Cloud Phone System: What It Is, How It Works, and Why to Choose It

Cloud technology is accelerating today’s businesses by offering more agile and affordable solutions. Business communications, as an essential cornerstone for any companies, is embracing this innovation too. More and more service providers have been offering cloud voice solutions for businesses of all sizes. This blog post will walk you through the cloud phone system from what it is and how it works to why and how to choose one.


What Is a Cloud Phone System and How Does It Work?

A cloud phone system (a.k.a. cloud PBX, hosted PBX, and hosted phone system) is a VoIP phone system that is accessible over a cloud-based IP network. It is delivered entirely over the Internet and managed completely off-site, cutting down upfront investments in telecommunications infrastructure. The deployment and set up is quick and easy, freeing companies from IT overheads. Normally, you can purchase the cloud phone service from a service provider and pay on a subscription basis.

The diagram below is a simplified flow of how a cloud phone system works:

Cloud Phone System Diagram

Simply put, with the business phone system hosted in the cloud, you make and receive calls using IP phones, mobile phones or other devices, and the voice traffic is carried over an Internet connection which in turn is connected to data centers sitting within the cloud.


What Are the Benefits of a Cloud Phone System?

Savvy businesses are joining the shift to cloud phone systems for lots of reasons.

Cloud Phone System Benefits

Cost Savings & Future Proof

Every business, especially smaller companies, want to cut operational costs as much as it can. Cloud phone system is a budget-friendly option as it greatly reduces the upfront investments on equipment and regular occurring maintenance costs. In most cloud phone system installation, the only capital expense is purchasing the IP phones. The cloud phone system usually works on a simple per-user basis so that businesses can scale up the capacity by simply purchasing new licenses. The system is always ready to grow with your business. On the other hand, under such a pricing model, the company have greater predictability of their phone system and better control of their budget.

Limited Maintenance & Administrative Requirements

Hosted off-site, a cloud phone system is centrally managed by phone service providers, requiring little technical expertise and IT personnel from customers to set up and configure the system. The responsibility of keeping the system updated also shifts from the customer to the service provider, and businesses have an always current phone system without dedicating budget and resources to maintain it. Administration of a cloud phone system is also simplified as long as you have an Internet connection, which is highly useful for companies with offices in different locations. IT admin can change the user settings through the web interface at any time, anywhere, with a few clicks.

Mobility & Geographical Flexibility

With a cloud phone system, headquarters, branch offices, and teleworkers can all be unified, enjoying the same features and business continuity. For remote workers, the office is wherever they make it as long as the Internet connection is available. Some cloud phone system service providers offer free softphone apps that allow employees to use not only IP phones, but also desktops and smartphones as office extensions to make and receive calls, enabling employees to work from home, on the go, or as a full-time remote worker. Besides, cloud phone systems make it easy to connect geographically dispersed offices under one phone system and the administrator can manage it from any location.

Bonus: Unified Communications

The cloud phone system is a perfect enabler of unified communications. Unified communications is all about making a wealth of communications channels and options into a single point of access. Cloud unified communications leads to more consistent and convenient communication with colleges and customers by allowing them to use their preferred channels. For example, when you are on a phone call through the desktop softphone and have to leave for a while, instead of having to hang up the phone, you can forward the call to your mobile phone and keep on the conversation. Some providers also offer values in enhanced collaboration, such as instant messaging, presence, CRM integration, and more.


Handy Features of Cloud Phone Systems

Leading cloud phone service providers offer unlimited features, such as auto attendants, conference, voicemail, call queue, without additional charges to your basic monthly fee. For your reference, below are some features of Yeastar Cloud Phone System that hits the most popular list and you can watch the videos to learn more:

Call ForwardingCall Forwarding: As a basic feature of a phone system, call forwarding allows an incoming call to a designated destination under different conditions such as “When Busy”, “No Answer”, and “Always”. For instance, you can choose not to answer a call and forward it to a colleague or to voicemail.

AutoCLIPAutoCLIP: AutoCLIP is a great help for handling returning calls. Here is the case. A salesman called his client but the call didn’t get picked up. Minutes Later, his client called back. Since his information has been stored, his call would be routed to the salesman directly.

SIP ForkingSIP Forking: SIP forking refers to the process of “forking” a single call to multiple SIP endpoints. With SIP Forking, multiple SIP endpoints can be registered to one extension number, so the incoming call can ring many terminals at the same time and you can take the call from any of the devices.

Ring GroupRing Group: Ring Group is used to distribute calls effectively among employees in particular departments. When there is an incoming call, all phones within the group ring sequentially or concurrently, depending on the ringing strategy you specify.

Distinctive RingtoneDistinctive Ringtone: Distinctive Ringtone distinguishes calls from different inbound routes. Calls coming from different inbound routes will play its own pre-configured ringtone. When a user hears the ringtone, he/she may notice the intention of the incoming call.

Blacklist & WhitelistBlacklist & Whitelist: Blacklist is used to block incoming and/or outgoing calls, while those in the Whitelist are allowed to call in/called or both regardless of the blacklist settings. Blacklist & Whitelist frees businesses from nuisance calls and builds a more secure phone system.

Related: 10 Must-Try Features of Yeastar Cloud PBX


Is a Cloud Phone System Right for you and When Is a Good Time to Switch?

Today, some businesses have embraced cloud phone systems. Some are working on the migration. And others choose to stick with an on-premises PBX approach. The thing is, there is no ultimately better option. Considering the business size, needs, and budget, every business has its own set of requirements, so pick one that suits your business best.

Here is a list of businesses that might find a cloud phone system a perfect fit:

  • Businesses short of IT staff and avoiding maintaining PBX equipment
  • Seasonal businesses with fluctuating communications needs
  • Companies operating at multiple sites
  • Rapidly growing start-ups with unpredictable future capacity needs
  • Businesses having a number of teleworkers and remote employees
  • Companies lacking traditional office space

Switching to a cloud-based phone system is not a difficult proposition. Before making the migration, it’s crucial to evaluate your needs and key merits of your options:

  • How many employees do you expect to have on your system?
  • Do you anticipate user growth in the short term?
  • How sophisticated are call management needs?
  • What is the startup procedure and cost?
  • How can you use your existing devices with the new cloud phone system?
  • Are there usage-based fees charged in addition to the monthly rate?
  • Do you rely on other cloud-based services and can they integrate with the cloud phone system?

The list goes on. It is not an easy task to compare different offerings and decide on a VoIP provider. For your reference, we have worked out An Ultimate Buyer’s Guide on Small Business Phone System to help you make an informed decision.


Introducing Yeastar Cloud Phone System

Yeastar Cloud Phone System delivers enterprise-grade features along with advanced UC capabilities, bringing a solid, reliable and affordable business communications solution. Watch the video below to have a closer look.

Related: Why to Choose Yeastar Over Other Cloud Phone Systems

We offer a free trial for you to experience the cloud phone system. All features are included and you can download the free Linkus UC softphone on your mobile phone and desktop. No credit card is required. Once signing up, you can start to use it right away.Yeastar Cloud PBX Free Trial