Cloud-Based Phone Systems: A Guide for Businesses in 2024

Daniel WeissLast updated on October 30, 2024
9 min

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Investing in customer relationships can reap big rewards for your business over time, like increased loyalty and revenue. But we know that keeping up with increasingly demanding consumer expectations can be a challenge—and we’re here to help. 

Customers and prospects expect their calls to be answered quickly, and they prefer to speak with a real person rather than a chatbot. Outdated communication tools present serious hurdles to meeting customer demands, as they lack many of the features that help you provide a personalized and streamlined customer experience. 

A cloud-based phone system offers the flexibility you need to stay connected with your customers without sacrificing the personal touch. It ensures you’re always reachable, helps you manage your time efficiently, and maintains the human connection that’s essential for strong client relationships.

What Is a Cloud-Based Phone System?

Before mobile phones, landlines were the standard for homes and offices. Phone systems are known by many names: public switched telephone network (PTSN), circuit-switched telephone network, plain old telephone service (POTS), or landline.

This type of system converts sound waves into electrical signals, which travel through cables to reach the caller on the other end. Although landlines have been around since the 1800s, their use has steadily declined.

In contrast, a cloud-based phone system, or Voice over Internet Protocol (VoIP), transmits voice and data over the internet. This data is hosted in the cloud, allowing users to access it from various devices, including smartphones, computers, tablets, and even traditional office landlines.

This flexibility means you can work from anywhere, at any time, without being tied to a desk or office.

How does a cloud-based phone system work?

Unlike traditional phone systems that send your voice across networks and cables, cloud-based systems break your voice down into tiny digital packets and send them to another person using internet protocol.

Then, by using a process known as SIP Trunking and working with external carriers such as Twilio, Voxbone, and Plivo to connect with the traditional telephone network, calls placed and received on cloud-based phone systems are accessible beyond strictly internet-connected devices.

Cloud-based phone systems work very much the same way as popular apps like Skype or FaceTime, but they’re accessible via “real” phone numbers and can connect to the traditional telephone grid as well as other cloud-based phone systems.

Why Use a Cloud Phone System?

A cloud-based phone system offers more advanced features and opportunities to increase productivity compared to traditional phone systems. 

As updates become available, there’s no need to buy new equipment or revamp your entire phone system. Software updates are as simple as a quick download and refresh.

Integrations that connect all your business tools

A cloud-based phone system streamlines your communications by integrating with:

  • Email 

  • Sales automation tools

  • Web apps

  • CRM systems

  • Helpdesk software

  • eCommerce platforms

  • Online surveys

  • Quality assurance tools

  • Chat tools

Most popular integrations are ready to use from day one, and with an open API, custom integrations are also possible.

Time-saving features that provide broad business benefits

One important reason businesses choose cloud phone systems over traditional solutions is feature availability

Unlike traditional landline or PBX systems, where features are often difficult to configure and come with additional costs, cloud-based systems are flexible and easy to manage. Features can be applied, adjusted, and configured with just a few clicks—no IT expertise required.

Video conferencing

Video conferencing allows teams to collaborate more effectively, regardless of where they’re located. It enhances communication, both internally and with customers and prospects, by providing face-to-face interactions to help facilitate better understanding and stronger relationships.

This feature is especially valuable for remote teams, as it bridges the gap created by physical distance and ensures that everyone stays connected and aligned.

Call forwarding

Call forwarding ensures important calls are never missed. This feature allows calls to be directed to multiple devices or team members so your business remains accessible at all times. 

It’s especially useful for teams that are often on the go, as it allows seamless communication without requiring you to be tied to a single location.

Auto attendant

An auto attendant enhances the customer experience by efficiently routing calls to the right department or individual without the need for a live receptionist. It reduces wait times and ensures customers are connected to the right person quickly.

This automation saves time and projects a professional image, giving your business a polished, customer-centric feel.

