What Does It Mean to Have a Cloud Based Phone Service?

cloud phoneCloud based phone services still use the same VoIP (Voice Over Internet Protocol) method of making telephone calls as other VoIP providers such as Comcast and Vonage. The biggest difference is that with cloud based phone services, businesses do not need any type of hardware such a modems, PBX boxes, adapters, etc. The service provider hosts all the additional network hardware that the business needs to make phone calls over the Internet.


The obvious major advantage of cloud based phone service is that businesses and their IT personnel do not have to worry about connecting VoIP hardware, which in some cases, can be quite a chore. In most cases, even non-technical employees can set up the software for a cloud based VoIP service. They also do not have to work about maintaining or upgrading the equipment because the VoIP provider takes care of that for them. Additionally, if there is a problem with the phone service, the company can call and ask the service provider to fix it instead of burdening their in-house IT staff or waiting for a contractor to come on-site.

Cloud based phone service are also less susceptible to down time than premise-based VoIP services. Employees can also set up access to their work phone number on mobile phones and/or iPad. Some companies, such as Comcast, also offer the ability to for cloud based phone users to seamlessly integrate devices so that users can switch phones without interrupting the call. Like a VoIP services, another big attraction is that businesses can make long distance calls anywhere in the country for the same flat rate monthly per user.


Even major service providers like Google down have “black-outs” or service interruptions. Unfortunately, since you rely on their hardware you also have no way to push them to resolve it. With a location-based VoIP system, you can get your IT staff working on it immediately, assuming that your business has an IT manager or an IT department. However, overall, cloud-based systems are more reliable than on-site VoIP phone systems because service providers want to maintain customer satisfaction.

Several businesses that have switched from PBX hardware systems to cloud based VoIP service have reported a significant savings because they do not have to purchase hardware and have the system installed on their network. Even though it is a cloud-based solution, some hardware might be required. For example, in order to use older phones with some online VoIP services, companies may need to purchases special adapters or upgrade their phones.

Cloud based VoIP services typically charge a per-user monthly rate, so the number of employees who use the service greatly effects pricing. Smaller to medium businesses may see significant cost savings, but many enterprise businesses are leery to make the switch because they are not certain it is cost effective.

The idea of switching to VoIP from a traditional public telephone system is a relatively new concept that many businesses are struggling to accept. Some businesses find VoIP to be more cost-effective, and in the case of cloud based VoIP, employees can be more productive as well. I you are trying to make a decision for your business, check out all your options and make an apples for apples comparison between what you are spending now and what the upfront and monthly costs of switching to cloud based VoIP will be to see if it is the right solution for your business.

About the Author: Nolan Mosler is a business consultant who often helps small business owners find the best cloud based phone services, free fax services, and anything else they can use to reduce costs and increase productivity.

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