What Are the Pros & Cons of Cloud-Based Phone Systems?

January 25, 2024 9 min read

Chris Reaburn

Chris Reaburn

Pros & Cons of Using a Cloud Phone System

All businesses need an effective and reliable communication system. For most companies today, this means a cloud-based phone system that works via the internet. 

The flexibility and scalability of cloud-based phone systems make them an attractive choice for businesses of all sizes, from small businesses on the go to enterprises that run call centers. 

But is it the best choice for your business? 

In this post, let’s take a closer look at the pros and cons of cloud-based phones to help you make an informed decision.

But if you’re pressed for time, here’s all the information you need at a glance:

More cost-effectivePrices can add up
Better reliability and performanceRouters and switches required
Faster implementation and setupStable, high-speed internet required
Less maintenanceOccasional latency issues
Better featuresLimited location info for emergency calls
Better customer experienceOverwhelming for legacy users
Ideal for remote and hybrid work
Unified communications

What Is a Cloud-Based Phone System?

A cloud-based phone system uses Voice over Internet Protocol (VoIP) technology to connect phone calls. 

Unlike legacy technology, such as landline phones, VoIP phones don’t need any special hardware or infrastructure. There’s no reliance on copper wire networks to make or receive calls like traditional landlines. All you need is a high-speed internet connection to make VoIP calls. 

This makes it easy for businesses to start using cloud-based phone systems and enjoy advantages like lowered monthly running costs, better mobility for remote work, and hardly any maintenance. 

Let’s dive deeper into the benefits of using a cloud-based phone system in the next section. 

Advantages of a Cloud-Based Phone System

Cloud technology is increasingly the norm, which affords many benefits for businesses. From flexibility to remote work perks, these systems are changing the game in how employees connect, collaborate, and communicate. 

Let’s look at the upsides that make cloud-based phone systems a smart choice for growing businesses.

Lower costs

Cloud-based phone systems are more cost-effective compared to traditional telephone systems.

On average, a landline phone system costs businesses $50 per line each month for local or domestic calls. In contrast, VoIP plans start at less than $20 per line per month with international calling, video conferencing, and many other features.

Cloud phone systems are an effective way to trim communication costs. All you need is a stable internet connection and software that enables VoIP capabilities. 

This means you can cut down traditional phone-related expenses that you would have otherwise incurred, such as:

  • Setup cost and upfront investment for on-premises Private Branch Exchange (PBX)
  • Recurring maintenance costs
  • Add-ons for features like auto attendants, voicemail transcription, call queueing, etc.

With VoIP, you get free local numbers, toll-free numbers, and inexpensive international calls. A traditional landline can never give you the same bang for your buck.

Better reliability and performance

A cloud-based phone system is a great safety net for your business continuity plan — especially when something unexpected, like a natural disaster or a cyber attack, disrupts regular operations. 

Your business could face downtime and risks with a traditional phone system based in one location. In contrast, a cloud-based phone system operates from remote data centers with built-in backup and redundancy plans. If one data center has an issue, others take over seamlessly. 

This helps your business keep running smoothly, and your customers won’t be affected. Their information remains secure and readily available to your team, so you won’t lose connectivity. 

Cloud phone systems can thus offer reliable backup and consistent performance, helping your business stay up and running even during unforeseen challenges.

It is also a more dependable choice for everyday business operations. It is less prone to disruptions because there are fewer critical points that, on failure, would impact the service. This reliability makes it a solid bet for uninterrupted business-as-usual activities.

Faster implementation and setup

Your phone system shouldn’t get in the way of growing your business.

With a traditional phone system, adding scale can be time-consuming and expensive. You’d need to add new phone lines and ports to give each new employee their phone number, which can take weeks. That’s a lot of productivity lost.

With a cloud-based phone system, you can expand your business anytime. It scales to accommodate your team’s growing needs while keeping all your business communications running seamlessly.

Pro Tip: If you want to increase employee collaboration and productivity significantly, try swapping your traditional phone systems with a virtual phone service!

Less maintenance

Maintenance is an unnecessary overhead that can negatively impact employee experience. And the effort and investment required for maintenance can quickly add up. 

Legacy phone systems need at least one or more individuals dedicated to looking after the system’s upkeep. Most companies either end up overburdening their already swamped IT teams or spend more money to hire outside contractors. 

