered, pay-as-you-go billing for domestic and international calling
- Intuitive interface: The Zoom Phone interface fits snugly into a desktop and mobile app right alongside Zoom’s other channels, like video and chat, which our users were already familiar with
- Feature-rich app: We were impressed by the variety of features that Zoom Phone includes–call queueing, multi-level IVR, and call monitoring
Where Zoom Phone Falls Short
- Meetings cost extra: While Zoom Phone integrates well with Zoom One and Zoom Meetings, the phone system itself does not include these features. You must purchase Zoom One’s Business Plus plan for Zoom's dynamic meetings suite.
- Advanced analytics are an add-on: Real-time call queue analytics, wallboards, custom KPIs, and CSV report exporting require the $300/year Zoom Phone Power Pack add-on
Who Should Use Zoom Phone?
- Teams already using Zoom: We found the Zoom Phone app very easy to use, largely because we were already familiar with the Zoom interface. The Phone features integrate nicely with the video and chat tools.
- Internationally based teams: Zoom’s Global Select plan uniquely offers domestic calling in one of up to 48 countries, which is a great option for teams based outside the US. For teams that frequently call internationally, the provider has an add-on for unlimited calling in 19 countries.
3. Nextiva
Nextiva is a cloud phone system and unified communications tool that offers unlimited VoIP calling in the US/Canada, 45-minute video calls, instant messaging, unlimited virtual faxing, and 24/7 customer support on all plans.
All Nextiva plans include bundled toll-free monthly minutes, basic auto attendants with IVR call menus, call forwarding, a Dial by Name directory, custom business hour routing, and ring groups with sequential/simultaneous ringing for up to 10 phone numbers.
The NextivaONE app, accessible on desktop/mobile devices or directly in-browser, allowed us to access voice and video calling, team collaboration tools like screen sharing and file sharing, SMS text messages, and live/historical analytics within the same interface.
Nextiva Pricing
Nextiva pricing offers three monthly/annual Business Communication plans from $18.95 to $32.95 per user per month:
- Essential ($18.95 monthly): Unlimited voice calling in the US and Canada, 1:1 video meetings, team chat with 3 rooms, a toll-free and a local number, 1500 toll-free minutes per account, single-level auto attendant
- Professional ($22.95 monthly): Expands to 40-participant video meetings, multi-level auto attendant, CRM integrations, 1000 monthly SMS per user, 3000 monthly toll-free minutes per account
- Enterprise ($32.95 monthly): Unlimited video-meeting participants, call recording, voicemail transcription, 2000 monthly SMS per user, 12,500 monthly toll-free minutes per account
What We Like About Nextiva
- CRM integrations: In-call access to CRM data helped us provide personalized customer service and increased agent productivity
- Video meetings: Video conferencing and unlimited conference calling to connect remote teams
- AI analytics: Nextiva’s AI analytics add-on helped us identify roadblocks in the customer journey and monitor factors influencing customer satisfaction
Where Nextiva Falls Short
- Limited video capacity: Video calls are limited to 45 minutes on all plans
- High-tier call recording: Call recording is only available to Enterprise users
- Lackluster basic plan: The Essential Plan lacks SMS texting, CRM integrations, and unlimited conference calls
Who Should Use Nextiva?
- Teams seeking collaboration: Nextiva’s unified communications platform offers video conferencing and team chat, making it a great internal collaboration tool. However, the relatively low video participant capacity makes it a good fit for small teams.
- Users who are “on-the-go”: We enjoyed Nextiva’s mobile app, which provides all the collaboration features–including call controls, team chat, and video conferencing. It works well for teams whose employees often handle business while out of the office.
4. Vonage Business Communications
Vonage Business Communications (VBC) is a highly customizable cloud phone system with over 50 standard voice, SMS, and video conferencing with 200 participants. The platform also includes team chat, ring groups, IVR, and basic analytics.
With a 99.999% uptime, 24/7 customer service, and unlimited video conferencing with Vonage Meetings, Vonage is an ideal choice for startups or new businesses with a limited budget and a small staff. It comes in a desktop and mobile app, with unlimited domestic calling in the US, Canada, and Mexico.
