Ultimate Guide to Cloud Phone Systems

In an age where remote and hybrid working situations are king, cloud phone systems provide businesses with a streamlined way to connect with clients and customers. By relying on Voice over Internet Protocol (VoIP) technology — instead of traditional routers — to connect calls, the systems can run on any type of device, making them more versatile, and often affordable, than legacy phone systems.

Our independent research and testing concluded that the RingCentral is the best cloud based phone system. Not only does it offer a number of advanced features and useful third-party integrations, but its help and support options are perfectly equipped for growing businesses. 

However, even stripped-back VoIP systems offer a heap more features than traditional phone lines. From advanced call management and handling to virtual receptionists, the one-size-fits-all solution does far more than make and receive calls. In this guide we talk about cloud phones, their advantages, and the best cloud phone options on the market -but, if you want to whittle down systems a little quicker, use our free comparison tool to receive a quick personalized quote.

Best Cloud Based Phone System Comparison

We've given you the full lowdown on the most popular cloud based phone systems below, but this table provides a quick comparison of them:

In this guide:

• Cloud Based Phone System Comparison
• What is a Cloud Phone System?
• How do Cloud Based Phone Systems Work?
• Benefits of Cloud Hosted Phone Systems
• Premise Based VoIP vs. Cloud Phone System
• Cloud Based Phone System – Case Studies
• Next Steps to Getting a Cloud Phone System

After comparing the top VoIP providers side-by-side, our researchers concluded that RingCentral is the best cloud based cloud system on the market, for a number of reasons. In comparison to other VoIP providers it performed the best across all our testing categories, including a top score of 5/5 score for help and support. Its VoIP features were well-equipped for a variety of industries, and with up to 10GB of cloud storage, its system is stronger overall when compared to rivals like 8×8 and Vonage.

For smaller businesses that require even more advanced VoIP features, however, 8×8 is still a solid option. With monthly prices starting at $15 per user, its entry point is lower than RingCentral’s, Vonage’s, and GoTo Connect’s — and even its basic tier includes instant message and web conferencing tools.

If you operate in retail or are planning to expand your team, Vonage is another great cloud phone with competitive sales and onboarding features. Alternatively, if receiving a consistently great customer experience is your top priority, our research team awarded both GoTo Connect and Ooma with impressive satisfaction scores of 4.4/5, suggesting they'll also be safe bets.

How we chose the best cloud phone systems

We don't pick providers out of a hat at Tech.co. All of our verdicts are informed by extensive research conducted by our in-house team of experts.

First, we collect extensive information about each cloud phone through the vendor’s website and product manuals. Then, after we’ve compiled and logged the research, we review each provider against the following key metrics:

• Price – How much is a product's starting, and average monthly price?
• Features – How many features do a cloud phone have and are they good quality?
• External connections – Is the system compatible with different types of software? How useful are these integrations?
• Customer support- How robust are the provider's support options? Is help on hand 24/7?
• Security – Does the platform offer robust security options? Do the providers guarantee VoIP security?
• Scalability – How capable is the cloud phone of scaling with the needs of your business?
• Customer satisfaction – Do customers have a positive overall experience with the software?

Once we’ve answered these questions, we give each of them a category-based, and overall star rating out of 5. This helps us to rank providers in order of their overall value and determine which may be best for specific types of businesses.

In this guide we focus on the top VoIP cloud solutions, but if you’re after a more detailed breakdown of VoIP software you can check out our guide to the best VoIP providers.

What is a Cloud Phone System?

Cloud phone systems refer to the off-site hosting of a company’s telephone service.

Rather than housing your business’s phone system infrastructure in your office, your provider keeps the equipment at a remote cloud data center. This means your data is securely stored in a server that can be reached over the internet, which for most modern businesses can be additional extensions to their existing data storage.

Also known as virtual or hosted PBX, cloud based phone systems take advantage of secure data technology to offer businesses the opportunity to completely remove the need for expensive office-based hardware and unnecessary wiring.

Day-to-day phone use is no different than an on-premise service. However, the provider oversees all maintenance and upgrades at the off-site location. This means hosted PBX VoIP providers take care of any technical issues that may arise and deal with any maintenance or upgrades that need to take place. This leaves you with a modern phone system without the inconvenience of the management and tech support that goes with it.

How Do Cloud Based Systems Work?

When it comes to a cloud phone system, all of the software required by a business to deliver their customer service function is located on a secure server and accessed through a web browser. Without the need to locate hardware on your premise as well as maintain it your business can concentrate on what it is good at.

Cloud phone systems are handed completely by the Hosted PBX provider, all you need is a reliable internet connection that can keep your workforce connected whether at their desks or remotely.

Cloud based solutions provide businesses with a range of features that allow them to offer a number of customer service-based functions. We break down these features below:

Virtual PBX features

Upgrading to a cloud-based phone provider means you'll gain additional benefits that a physical PBX just won't be able to offer. And yes, it goes beyond just getting rid of those tangled phone wires. Here are the biggest benefits of a virtual PBX.

• Messaging – Cloud systems enable businesses to easily manage messages and record voicemail which can improve customer service standards
• Call Forwarding – Calls can be easily diverted to any phone in the network, making it ideal for use where businesses have different departments or teams
• Voicemail – Easily record company voicemail messages and offer the ability for your customers to also leave messages when you are unavailable. Multiple voicemail messages can be created and voicemails can be delivered as text to mobiles or laptops
• Business Text Messages – Marketing or customer messages can be distributed to your customers through a text message using a local telephone number
• Versatility – The systems are extremely versatile, either using traditional office phones or using a mobile device

How Much Do Cloud Phones Typically Cost?