Besides, companies fail to account for the time and effort spent troubleshooting malfunctions and conducting repairs. Not only does this impact employee productivity and morale, it also slows down business growth. 

Instead, when using a cloud PBX system, your VoIP provider expertly handles all these hassles. They manage the phone system entirely off-site on the cloud and ensure uninterrupted service on priority. 

Additionally, they provide stringent service-level agreements (SLAs) and round-the-clock customer service to expedite issue resolution. And all this without disrupting your team’s tasks or the quality of business communication your customers expect.

Access to robust call features

Cloud-based phone systems offer state-of-the-art VoIP features that enhance business communication. Some popular features business owners deem valuable include:

FeatureCloud-based phone systemsTraditional phone systems
Advanced call forwardingx
Automatic call recordingx
Voicemail to email or textx
Call queues with on-hold musicx
Custom caller IDx
One-click conference callsx
Multi-level auto attendantsx
Call analytics and logsx

Clearly, cloud-based phone systems have advanced features that can level up your business communications. Besides, access to features helps your team communicate with customers better, constantly improving customer service quality. 

Especially if you run a call center, cloud-based phone systems help you operate it with confidence. You can also integrate your phone system with third-party tools like CRM or accounting software, building a centralized repository for your team.

The best part? A great service provider will let you add new features without hardware updates, complicated requests, or confusing jargon. You can tailor your cloud phone system as and when you need it, to suit your evolving business needs.

Improved customer experience

Customers today have moved on from being price-sensitive. In fact, they don’t mind paying a premium for excellent customer experience. Moreover, they are more likely to purchase products and services from these companies in the future. 

Recent customer service statistics confirm this:

  • 42% of consumers would pay more for a friendly, welcoming customer service experience.
  • 91% of customers are more likely to make another purchase after a great customer service experience.
  • 68% of customers said a positive customer experience significantly improved their brand loyalty.

Cloud-based telephone systems offer businesses enhanced flexibility, scalability, and accessibility to ensure a positive customer experience. 

Customers never have to wait due to the efficient management of call volumes, which redirects calls to the next available support team member. Customer information readily available to service agents results in a more personalized interaction, impressing customers. 

Besides, cloud-based phone providers also let service agents work from anywhere, providing uninterrupted support quickly and efficiently. After all, knowledgeable and happy customer service agents often mean happy customers!

Speed, quality, and perceptions of customer service modernity can be at risk when large businesses continue to use traditional landlines. 

Easily supports remote and hybrid work

The hybrid work model – a few days at the office and a few days of work from home – is now the new normal.

For businesses still using traditional phone systems, this is a two-fold issue. First, they have to maintain the existing infrastructure at the office. Second, they have to spend time and resources to empower their remote workforce

This includes providing employees with the right tools and all the customer information they need to do their jobs efficiently. 

Cloud-based phones are perfect for this use case. Remote work features are available out of the box without a complicated setup. Your team can use VoIP desk phones at the office and a business phone app when working from home. It is the best of both worlds!

No matter their work location, everyone on your team can:

  • Keep the same phone number and remain accessible to customers and coworkers
  • Make and receive phone calls with a VoIP softphone app
  • Use advanced features like call forwarding, virtual voicemail, and call recording
  • Communicate clearly with substantially better call quality thanks to HD Voice

Unified communications

Cloud-based phone systems make it easy to centralize all your business communications on a single platform, without changing existing infrastructure or telecommuting technology.

This solution, called Unified Communications as a Service (UCaaS), encompasses phone calls, video conferencing, instant messaging, conference calls, and file sharing.

UCaaS improves productivity and collaboration between on-site employees and remote teams. Everyone has access to the relevant communication tools they need for their day-to-day.

Cloud phone services accelerate employee onboarding and simplify virtual meetings. It removes the barriers and silos associated with older communication systems like traditional phones, which often lack any of these advanced features.

Cloud-Based Phone System Drawbacks

While cloud-based phone systems have several cons, no technology is flawless. There are inherent challenges that might be of particular interest to your business, making cloud-based phone systems less attractive as an option. 

Here are the potential downsides that come with running your business phone system entirely over the internet.

Prices can add up

Cloud-based phone systems today often charge on a per-user monthly basis. Over time, these costs can add up. 

You may be charged for add-on features you don’t even intend to use or incur metered prices for other features you heavily use. For small businesses, subscription prices might be steep compared to simply using existing traditional phone lines. 