Vonage Pricing
Vonage Business Communication offers three plans from $13.99 to $39.99 monthly per user.
- Mobile ($13.99 monthly): Desktop and mobile apps, unlimited domestic calling, unlimited domestic SMS, voicemail, IVR
- Premium ($20.99 monthly): Adds 200-participant video conferencing, team chat messaging, 20+ third-party integrations
- Advanced ($27.99 monthly): Adds on-demand call recording, voicemail transcription, ring groups
What We Like About Vonage
- Scalability: A highly scalable cloud phone solution that lets you select specific features individually instead of paying for bundled features you won’t use
- Business Inbox add-on: We enjoyed using the Business Inbox feature, an add-on that allows multiple users to share an omnichannel inbox that aggregates messages across multiple channels–SMS, social media, and messaging apps
- Calling features: We found it easy to use Vonage’s suite of live call controls like transfer, call parking, call hold, and call flipping between devices
Where Vonage Falls Short
- Essential features reserved as add-ons: Essential features like call queueing, online faxing, automatic call recording, and the AI virtual assistant are only available as paid add-ons
- Limitations of the basic plan: Vonage’s mobile plan does not include video conferencing or IVR, making a limited phone system
Who Should Use Vonage Business Communications?
- Teams that text a lot: Vonage’s cloud phone service includes unlimited texting within the US, which goes far beyond the limits that many competitors have
- Teams that call Canada and Mexico: All Vonage plans include unlimited calling across the US, Canada, and Mexico. Many alternatives don’t include Mexico in their unlimited area.
5. GoTo Connect
GoTo Connect is a cloud-based phone system with 100 built-in features like real-time analytics, individual and shared voicemail inboxes, and an Instant Response feature that automatically texts first-time callers back if an agent missed the call. It’s a UCaaS platform with 500-participant video meetings, VoIP calling, SMS texting, and team chat. Available on desktop and mobile, the phone system includes strong routing tools like IVR, queueing, and ring groups.
GoTo Connect provides local and toll-free numbers to help new businesses establish a local, familiar presence to increase consumer trust. Its color-coded visual dial plan editor makes optimizing call flows and customizing ring times straightforward.
GoTo Connect Pricing
GoTo Connect offers four pricing plans that range from a business phone system to a complete contact center. The provider does not publicly provide pricing information for any of the plans.
- Phone System: Unlimited calling to 50+ countries, video meetings with 250 participants, team chat, routing tools like IVR and ring groups, real-time and historical analytics
- Customer Engagement: Adds a shared user inbox, custom surveys, AI-powered messaging assistant, and webchat channel
- Complete CX: Adds customer-experience features like custom call campaigns, agent softphone, automatic queue callbacks, intelligent queue routing and agent skill assignment, and AI chat analytics
- Contact Center: A complete contact center that adds quality management features, agent screen recording, workforce management, and over 20 digital and social media channels
What We Like About GoTo Connect
- All-in-one functionality: GoTo Connect truly is a multi-purpose UCaaS platform. We found ourselves jumping from dynamic video meetings to team chat, to calls easily.
- Smart call routing: This platform had one of the most user-friendly dial plan editors we tried, with a drag-and-drop menu to customize your IVR menus and queueing system
- Real-time analytics: The Standard plan includes customizable real-time analytics for call volume and queue status, including caller hold-time reports that keep agents in the loop about queue activity
Where GoTo Connect Falls Short
- Basic plan limitations: GoTo Connect’s Basic plan limits teams to 20 users and only allows for 1 call queue, 1 ring group, and 1 dial plan/recorded greeting
- Pricing: While the platform offers an expanded calling area, GoTo Connect’s phone system is substantially pricier than many competing solutions
Who Should Use GoTo Connect
- Intricate and large phone systems: GoTo’s Standard plan includes unlimited call queues, ring groups, dial plans, and auto attendants, making a great fit for large teams
- Teams that call internationally: GoTo’s Standard plan supports unlimited calling to a whopping 50 countries, which outmatches all competitors on this list
6. Dialpad
Dialpad is an intelligent cloud phone system designed to optimize available agents and increase productivity levels with high-level voice, SMS, team chat, and AI-enhanced video meetings. The platform has a wide range of routing tools including multi-level IVR, custom call routing, ring groups, and call queues.
