What is a cloud phone system? How can it benefit you?

By | December 1, 2020

A cloud phone system is the digital avatar of on-premise phone systems. They come equipped with several modern features that make work and communication easier.

In 1956, a 5-megabyte drive weighed more than 2,000 pounds and required a whole cargo plane for transportation. Today, the world creates at least 2.5 quintillion bytes of data a day. And it requires no plane or a pin for storage.

Guess what has made us capable of creating, processing, storing, and retrieving such humongous amounts of data instantly? Cloud computing. The quintillion bytes of data that we create is stored on cloud servers that keep growing in size and volume every minute.

Online shopping. Taxi-hailing. Video streaming. Music streaming. Social media zombie scrolling. Almost every single online activity that we do as a routine has cloud power in its backend. It has become a backbone made of steel rods for the information technology world.

If that is the case, telephony, which is the primary means of communication, should also get on to the cloud bandwagon, right?

At least 2 decades have passed since telephony has moved to the cloud. However, it is only recently cloud telephony has become accessible, most importantly usable for the masses.

In fact, chances are that you might be already using a cloud phone system right now even if you don’t realize it. Do you want to know what a cloud phone system is?

Cloud phone system - Do you want to know what it is?

What is a cloud phone system?

A cloud phone system is a phone system that lets you make, take, or manage calls over an internet connection instead of a traditional analog (referred to as PSTN) connection. 

Cloud phone systems require zero telephony hardware and run on cloud-based servers that are hosted online. A cloud phone system uses a CTI (Cloud Telephony Integration), a web application, or a mobile application to enable telecommunication. 

One technology, many aliases

Apart from ‘cloud phone system’, they are also referred to by several other terminologies like:

  • VoIP (Voice Over Internet Protocol) phone
  • IP (internet protocol) phone
  • Internet phone
  • Cloud phone
  • Software phone
  • SIP (Session Initiation Protocol)
  • Virtual phone

How is a cloud phone system different from its ancestors — the physical phones that use analog cables and PBX boxes for connectivity?

How is a cloud phone system different from an on-premise phone system?

A cloud phone system is a more technologically advanced form of analog phone systems. It uses VoIP as the mode of transmission of voice data.

As a result, it is capable of offering far more capabilities and benefits than on-premise phone systems.

The table below lists the differences.

Feature Cloud phone system On-premise or Analog phone system
Connectivity Broadband internet Physical cables
Server type Cloud PBX On-premise PBX hardware
Bandwidth requirement 10 kbps 64 kbps
Capabilities Voicemail, software integrations, mobile apps, etc. Incapable of handling voicemail or integrations
System updates Over-the-air upgrades Manual installation and maintenance
Installation Using a PC, laptop or smartphone PBX, circuit boxes, handsets, line connections, and copper wires
Application Ideal for all scales and types of enterprises Best for closely located and always physically available teams

Alright, so there are obvious feature differences between both forms of telephony. But, how does it benefit you? What unique benefits does a cloud phone system offer?

15 undeniable benefits of a cloud based phone system

Cloud phone systems enrich business communication and collaboration with a host of benefits. These are features that compound what erstwhile on-premise phone systems have been providing. In other words, by choosing a cloud phone system you will not miss out on any benefits of an on-premise system, instead, you will be getting more with a cloud phone system

1. Future-proof

With the massive proliferation of smartphones and tablets, landlines have already lost their prominence. Compared to 2004, when more than 90% of the US had already landline phones, today less than 40% use a landline. Landlines are going down while smartphones and IP phones are becoming the primary means of communication.

Studies also suggest that cloud telephony is gathering momentum like never before. The global market for Cloud Telephony Service estimated at US$13.5 Billion in the year 2020, is projected to reach a revised size of US$40 Billion by 2027 (Research And Markets). Clearly, cloud telephony is the future. It ensures that your business is future-proof when it comes to telecommunication.

2. No messy maintenance

Cloud phones require no physical cables, desk phones, or physical PBX boxes. They require literally zero telephony hardware. That drastically reduces the need to maintain your phone systems. You don’t have to bother about repairing or replacing desk phones when they break or when they become obsolete.

3. Instant onboarding

A cloud phone system offers instant onboarding. They usually take the form of a SaaS product that you can sign up, set up, and start using on your own, without any hand holding. Also, you can set up call flows, IVR menus and sub-menus, set up call routing rules, and much more in less than a day or so.

4. 99.9% uptime

A phone system that rarely goes down or becomes inoperable is the best companion for any business. That said, cloud phone systems offer 99.9% uptime. As long as your internet connectivity is working, your cloud phone system will also work without fail. Also, they are immune to physical disruptions like broken cables, defunct desk phones, etc. They can survive even natural calamities that usually make on-premise phone systems unusable.