Call recording

Call recording is a crucial feature for maintaining high standards in customer service and training. It allows you to review conversations to ensure quality, resolve disputes, and provide staff with valuable feedback.

Having access to recorded calls is especially valuable for training purposes so you can improve your team’s overall communication strategies.

Local area code number

Having a local area code number helps businesses build trust and credibility with local customers. It makes your business appear more accessible and relevant to the community, which can lead to stronger customer relationships.

Additionally, it reduces the likelihood of your calls being ignored, as customers are more likely to answer calls from a familiar area code.

The Pros & Cons of a Cloud-Based Phone System

Before you switch to another phone system, you’ll want to consider the pros and cons of investing in cloud-based technology for your communication needs. 

ProsCons
Easy to set up and scale Intuitive dashboards Keeps you connected to all your tools Keeps employees connected wherever they are (not tethered to a desk) Proven call quality Teams can instantly collaborate on accounts Mobile-friendly Updates easily in the cloud Saves you money on maintenance and replacing equipment Savings on international calling
Requires a reliable internet connection, which depends on your internet provider If your business already owns traditional phones, you may incur extra expenses for VoIP adapters or replacing them with VoIP-compatible phones Can be susceptible to security issues like hacking and malware (can be reduced with extra security measures)

5 Top Cloud-Based Phone Systems 

To help you make an informed decision, we've highlighted five of the best cloud-based phone systems available. 

Aircall: Best for businesses of all sizes that want a reliable phone system that integrates with their existing tech stack

Aircall is a versatile cloud-based phone system designed for modern teams. It integrates seamlessly with popular CRMs (like HubSpot and Salesforce) and helpdesk tools (like Intercom and Zendesk), making it ideal for customer support and sales teams. 

With features like call routing, click to dial, and voice analytics, Aircall helps businesses streamline communication and improve customer interactions. Its user-friendly interface and reliable performance make it a top choice for businesses looking to enhance productivity, maintain flexibility, and ensure a smooth, professional communication experience from anywhere.

Plus, the platform is scalable, meaning it can evolve with your business needs as your organization grows. And it connects with over 100 business tools, meaning you can easily connect it with your existing tech stack. Trusted by over 19,000 companies of all sizes, Aircall is a reliable customer communications platform that can improve your sales and customer support processes. 

Key features

  • Call conference

  • Toll-free numbers

  • International numbers

  • Call routing

  • Voicemail

  • Business hours

  • Smart Interactive Voice Response (IVR)

See for yourself why Aircall is the leading cloud-based phone system on the market. Sign up for a free 7-day trial

RingCentral: Best for entirely remote businesses

RingCentral gives you a clear overview of the status of all your rooms and devices.

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RingCentral’s cloud-based phone system supports voice, video, messaging, and collaboration tools, making it ideal for businesses looking for a unified communication solution. 

It offers features like distributed call recording, agent performance tracking, and customizable dashboards, providing valuable insights and improving team efficiency. With the ability to set up virtual meetings, send messages, and share files, RingCentral is a good fit for teams that need versatile communication options. 

Key features

  • Toll-free and vanity numbers

  • Local numbers

  • Workflows

  • IVR

  • Call recording

  • Call routing and queue management

  • Whisper, monitor, and barge-in

See our RingCentral alternatives comparison for more information, or check out an in-depth review of RingCentral vs. Aircall.  

Grasshopper: Best for small businesses and entrepreneurs that need to communicate on the go

Grasshopper is available on both desktop and mobile devices.

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Grasshopper’s straightforward virtual phone system allows you to manage business calls and texts from both desktop and mobile devices. Ideal for small businesses and entrepreneurs, the platform provides features like auto-attendant, call forwarding, voicemail transcription, and business texting. 

It also offers custom greetings and a second phone number to keep business and personal calls separate. With its app available on iOS, Android, and Desktop, you can access all its functionalities on the go. However, it's important to note that Grasshopper is only available in the US and Canada.