However, most cloud-based phone systems today come with built-in collaboration tools. This eliminates the need for costly collaboration tools such as Zoom, Slack, or separate conference bridges

Besides, you also save on time and money spent on IT support, repairing system issues, and ensuring security and compliance, to name a few. 

All these benefits can offset the monthly cost of cloud-based phone systems, making them more cost-effective than seemingly cheap traditional phones. 

If you’re still unsure about how much Nextiva’s cloud-based phone system will cost your company, you can request a no-obligation price quote.

You need fast networking equipment

Cloud-based phone systems need high-speed broadband internet connections. 

Cloud-based phone systems use Wi-Fi to function, but Wi-Fi doesn’t work well through walls. If your office hasn’t conducted a wireless site audit, you might have some dead spots.

But there are easy fixes and affordable solutions for this problem. You might need to set up Quality of Service (QoS) for your network to prevent jitter

For larger offices, consider adding a mesh Wi-Fi network for maximum speed and coverage.

How VoIP Works

Doesn’t work without a stable internet connection

One thing can make or break all the benefits of moving your phone system to the cloud  — your internet connection!

If your internet connection fails, your cloud-based phone system could cease to work. And yet, a reliable internet connection is the only system requirement for cloud-based phone systems. 

But today, stable internet is everywhere! Almost every cafe gives you strong enough Wi-Fi for video calls and streaming. 

Over the past decade, internet speeds have increased, and so has its reliability. It is common to see 100+ Mbps speeds at home or work. This bandwidth could support more than 1,000 VoIP calls at once!

If you’re not sure how reliable your internet connection is, you can take our free VoIP capacity test to see if your network is ready for VoIP.

And if your ISP goes down, you and your team can answer calls automatically on your cell phones or get forwarded to a voicemail box for follow-up. There’s basically never a “busy signal” with cloud-based VoIP. 

If you don’t have another internet connection, call our support team, and we can handle these urgent requests.

Location info is limited for emergency calls

This won’t be an issue for most people, but internet-based phone calls to 911 don’t necessarily have accurate location data attached.

When internet-based calls are directed to an emergency call center (known as a PSAP), operators may not know your location or phone number. By default, calls arrive at the nearest PSAP based on the account holder’s address.

To overcome this, update your cloud phone system’s fixed address assigned to each business phone line. This setting is known as Enhanced 911 and you should become familiar with. When employees work from home or away from the office, you should update it promptly.

We recommend using smartphones for internet-based calls as GPS data and cellular triangulation pass location data instantly to nearby PSAPs.

Limited compatibility with analog devices

If you love traditional phone equipment like fax machines, you won’t really get excited about cloud phone systems. This equipment was in its prime in the 90s, but its time is limited today. 

It gets tricky if you need PSTN connectivity between your security systems or gates, so you might need to use an analog telephone adapter or an “ATA” for short. Conversely, cellular connectivity for these services is also widely available and has solid reliability. 

Tips For Moving Your Phone Service To The Cloud

We’ve seen our fair share of successes when companies upgrade to the cloud. It can be a bit intimidating, but with a little planning, you will be very successful.

Moving your office phone system to the cloud will bring benefits that a traditional landline can never match. The pros outweigh the cons.

Here are a few action items to make your migration to the cloud go smoothly.

  • Plan ahead – Forecast your company’s growth, network requirements, ISP bandwidth, and team workflow. 
  • Leverage powerful VoIP features – To make the most out of your cloud-based phone system, thoroughly evaluate your team’s use cases and the built-in features they will require the most.
  • Follow recommendations from your VoIP provider – When moving to a cloud-based phone system, ask plenty of questions. A reputable service provider will take the time to answer your questions and help you migrate smoothly.

When choosing your business communication system, there is a lot at stake. Cloud-based phone systems provide the right flexibility, scalability, and capabilities you need for a growing business. 

But choose the right partner in your journey to cloud-based phone systems. This will ensure a smooth transition to the cloud, optimized performance, and a more reliable experience for your customers and employees.

Chris Reaburn


Chris Reaburn

Chris Reaburn is the Chief of Strategic Execution at Nextiva. Known as "Reaburn" by friends/family, he is responsible for championing Nextiva's brand and products into the market in support of the company's vision to change the way businesses around the world work and serve their customers. With his previous leadership roles in the communications industry…

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