Dialpad Voice Intelligence uses machine learning to create highly accurate call transcriptions with speaker differentiation, automatic post-call notes, and instant video meeting summaries with suggested action items. Fallback call routing strategies, unlimited extensions, unlimited ring groups, and personal working hours provide small businesses with the same resources as enterprise-level competitors.
Dialpad Pricing
Dialpad offers three plans that range from $15 to over $25 monthly per user.
- Standard ($15 monthly): Unlimited calling in your country and North America, AI meetings for 10 participants, SMS, team messaging with file sharing, voicemail transcription, 3 ring groups, call recording, multi-level IVR, real-time call transcriptions, real-time analytics
- Pro ($25 monthly): Adds CRM and Microsoft Teams integrations, 25 ring groups, hold queues
- Enterprise: Adds 100% uptime and unlimited ring group
What We Like About Dialpad
- Use of AI: We were impressed by Dialpad’s built-in AI tools, including live video meeting transcriptions, real-time call transcriptions, and real-time analytics
- Virtual phone number selection: Dialpad offers business phone numbers from across the US, and in over 70 countries globally. We were able to find numbers in all the area codes we wanted.
- Chat rooms: Dialpad chat rooms, accessible on the desktop and mobile app, include file sharing, emoji responses, and buttons for one-click team huddles. Users can create unlimited rooms
Where Dialpad Falls Short
- Learning curve: Advanced AI features mean a higher learning curve
- Small video meeting capacity: Dialpad video meetings only support 10 users, which we found limiting
- Limited integrations: The solution only includes 9 software integrations, while some alternative UCaaS platforms offer dozens, or even hundreds
Who Should Use Dialpad?
- Teams seeking collaboration: Dialpad’s video meetings and team chat features facilitate internal team collaboration, with whiteboards, file sharing, and file storage
- Call centers and support teams: The app's queueing, custom call routing, and ring groups provide customer self-service to route inbound calls to the right agent
7. Ooma Office
Ooma Office is an easy-to-use cloud phone system with voice calling, SMS texting, and video conferencing for up to 100 participants. Each plan supports unlimited calling to the US, Canada, and Mexico. The platform has 50 standard features, enhanced and custom call blocking for up to 100 numbers, and integrations with popular third-party apps like Salesforce and Microsoft Dynamics.
Ideal for small, in-house businesses with under 20 team members, Ooma Office also includes dynamic custom caller ID, advanced hardware integrations, and a robust mobile app for Android and iOS users.
Ooma Office Pricing
Ooma Office has three plans, which range from $19.95 to $29.95 monthly per user.
- Essentials ($19.95 monthly): Mobile app only, unlimited calling in North America and Mexico, ring groups, IVR, call transfer, call parking
- Pro ($24.95 monthly): Adds desktop app, unlimited SMS texting in the US, video conferencing for 25 participants, call recording, voicemail transcription, analytics
- Pro Plus ($29.95 monthly): Adds advanced texting with messaging analytics and bulk texting, call queues, 100-participant video meetings, and team chat
What We Like About Ooma Office
- Uncomplicated interface: Ooma Office only includes simple features and channels–including basic call controls, SMS, and video meetings. This made it easy for us to learn.
- Queueing and ring groups: With multi-ring technology and ring groups, we massively increased our call answer rate while using Ooma
- Hardware availability: Ooma also makes and sells hardware VoIP phones, making the phone system a good fit for in-person offices
Where Ooma Falls Short
- Lack of features: Ooma’s platform does not include video calling, call recording, or call monitoring–which are important features
- No team chat: Ooma does not offer any native team chat messaging, requiring a third-party chat app
Who Should Use Ooma Office?
- In-person teams: Ooma includes features like hot desking and extension dialing, which make it a great tool for in-person offices and call centers
- Teams that prioritize toll-free numbers: Each Ooma account sign-up includes a free toll-free number, plus 500 minutes of inbound calls per month
8. Grasshopper
Grasshopper is a cloud phone system with VoIP calling and SMS texting, accessible via a mobile and web app. Users can make unlimited calls and texts across the US, and purchase business phone numbers from area codes throughout the US.
