What are the Pros and Cons of a Cloud-Based Phone System?

April 15, 2020 9 min read

Julie Bai

Julie Bai

Cloud-based phone systems use Voice over Internet Protocol (VoIP) technology to connect phone calls. What it doesn’t use is legacy technology like analog telephone lines or any on-premises hardware. All you need is a high-speed internet connection.
Running your phone service in the cloud has many advantages, like lowering your monthly business phone costs and improved mobility for remote workforces.
From small businesses on-the-go to large enterprises that operate call centers, thousands of businesses enjoy the flexibility and scalability that only a cloud-based phone system can deliver. But are they really for everyone?

Our in-depth breakdown of the pros and cons of cloud-based phone systems should help you make the best decision for your business.

Cloud-Based Phone System Pros

We’ll first start with the advantages of running your company’s phone system in the cloud.

Lower costs

Cloud-based phone systems are much cheaper than traditional, on-premises telephone systems. If you’re looking to streamline your communications expenses, this is a no-brainer.
Why are the costs so much lower? Because cloud phone systems rely on your internet connection while traditional phone lines involve expenses such as:

  • Upfront investment into an on-premises PBX.
  • Recurring maintenance costs.
  • Add-ons for features like auto attendants, voicemail transcription, call queueing, and more.

A modern VoIP solution can actually lower your phone bill by up to 60%.
Lower prices are possible because of free local numbers, toll-free numbers, and inexpensive international calls. A traditional landline will never give you the same bang for your buck.

Better reliability and performance

Did you know that a cloud-based phone system will help you keep your business up and running even when a disaster hits?
Think about some things that could go wrong for your business that are outside of your control, like natural disasters, cybersecurity attacks, and even human errors.
Can your business cope with these risks? How would your customers be affected? Would their information be protected? The downside of an on-premises PBX system is that it relies on that single location. That’s more risk than most businesses can afford.
Conversely, a hosted PBX option relies on remote data centers and uses redundancy. This means if one data center goes down, others will pick it up and your service will continue working uninterrupted.
Related: Is VoIP Reliable? Nine Useful Tips You Must Know Before You Make The Switch

Faster implementation and setup

Your phone system shouldn’t get in the way of growing your business.
With a traditional phone system, growth can be time-consuming and expensive. To give each new employee their phone number, you’d need to add new phone lines and ports, which can take weeks. That’s a lot of productivity lost.
With a cloud-based phone system, you can expand your business at any point. It keeps all your business communications running, no matter how quickly your company is changing.
Once you set up a virtual phone service, your employees will significantly increase their collaboration and productivity throughout the day.

Less maintenance

Traditional PBXs aren’t just expensive to set up, but they require tons of effort and investment to maintain.
Legacy phone systems need at least one or more people dedicated to looking after it regularly. That burden either falls on your busy IT staff or requires you to hire outside contractors. Malfunctions and repairs can make this even more difficult.
cloud PBX system is much more cost-effective, as your VoIP provider handles all the small details. They manage it entirely off-site and it’s their priority. They’ll handle any issues that come up and answer any questions you have.
The top cloud business phone service providers stand behind their solution by providing exceptional customer service. Look for ones that provide live assistance around the clock. Even if you don’t need it, you’ll appreciate they are standing by ready to help.
This will free up your IT team to focus on more important work.

Access to robust call features

A cloud-based phone system will provide you with access to virtually any VoIP features you might need. Some examples include:

  • Advanced call forwarding
  • Automatic call recording
  • Voicemail to email or text
  • Call queues with on-hold music
  • Custom caller ID
  • One-click conference calls
  • Multi-level auto attendants
  • Call analytics and logs

This means you can maintain quality customer service even during busy seasons. If you have a call center, you can operate it with confidence.
You can also integrate your phone system with third-party tools like CRM or accounting software. This will help you build a single space for running your business operations.
The best part? A great service provider will let you add new features without hardware updates, complicated requests, or confusing jargon. You’ll be able to tailor your cloud phone system on the fly to suit any of your business needs.

Improved customer experience

Your customers no longer want products at the lowest prices. They crave excellent customer experience whenever they speak with your team.
Recent customer service statistics confirm this:

  • 70% of consumers say they have already chosen to support a company that delivers excellent customer service.
  • People will pay 17% more to do business with firms with reputations for outstanding customer service.
  • 52% of consumers say they have made an additional purchase from a company after a positive customer service experience.

Your technology shouldn’t get in the way of providing an excellent customer experience. A cloud-based phone system with efficient call routing, high uptime, and mobility options for remote work limits technology shortcomings.
Related: 12 Customer Service Trends You Must Try in 2020

Easily supports remote work

As working from home becomes increasingly relevant today, many businesses have made plans to build a remote workforce. Traditional phone systems with outdated PBX systems and clunky wiring just can’t meet today’s needs.
Remote work features are available out of the box without a complicated setup. Your team can use VoIP desk phones if they wish, or skip them entirely. Or you can let them download a business phone app to get up and running. It’s all up to you.
No matter their situation, 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.
  • Benefit from advanced features like call forwarding, virtual voicemail, and call recording.
  • Communicate clearly with substantially better call quality thanks to HD Voice.