5. All-device friendly

You don’t need a dedicated device to make a cloud phone system. Your existing laptop, smartphone, IP phone, or any telephony device that can connect to the internet is sufficient. A cloud phone system takes the form of a web or mobile application that can be accessed over a web browser or a mobile app. That makes it an all-device friendly phone system.

6. Scales with your business

You may not be able to forecast with certainty how fast your business will scale. However, you can be certain that the cloud phone system can scale at the pace of your business. You can quickly buy new virtual phone numbers, add more agents, expand the IVR menu, create multiple routing rules, and do much more to meet your business needs. There is no need to enter into lock-in periods for resources that you may not require.

7. Superior voice quality

A cloud phone system uses VoIP (Voice over Internet Protocol), an internet-based voice transmission technology. It offers digital clarity to voice data and hence is regarded to be superior to analog connections. Akin to cable TV and HD streaming over the internet.

8. Minimal investment

A cloud phone system does not demand space to fix telephony hardware, desk phones for each agent, or any lock-in agreements for long durations. It requires minimal investment to get started and scale. Also, the cost of a VoIP phone system is also significantly less compared to on-premise phone systems.

9. Provides analytical insights

Data can drive better decision-making. Telephony data, relating to average handle time, service level targets, CSAT score, etc. can shed light on how your phone support or cold calling teams are faring. Cloud phone systems give such data in the form of self-explanatory charts and graphs. They make it easy to consume data by showcasing them as reports. In fact, most popular cloud phone systems also offer the convenience of creating your own custom reports to have a look at specific data that you might be interested in.

10. Facilitates remote working

No matter where your team members are located, a cloud phone system can connect them together for efficient remote working. Like mentioned earlier, cloud phones do not need any dedicated hardware. That allows your remote teams to use the phone system from where anywhere they are and whenever they want. In essence, that is true remote working. And a cloud phone system facilitates it.

11. Works for any industry or function

You can be an eCommerce business owner, a not-for-profit organization, a healthcare provider, a government agency — literally anyone. You can still use a cloud phone system. It is not restricted to specific industries or functions. The common misconception is that phone systems are largely used by sales and support teams. On the contrary, you can bring an entire organization on the same line with a cloud phone system.

12. Local office, global presence

In the past, if you wanted to scale your business, you had to rent a physical office and also set up telephone lines to serve local inquiries. With a cloud phone system, there is no need for any of that. You can have an office in the US and expand your operations in the UK, Australia, and or anywhere in the world. Virtual phone numbers help with that. Virtual phone numbers are phone numbers that do not need a landline or SIM-based phone connection. They help you set local offices across several locations even if they do not have a local office there.

13. AI voice capabilities

We are inching close towards an AI-first world. All high-volume, repetitive, and programmable tasks are being assigned to AI machines. They are capable of performing those tasks with more precision and accuracy than us.

The influence of AI in cloud telephony is also growing in a steadfast manner. Especially in speech recognition and self-service areas where AI can provide much more accuracy and scalability than manual operations. The good news is cloud phone systems are AI-ready. They can be easily integrated with AI voice features, or integrated with other AI systems that can double their capabilities. Ultimately, this leads to a significant increase in productivity.

14. Host of integrations

A cloud phone system is like any typical software that can easily integrate with other software applications. For example, if you are using a CRM system, you can easily integrate the cloud phone system with it to extend its usability. The integration will make it possible to manage customer information as well as orchestrate telephony operations from a single window. It eliminates a lot of effort otherwise required for record management, syncing call notes, and the trouble of hopping from one application to another.

15. Efficient collaboration

With a cloud phone system, you do need your team members to be in the same room. The customer-facing agents, technical experts, and supervisors can be located in multiple locations. With call conferencing capabilities like call transfers, they can be easily brought into the call for resolving customer issues. Also, unlike on-premise systems, cloud phone systems offer advanced features like call notes, warm transfers, creating a support ticket on a helpdesk system, etc.

Cloud phones: Yay or Nay?

Would you move to the future or stay stuck with the past?

The old phones are dying, or already dead. It is time for cloud phones. A new world order where connections are stable, voice quality is superior, flexibility is a given, and scalability is guaranteed. 

The cloud is everywhere. It is all around us. Even now when you are looking at your screen, you can feel it at work. 

So, if given a choice, would you like to stay with the past or move into the future with a cloud phone system?

The red pill or the blue pill. What’s your choice?

Cloud phone system - Red pill or blue pill

Illustrations by Mahalakshmi Anantharaman


About Freshcaller

Freshcaller is a modern-day cloud phone system for customer support, sales, and remote working teams. With its cloud-based architecture, Freshcaller brings together the best of legacy features like IVR and advanced call routing capabilities like Smart Escalations, Customizable Performance Reporting to help you set up state-of-the-art phone operations. Freshcaller offers phone numbers in 90+ countries, requires zero phone hardware, and is extremely easy to use.

Visit the Freshcaller web page for more information.

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