Grasshopper’s interface is simple and user-friendly, with essential call features: voicemail and call logs, contact list, SMS inbox, and call controls like transfer and hold. Set up simultaneous ring across multiple devices, with automatic text responses for missed calls.
Grasshopper Pricing
Grasshopper offers three pricing plans, each including the same features: Unlimited texting and calling in the US, call forwarding, voicemail transcription, automated text replies, and call reports. Plans cost from $15 to $55 monthly per account, varying by the number of supported users, phone numbers, and extensions.
- True Solo ($15 per account): 1 user, 1 phone number, 1 extension
- Solo plus ($25 per account): Unlimited users, 1 phone number, 3 extensions
- Small Business ($55 per account): Unlimited users, 4 phone numbers, unlimited extensions
Where Grasshopper Falls Short
- Limited communication channels: Grasshopper does not have video or team chat, which makes it a poor fit for internal team collaboration
- Lack of integrations: Grasshopper only integrates with two platforms–Google Voice and Skype–which is far fewer than many competitors
What We Like About Grasshopper
- User-friendly interface: We found it very easy to understand Grasshopper, on both the desktop and mobile versions.
- Automated SMS replies: Users can set automated text replies, which send in response to missed calls or first-time callers
- Voicemail: All Grasshopper plans enable users to set up a custom voicemail, and all inbound voicemail logs have automated transcription
Who Should Use Grasshopper?
- Teams who share phone numbers: Grasshopper’s pricing structure provides a preset bundle of phone numbers and extensions, but unlimited users. This can be a great value for teams that share phone numbers between multiple users.
- Teams that text a lot: Grasshopper’s unlimited texting in the US is a great option for teams that frequently send SMS to customers
9. 8x8
8x8 is a cloud phone system and UCaaS platform with VoIP, SMS, team chat, and video conferencing for up to 500 participants. The platform has a desktop, web, and mobile app with unlimited calling to 14 or 48 countries, depending on the plan. 8x8 boasts a solid base of routing and call center tools like multi-level auto attendant, call queues, and call monitoring.
It also has strong collaboration capabilities like team chat with file sharing, and interactive meetings that include polls and breakout rooms.
8x8 Pricing
8x8 offers two UCaaS pricing plans with quote-based pricing that isn’t posted publicly. Users can mix and match plan types.
- X2: Desktop and mobile apps, unlimited calling to 14 countries, SMS, video meetings for 500 participants, team chat with file sharing, call queues, IVR, CRM integrations
- X4: Expands unlimited calling to 48 countries, adds supervisor and call activity analytics, 8x8 Frontdesk app for receptionists, call monitoring with whisper and barge
What We Like About 8x8
- Video capabilities: 8x8 video meetings support 500 users, the largest capacity of any provider on our list. We enjoyed using the live streaming and found the moderator controls intuitive.
- Analytics and AI: The X4 plan includes impressive analytics, providing data about channel usage, call activity, and live queue status. We felt like it provided call center functionality at a reduced cost.
- Call monitoring: The phone system has built-in call monitoring that enables supervisors to listen in on calls, whisper private guidance, barge in on conversations, or take them over entirely
Where 8x8 Falls Short
- X2 plan calling restrictions: While the X2 plan supports unlimited calling to 14 countries, some of these countries only allow calls to VoIP and landline numbers–not mobile
- Lack of pricing transparency: The provider’s lack of pricing transparency makes it more difficult to compare 8x8 with alternative providers
Who Should Use 8x8?
- Teams that call internationally: 8x8’s two UCaaS plans support 14- and 48-country unlimited calling areas, respectively. It works very well for teams that call outside national borders.
- Those considering scaling into a call center: 8x8’s contact center plans build upon the UCaaS plans, using the same collaboration tools and interface. If your team is considering expanding to contact center functionality down the line, it could be a good choice.
10. Intermedia Unite
Intermedia Unite is a virtual business phone system and unified communications platform with VoIP, SMS texting, team chat, and video conferencing for up to 200 participants. The platform is accessible via desktop, mobile, and web app, and it integrates seamlessly with most of today’s VoIP phones. Plans include unlimited calling to 33 countries.