Related: Remote Office Phone Systems: Features, Costs, and Benefits

Unified Communications

When your phone system works over the internet, it’s easy to centralize all of your business communications in a single platform without meddling with the infrastructure and telecommuting technology.
This solution, referred to as 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.
A cloud-based phone system makes employee onboarding quicker and meetings more efficient. It removes the barriers and silos that came with older communication systems—and you get to be in the driver’s seat.

Cloud-Based Phone System Cons

It’s hard to deny the advantages of a cloud-based phone system, but there are a few potential downsides that come with running your business phone system entirely over the internet.

Faster networking equipment is needed

One potential downside of a cloud-based phone system is the need for high-performance networking equipment like routers and switches.
The job of a router is to segment networks, assign IP addresses, and shape network bandwidth. Older routers may be incompatible with large-scale VoIP implementations.
Wi-Fi doesn’t work well through walls, and as more employees use laptops and softphones, they’ll likely use a wireless connection. If your office hasn’t conducted a wireless site audit, you might have some dead spots.
There are a few solutions that are easy and affordable to implement.
Take the time to update the firmware of your router for additional features and fixes. If you’re ready for an upgrade, check out our recommended routers that are optimized for VoIP. If you have a large office, consider adding a mesh Wi-Fi network for maximum speed and coverage.
Related: 12 Best VoIP Adapters in 2020: Compare Features, Reviews & Costs

Stable internet connection is required

All of the benefits of moving your phone system to the cloud will be for nothing if your internet connection fails.
The good news is that a reliable internet connection is the only system requirement that applies. Over the past decade, internet speeds have increased and so has its reliability. It’s not uncommon to have well over a 100 Mbps available to most businesses and home users. This could support more than 1,000 VoIP calls at once!
Thankfully, your cloud phone service doesn’t use massive amounts of bandwidth. Each one of your phone lines should have at least 100 kbps of upload speed available.
If you’re not sure how reliable your internet connection is, you can take our free VoIP speed test to see if your network is ready for VoIP.
And if your ISP goes down, you can instantly log into your dashboard and direct calls to cell phones with advanced call forwarding. If you don’t have another internet connection available, call our support team and we can take care of these urgent requests.
Be sure to monitor your network use. If your team watches Netflix while working, it will consume valuable data from your internet connection. Consider implementing Quality of Service (QoS) rules to prioritize VoIP traffic over video streaming. Doing so improves your caller’s experience, especially if you have a call center or other large-scale SIP applications.
Related: How Much Data Does VoIP Use? Tips to Forecast Your VoIP Bandwidth

Latency and jitter may occur

Jitter and latency are other call quality issues you may experience with your cloud-based phone calls. It’s just a natural function of wireless networks.
Here’s how a phone call works with VoIP. Phone calls are converted to data packets and transmitted over the internet to the network of the other party. At that point, it’s converted back into audio that the person on the other end hears.
Between your internal network, ISP, and VoIP service provider, there are many servers in between. Network jitter and packet latency are two common VoIP issues.

  • Jitter can result in choppy audio or calls that are delayed or dropped. The variance in ping responses that measures jitter.
  • Latency can result in callers experiencing a brief delay or echo in a conversation. In most cases, it’s not noticeable, but in severe circumstances, it can be problematic.

Here are a few solutions that you can try to troubleshoot these issues.

  • Check your internet connection and test your bandwidth.
  • Use an Ethernet connection for your phones and computers whenever possible.
  • Consider enabling jitter buffering, which many Nextiva devices have pre-enabled.

Related: 10 Top VoIP Issues: How to Fix Them Forever

Location info is limited for emergency calls

For most people, this won’t be an issue. Phone calls made over the internet don’t necessarily have accurate location data attached when calling 911.
When calls are directed to an emergency call center (known as a PSAP), operators may not know of your location or even your phone number. By default, calls arrive at the nearest PSAP based on the account holder’s address.
To overcome this, update the fixed address assigned to each business phone line in your cloud phone system. This setting is known as E911 and is something you should become familiar with. When employees work from home or away from the office, you should update it promptly.
We recommend you suggest to your team that people should use their smartphones since GPS data and cellular triangulation passes this data instantly to nearby PSAPs.
Related: What is a Virtual Phone System? (And How Does it Work?)

Tips for Moving Your Phone Service to the Cloud

Cloud Phone System Advantages

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 you benefits that a traditional landline can never match. The pros simply 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, team workflow. You’ll find that the obstacles have less to do with VoIP and more to do with internet service providers and their connected networks.
  • Leverage powerful VoIP features – Take advantage of the dozens of built-in VoIP features to solve business problems. For example, auto attendants, call routing, and cloud-based call recording. Get your team’s wishlist together for what they want, and you can probably grant their wishes with a cloud phone system.
  • Follow recommendations from your VoIP provider – Not all cloud phone systems are alike, so you’ll want to ask plenty of questions. Embrace their suggestions to achieve optimal call quality. They know their infrastructure and what works best for customers like you. A reputable service provider will take the time to answer your questions so you can make the migration smooth for everyone.

The flexibility of a cloud-based phone system means that it can adapt to the growth of your business. All you need is the right partner to support you on that journey.

Julie Bai


Julie Bai

Julie Bai was a product manager at Nextiva, UCaaS evangelist, no-bull communicator, and translator for people, dog lover, and mother to an adorably active boy.

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