Key features

  • Toll-free, vanity and local numbers

  • Call forwarding

  • Voicemail and voicemail transcription

  • Simultaneous call handling

  • Extensions

  • Call transfers

  • Incoming call control

See our Grasshopper alternatives comparison for more information, or check out an in-depth review of Grasshopper vs. Aircall.  

Vonage: Best for small businesses looking to unify global business communications 

Vonage offers both a desktop and mobile app so your team can stay connected wherever they are.

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Vonage offers a unified communications as a service (UCaaS) solution that integrates chat, calling, and meetings within a single application. It's designed for businesses looking for customizable communication workflows, with developer-friendly products for programmable voice, messaging, and SMS automation. 

Vonage stands out by unifying global business communications and providing tools for contact centers and conversational commerce, making it a good choice for improving customer satisfaction and sales results. 

Key features

  • Automatic call distribution

  • Call flip

  • Virtual receptionist

  • Local and international business number

  • Voice and video conferencing

  • Call park

  • Queue and hold features

See our Vonage alternatives comparison for more information, or check out an in-depth review of Vonage vs. Aircall.  

Dialpad: Best for teams wanting to use AI technology to streamline communication

Dialpad’s AI features summarize your calls and automatically extract action items.

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Dialpad connects teams through voice, video, messaging, and online meetings. With features like auto-attendant, call recording, and call routing, it streamlines business communications. 

Dialpad's standout feature is its AI-powered Voice Intelligence (Vi) technology, which transcribes calls, takes notes, and provides real-time insights. It also integrates seamlessly with tools like G Suite, Salesforce, and Zendesk, ensuring all your apps stay connected. 

Key features

  • Visual voicemail

  • Caller ID

  • International calling

  • Three-way calling

  • Power dialer

  • Virtual receptionist

  • Artificial intelligence

See our Dialpad alternatives comparison for more information, or check out an in-depth review of Dialpad vs. Aircall.  

How to Evaluate a Cloud Phone System

A cloud-based phone system is the modern way for businesses to communicate collaboratively and inexpensively online. And the benefits of cloud-based phone systems quickly become apparent as you explore your options. 

Since making a change to a cloud phone system requires an investment of your time and money, you’ll want to ensure that you’re maximizing your investment. Here are some things to consider as you evaluate cloud-based phone systems:

  • Applications and features. Does the system include all the features and applications that your users need to increase their productivity? Is it flexible enough to cater to different roles, such as managers, service reps, and sales teams?

  • Integration and connectivity. Does the system connect with all the applications, platforms, and services that you need to create a holistic communication system?

  • Innovation for today and tomorrow. Can the system be easily adapted to add-ons as technology continues to advance?

  • Security. How secure is the system and does it meet or exceed the minimum security requirements? Does the provider have a documented business continuity plan for system outages?

  • System monitoring and performance. Are there tools for monitoring and troubleshooting to proactively address issues and maintain optimal performance?

Still need help making up your mind? Check out our cloud-based phone system buyers guide.

Aircall: An All-in-One Cloud-Based Phone Solution for Modern Business Communication

Aircall's 100% cloud-based phone system and contact center solution is designed for ease of use, quick setup, and seamless scalability. Your team can set up phone numbers in over 100 countries and fully onboard within a day, minimizing downtime and boosting productivity immediately.

Aircall integrates all your communication tools into one comprehensive system, streamlining workflows and enhancing efficiency. With features like call routing, analytics, and CRM integrations, Aircall ensures your team delivers exceptional and personalized customer experiences, leading to higher satisfaction and loyalty.

The platform's flexibility and scalability make it the ideal choice for businesses looking to adapt quickly to changing needs and stay competitive. By choosing Aircall, you gain a powerful communication software that increases productivity, helps you build rapport with customers and prospects, and drives better business performance.

See for yourself why Aircall is the leading cloud-based phone system on the market. Sign up for a free 7-day trial


Published on October 30, 2024.

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