The phone system includes routing tools like voicemail and transcription, auto attendants, call recording, and basic call controls. Team chat includes file sharing, file storage, and an AI assistant.
Intermedia Unite Pricing
Intermedia Unite offers two pricing plans, at $27.99 and $32.99 monthly per user. Teams can mix and match pricing plans.
- Pro ($27.99 monthly): Mobile and desktop app, unlimited VoIP calling to 33 countries, SMS, video conferencing with 100 participants, team messaging and file sharing, auto attendant, call queues, supervisor analytics
- Enterprise ($32.99 monthly): Expands video meetings to 200 participants and 200 GB of file sharing, adds Salesforce integration
What We Like About Intermedia Unite
- Collaboration tools: Intermedia Unite acts as a team collaboration app, with internal messaging, file sharing, and presence detection features that can replace a tool like Slack
- Video meetings: The platform’s video meetings include a nice array of interactive and AI-based features. Users can share screens, record, and chat. AI provides live transcriptions and meeting insights.
- AI Assistant: We were impressed by Unite’s AI Assistant tool, which enables team collaboration. The tool can summarize messages and voicemails, create chat messages, and even write code.
Where Intermedia Unite Falls Short
- Pricy: The cheapest Intermedia plan costs $27.99, which is decently more expensive than the basic plans offered by many other providers
- Monitoring and queueing: Intermedia UNite does not include call monitoring, ring groups, or call queues–which could be critical for teams providing customer support
Who Should Use Intermedia Unite?
- Teams that call internationally: Both Intermedia Unite plans support calling to 33 countries, providing excellent value for as little as $27.99
- Teams seeking to leverage AI: The platform embeds AI into video meetings and team chat, helping agents collaborate and answer customers more easily
Research Methodology: How We Ranked Our Choices
To evaluate and rank the cloud phone systems on our list, we considered all the most important aspects of a cloud-based phone system.
Specifically, our research methodology compared the following factors:
- Price and value: While a VoIP phone system must offer strong features, the price point and “bang for your buck” are similarly important. We considered each product’s overall value for the price, using this as a primary guide for our rankings.
- Features: We considered the breadth of features that each software offers, assigning higher rankings to software with more features. Specifically, we looks for features like call controls, a dashboard interface, voicemail, routing and call distribution, analytics, and communication channels
- Routing capabilities: We looked for cloud phone systems with customizable inbound routing and queueing, which provide customers with self-service and help navigate calls to the right team member
- Call quality: While testing each product, we made calls and noted the audio quality. Our rankings prioritize VoIP providers with clear audio and minimal latency or jitter.
- Communication channels: We prioritized phone systems that offer not only voice calling, but other communication channels–SMS, collaborative team chat, and video conferencing
- Usability: While testing these products, we compared their software dashboards and user experience. We gave higher rankings to the products that felt intuitive and user-friendly.
- Integrations: Ideally, your VoIP phone system should integrate with the other software and communication tools your company already uses. We compared each provider’s library of compatible software and gave better rankings to products that supported more third-party integrations.
What is a Cloud Phone System?
A cloud phone system is business communications software hosted offsite, in the cloud, by a third-party provider. Cloud phone systems are powered by VoIP technology, meaning they facilitate voice calling via an Internet connection, not a physical connection to the wired PSTN network like traditional phones.
Because cloud phone servers are not physically installed, housed, and maintained onsite by the end user, they are not limited to a single location. Agents and admins can access their complete business phone systems from any location and on any device with a working Internet connection within the softphone interface.
This flexibility makes cloud phone systems ideal for today’s remote and mobile workforce, while scalable cloud phone pricing with bundled tier-based plans and add-on features let your phone system evolve with your business.
How Does a Cloud-Based Phone System Work?
A cloud-based phone system compresses voice sounds into digital audio data and transmits them across the Internet to the recipient’s local network and device. This voice-over-IP (VoIP) data transmission occurs between all call participants, continuing until the conversation ends.
