What is a Cloud Based Phone System?
On this page we breaks down absolutely everything you could want to know about cloud phone systems—and then some! True Dial provides small businesses with enterprise grade, Cloud VoIP phone systems for 40% less than what it's costing you now.
What Is A Cloud Based Phone System?
Cloud based phone systems are VoIP (Voice over Internet Protocol) based telephone systems, which are hosted by a phone service provider like True Dial. Cloud based phone systems come with more features than a traditional phone, including telephony features such as call routing, extensions, video conferencing, and more.
Cloud-based phone systems have been around for quite a while, becoming VoIP based around the 90s. Some companies even install their own telephony software on a server and connect their phones over the IP network. However, for small or medium sized businesses, operating your own cloud phone system would require IT costs associated with: SIP Trunking, PRIs to connect the phone system to PSTN, network maintenance, security precautions, and custom integrations.
If businesses want to take advantage of a cloud phone system without the overhead cost, VoIP service providers such as True Dial hosts cloud phone system software so small and medium sized businesses can purchase VoIP phone service over the internet.
What Are the Types of Cloud Based Phone Systems?
While the main focus of this article is to help you understand what a Cloud based phone system is, first you need to know the three different types of business phone systems.
The different types of phone systems are:
Key System Unit (KSU)
Private Branch Exchange (PBX)
Voice over Internet Protocol (VoIP)
For each system, there is a hosted (cloud-based) and non hosted (on-premise) version.
Key System Units (KSU) are the most basic type of phone system. These systems are only recommended for businesses with no more than 40 employees working as operators. This is largely due to the technical limitations of the system. It's simple, easy to use, and has all the basic features a business will need—yet lacks flexibility.
Private Branch Exchange or PBX is more advanced than the KSU and comes with more features such as automated call routing. With a hosted PBX, the hardware is in a data-center hosted by the service provider. Since the hardware isn't on-premise, businesses avoid the expenses associated with maintenance, security, and expansion while keeping the features and flexibility of a PBX.
Voice Over Internet Protocol: A Voice over Internet Protocol (VoIP) telephone system is the latest innovation; operators now have the ability to connect with a client on the other side of the globe, using the internet and a computer/smartphone. VoIP can be hosted in the Cloud, or On-premise, with pros and cons between the two.
There are several differences between Cloud based phone systems and On-premise VoIP phone systems. When it comes to cloud based vs. on-premise systems—your individual needs, resources, and constraints will determine what solution is best for you.
We're going to take a deep dive into the differences between a cloud based phone system and on-premise phone system so you can determine which is best for your business!
Table of Contents
How Does A Cloud Based Phone System Work?
Cloud-based phone systems work by converting your voice into digital packets (data) that is then sent over the internet to whoever is receiving the call. A cloud-based PBX (Private Branch Exchange) is then used to route the call. You can convert a traditional phone to a cloud-based phone system with an adapter; these adapters plug into a regular phone outlet or directly into your router. When you place a call, the phone will connect to a VoIP service provider like True Dial who verifies the information and places the call. The VoIP phone service provider handles everything from the routing and connection to the phone of who you are calling
Is a Cloud Phone System the Same as VoIP?
Sure is! Cloud-based phone systems utilize the internet to provide businesses and individuals with VoIP services on their phones and devices.
Cloud Based Phone Systems vs. On-Premise: What's the difference?
Cloud based phone system:
A cloud phone system, also known as a VoIP phone system, is when a phone service is provide through the internet by cloud, either on a device either owned or leased by the end user. Cloud phone systems are entirely digital.
With a cloud based phone system by True Dial, you will get a dial tone from your telecom, cable, or SIP Trunk provider. The dial tone will be directed to your location and connect to your phone system. With cloud based VoIP, the end user isn't responsible for upgrades, maintenance, or expansion of the phone system.
On-premise phone system:
An On-premise phone system is also known as a PBX or traditional phone system. An On-premise system is when a business's phone system is a physical device, and owned or leased by the end user. These On-premise phone systems can be VoIP or digital. With On-premise VoIP by True Dial, you will have a traditional dial tone from a telecom, cable, or SIP Trunk provider. Your dial tone will transmit directly to your location and connect to your phone system. With an On-premise phone system, the end user will have a server at their location or data center, and the end user is responsible for upgrades, maintenance, and expansion of the phone system.
What're the Pros & Cons of a Cloud based & On-premise phone system?
The biggest benefit to choosing a Cloud phone system for your business opposed to hosting an On-premise phone system is a reduction in the time and money spend maintaining your phone system. You could compare a cloud-based phone system to an email service. You pay the VoIP service provider for a hosted service, instead of creating your own.
A cloud phone system allows you to skip buying the server to host the phone system, the SIP Trunking necessary for connection, and you get to skip the configuration and security process associated with an On-premise phone system.
The biggest benefit to choosing a Cloud based phone system for your business opposed to hosting an On-premise phone system is a reduction in the time and money spend maintaining your phone system. You could compare a cloud-based phone system to an email service. You pay the VoIP service provider for a hosted service, instead of creating your own. A cloud phone system allows you to skip buying the server to host the phone system, the SIP Trunking necessary for connection, and you get to skip the configuration and security process associated with an On-premise phone system.
Security: VoIP phone system hacking is common if security precautions aren't taken. VoIP phone system hackers can take control of phone systems and make calls on your budget. You need a reputable business cloud phone system provider like True Dial; we're dedicated to running a secure VoIP phone service, so you have less headaches to worry about.
Usability: Business cloud-based phone system providers like True Dial make it incredibly easy to adjust your VoIP service. New team members can be added and new lines can be designated with just a few clicks. This makes your business much more efficient compared to hiring or outsourcing an IT person.
Cloud phone system features: Business phone system providers like True Dial integrate calling features that help your team stay connected throughout the day. Our phone systems allow you to take your office anywhere, and integrate directly to your CRM for seamless integration. Make calls with just a click.
Scalability: Since your cloud phone system is based on the internet, it enables you to support a remote workforce. Over 105 million people are part of the remote workforce; if your business lacks a VoIP phone system you're missing out on increased productivity.
How much does a Cloud-based phone system cost?
There are a several factors that will have an impact on the cost of your cloud-based phone system.
Features: Premium features like call waiting, forwarding, conference calling, video calling, etc... are usually included in cloud-based phone system service packages. Different features may have a different impact on the bottom line. It's always a good idea to carefully review service package options, determine which provides the most value, and what VoIP features will provide your business with the most leverage.
Installation: Depending whether you chose a Cloud based phone system or an On-premise VoIP phone system, the costs of installation will vary. On-premise VoIP phone systems will require a more hands-on approach, and configuration will depend on the set-up of your building. A Cloud-based phone system will be easier to install and maintain.
Location: Location will determine the pricing for your cloud-based phone system. Different business' VoIP phone system providers charge differently for geographic location; some international long-distance calls are charged by the minute depending on the cost of the location.
Security Needs: Your VoIP phone system provider will have their own call-security and encryption settings, but can be increased depending on the client's needs. Make sure you adjust your security based on your specific needs.
Bandwidth: The amount of data you use will have an impact on costs for your VoIP (Voice over IP) Cloud-based phone system. The more data you use, the more bandwidth you'll require. If your phone system is running on the same data as your broadband internet, this is especially true.
Is a cloud based phone system right for my small business?
Cloud based phone systems are incredibly reliable, as well as simple and easy to manage; for this reason, cloud-based phone systems are perfect for small businesses, as well as medium and large scale enterprises. In today's world, the internet connectivity and speeds are getting faster and more reliable, making cloud based phone systems increasingly attractive.