Here’s a more in-depth breakdown of how cloud-based phone systems work:
- Cloud-based VoIP software
- Virtual phone numbers
- Making a call over the Internet
- Active call tools
- Servers transmit call data between users
1. Cloud-Based VoIP Software
A cloud-based phone system relies on software, accessible via a web browser, desktop and mobile app, or an on-site hardware element like an IP PBX. Each VoIP service provider offers a monthly or yearly subscription, granting access to VoIP telephony and a virtual phone system. VoIP software typically includes an app dashboard where users can make calls, send texts, check voicemail, and access other unified communications tools.
2. Virtual Phone Numbers
Once a user installs a VoIP app, they can purchase phone numbers for the cloud-based phone system. VoIP telephony uses virtual business phone numbers, which aren’t restricted to a physical address like traditional landline numbers. Account administrators can usually purchase virtual DID numbers directly from the administrator portal and assign these numbers to users based anywhere. By logging into the app with the right credentials, remote employees can instantly access their business number and make calls.
3. Making a Call Over the Internet
When a user places a call from their VoIP system, their software uses a signaling protocol, such as SIP protocol, to establish the connection between call participants. Session Initiation Protocol (SIP) securely retrieves each participant’s information and initiates the call, before employing a media exchange protocol like Real-Time Transport Protocol (RTP) to transmit the media during the live call.
4. Active Call Tools
While on an active call, VoIP users typically have access to several features through their software dashboard. Users can manage call controls like call parking, forwarding, transfer, mute, and hold. Most software displays customizable contact profiles, where users can view information about the customer they called.
5. Servers Transmit the Call Data
During the active call, each end user sends and receives data in real-time. Each user’s device picks up their audio and sends it to their local network, which forwards the audio to a SIP proxy server assigned to each user by their provider. These proxy servers route VoIP audio data over the Internet to all other endpoints. The VoIP service provider can convert audio data to analog signal when necessary for landline call participants.
Compare Cloud Phone Systems vs Traditional Landlines
Cloud phone systems bring a unique experience that differs significantly from traditional landlines. Here’s a quick comparison:
Cloud Phone System | Traditional Landline Phone | |
Installation and Setup | - No hardware installation or setup, just pay a monthly subscription | - Install primary rate interface (PRI) lines, phone jacks, and physical phones |
Hardware | - Works with existing hardware including desktop/mobile devices
- Additional hardware like headsets/desk phones is optional |
- Requires wired connection to the PSTN
- Hard phones, phone jack, outlets, cabling, physical onsite server etc. |
Scalability | - Provides several tier-based bundled plans and add-on a la carte features
- Can quickly add users/features/change plans directly on provider website |
- New phone lines must be physically installed on-site
- Limited features mean limited scalability |
Costs | - Monthly service plan with included VoIP taxes and fees | - End user must pay for the server, compatible hardware, ongoing maintenance, long-distance calling, installation/setup, etc. |
Call Quality | - HD audio with background noise suppression
-Call quality impacted by available bandwidth and strength of Internet connection, multiple voice codecs with automatic bandwidth adjustments |
- Limited to analog audio, sound fidelity varies |
Standard Features | - Call forwarding, call routing, call hold/transfer, call queueing, third-party integrations, built-in live/historical analytics, visual voicemail, IVR+ACD, etc. | - Standard voicemail, call transfer, some call forwarding
|
Maintenance | - Very low maintenance–only managing the computer and internet connection | - Medium maintenance–including the phones, PRI phone lines, wall jacks |
Security | - Less secure than landline, but still relatively safe. Call data is encrypted.
- Vulnerable to hacking |
- More secure and private than VoIP. Copper wires are difficult for attackers to infiltrate.
- Vulnerable to wiretapping |
Cloud Phone System Features
Cloud phone systems also include more advanced features than traditional landlines, like:
- Business phone numbers: Local, International, Toll-free, Vanity, user extensions
- Advanced call routing: List-based/fixed-order routing, skills-based intelligent call routing, time/language-based routing, round robin routing, most idle routing, relationship-based/VIP routing, etc.
- Visual voicemail: Voicemail transcription with voicemail-to-email and voicemail-to-text
- Call recording: On-demand/automatic call recording with pause-resume recording and searchable cloud storage
- Call monitoring: Live call monitoring, call barge, call whisper, live in-call coaching, automated agent assist, agent performance evaluations and activity monitoring
- Interactive voice response (IVR): Customers interact with a pre-recorded call menu prompt to direct their own calls (or handle entire support issues) without a live agent
- Call queueing: Automatic call queueing based on IVR responses/number dialed, estimated wait times/custom greetings, automatic callbacks let customers schedule their ideal callback date/time
- Call analytics: Real-time/historical, template-based/custom analytics and KPIs like Average Handle Time (AHT), missed call ratio, CSAT/NPS scores, FCR, AI analytics like Natural Language Processing, machine learning, customer sentiment analysis, and trend forecasting
- Integrations/APIs: Third-party integrations with CRM systems, helpdesk software, marketing tools, video calling and team chat apps, file sharing and calendaring tools, cloud storage platforms–plus developer APIs to build custom cloud phone system functionality
- SMS texting: Two-way customer-agent texting, group texting, automated outbound SMS alerts and reminders, MMS messaging
Benefits of a Cloud Phone System
- Cost savings: Free/unlimited local and long-distance calling, affordable international calling, flexible pay-as-you-go pricing or volume/committed use discounts, doesn’t require expensive premise-based equipment, provider handles ongoing maintenance, advanced features increase first call resolution (FCR) rates and lower cost per call
- Mobility and flexibility: Ideal for remote/blended teams, cloud phone systems are accessible on any device with an Internet connection. Agents can take calls on their preferred devices from any location and switch devices during active calls
- Quick setup process: Businesses can use existing equipment, port in existing business phone numbers, and add users/features with a few clicks. Cloud phone system providers offer onboarding, training webinars, and custom setup processes if needed
- Improved customer satisfaction: Call management features eliminate or reduce call hold times and connect customers to the best available agent, IVR/virtual receptionists provide 24/7 customer self-service, CRM integrations and call notes empower personalized customer service
- Increased productivity: Workflow automation, auto dialers, call recordings/transcriptions, real-time team collaboration, meeting summaries, and agent assist eliminate time-consuming manual tasks and decrease the margin of human error
- Ease of use: Quick installation and setup process, intuitive and customizable agent dashboards, on-demand or custom software training webinars
Challenges and Limitations of a Cloud-Based Phone System
- Requires sufficient bandwidth: A VoIP call requires about 300 Kbps of bandwidth to ensure strong sound quality. If your local network has too much traffic or a poor internet connection, you may experience jitter, latency, or dropped calls.
- Learning curve with new features: Some users familiar with an old phone system may face a learning curve when adapting to cloud-based VoIP software. Many cloud phone systems include a dashboard interface and advanced call controls. While these are valuable tools, it may take a few weeks for staff to adjust.
- Hidden fees: A VoIP system’s monthly cost usually includes not only the subscription itself but some additional taxes and fees that can add several dollars monthly per user.
- Setup confusion: Some companies struggle to get new users set up with phone numbers. Occasionally, a user’s phone will automatically send calls to voicemail, or fail to ring in response to an inbound call. Some administrators also struggle to create queues and IVR menus.
- Hacking vulnerability: While VoIP services encrypt call data and are generally quite secure, VoIP calls and cloud-based phone systems can be vulnerable to hackers and other online threats.
- Harder for emergency services to locate: Since cloud-based phone system phone numbers aren’t linked to a physical address, it’s harder for emergency dispatch services like 911 to track a user’s location when the user calls
How to Choose a Cloud Phone System
Key factors to consider when choosing a small business cloud phone system are:
- Value and pricing structure: Does the provider offer pay-as-you-go or bundled voice call minutes, tiered plans or a la carte add-ons, a free trial, contract-based or volume discounts?
- Available integrations: Is the cloud phone system compatible with any third-party platform you’re using now or plan to in the future? Are APIs available?
- Security and reliability: Does the platform have an SLA-guaranteed 99.9% minimum uptime, global points of presence, automatic data backups, backup power sources, and real-time service alerts? Is it HIPAA, PCI, GDPR, and SOC 3 compliant? Does it offer SSO, meeting passwords, and 24/7 network monitoring with end-to-end encryption?
- Customer support: Is 24/7 customer support available, and if so, on what channels? How long does it take customer service to respond to and resolve an incident? Is paid priority support available?