The price of a cloud phone will essentially depend on the size of your business and the quantity and quality of the VoIP features you require. However, the typical price for a cloud phone system tends to be anywhere from $15 to $50 per user, per month.

For example, RingCentral, which is one of the leading voice providers, offers plans that range from $19.99 to $49.99 per user per month. These prices are fairly standard within the VoIP industry, and they reflect the cost of many similar cloud phone packages.

Some VoIP providers do sell packages that are priced slightly outside of this ballpark though. For example, 8×8 provides six different business plans that range from $15 to a pricey $185 per user, per month. These higher prices are somewhat of an anomaly in the cloud phone market though and plans of these kinds will be reserved for larger, enterprise-level businesses.

What affects the price of cloud phone packages?

Aside from what's included in the package, the price of each plan could also depend on how many users you need it for. For instance, if you include a large number of users in the plan, the cloud phone system will work out cheaper per employee. This means that while larger enterprises will have to invest more into VoIP systems than smaller firms overall, they'll often end up paying slightly less per user.

Your chosen billing method is likely to impact the price of your phone package too. VoIP providers often try to incentivize longer-term contracts, so if you're able to pay for your telephony service annually instead of monthly, this could bring down the cost of your cloud phone.

Benefits of Cloud Hosted Phone Systems

Many businesses prefer cloud-based systems over the traditional phone network because it brings a number of benefits including;

• Resource Savings – Cloud phone systems are much more affordable than a traditional landline network, not only in terms of initial installation and ongoing costs
• Setup – As there are no telephone lines to install, a cloud-based system can be installed and set up quickly and easily
• Remote connectivity – Cloud systems can facilitate operations when teams are geographically dispersed with remote staff being able to connect and take calls regardless of their location
• Advanced Functionality – Cloud systems have a range of advanced features that can be added such as extensions, management of messages, call forwarding and business messaging.
• Flexibility – Cloud VoIP systems allow companies to add an unlimited number of new users, no matter where they’re located.
• This way, you never have to stress about exceeding your phone system’s capacity, and with many providers, you only pay for what you need. By contrast, expanding legacy and other on-site systems is complicated and costly.
• Frees up resources – By hosting your phone system in the cloud, you can eliminate common IT headaches that arise from on-premises system glitches.
• Instead of spending time and money fixing phone problems, your team is free to focus on more important tasks.
• New features are easily added – If you host your phone system on-site, you’re limited to the features that the system comes with out of the box. Upgrading is a painful and expensive experience.
• Cloud systems use a single, centralized software platform. New features can be seamlessly added to all users at the same time without disrupting service or requiring the use of additional hardware.
• Disaster recovery – Some on-premises phone systems do offer redundancy and back-up features, but they require additional installation.
• Many cloud system providers, however, offer disaster recovery services as part of their initial implementation.
• In the event of a power outage, natural disaster, or in the unlikely event that the cloud center’s wires are cut, calls are saved and re-routed to alternate lines.

Premise-Based VoIP vs. Cloud Phone System

It’s important to understand the differences between a cloud phone system and VoIP.

The two terms are often used interchangeably, and while using the internet to make calls is the foundation for both systems, they don’t necessarily mean the same thing.

A VoIP (Voice over Internet Protocol) phone system is any which uses the internet to connect calls. It might be cloud-based and hosted, and frequently is, but could also be run on-premise.

When comparing on-premise VoIP services with cloud-based VoIP systems the easiest way to find the right fit for your businesses is to highlight the differences. This should allow you to identify which system is the most ideal solution for your needs.

Cost

Cloud-based phone systems are typically cheaper upfront, but businesses pay providers a monthly fee per user, which can anywhere from $15 to $50 per user, per month.

On the other hand, premise-based VoIP systems are more expensive to set up but don’t include a monthly fee. For example, Nextiva will set businesses back $18.95 per user, per month, where Net2Phone shoots up to $24.95 per user, per month — it just depends on your businesses needs.

After a certain point, it becomes more affordable for a company to own its equipment rather than pay ongoing fees. However, cloud systems have advantages for small and large businesses alike.

Infrastructure

A major distinction between premises-based and cloud systems is infrastructure.

With on-site VoIP, a company’s hardware and equipment is kept in a dedicated IT space, much like traditional phone systems. With the cloud, the gear is stored at a separate location.

If you prefer to keep your legacy phone system and its existing equipment, some providers can connect your analog phone lines with digital voice services through additional hardware.

Scalability

If you want an on-premises solution and anticipate growth in your business in the near future, you’ll need to buy a larger appliance.

But with cloud services, you can easily add or subtract extra lines and features, often at no additional cost.

For more information on the choices available to your business visit our review of the best VoIP business phone providers, who offer cloud and on-premise options.

Cloud-Based Phone System: Case Studies

To help you decide whether cloud-based phone systems are the right choice for your organization we have put together two case studies below of businesses that have made the switched the cloud and thrived. As already outlined in this guide there are a number of benefits associated with hosted phone system solutions and why they’re the right choice for any modern business.

Pacific BMW

As one of the largest BMW dealerships on the west coast, Pacific BMW needed an advanced phone system to support its team of 150 employees. Previously, the Glendale, CA-based dealership had used an expensive, on-premises PBX system to handle its calls.

It answered basic communications needs but failed to deliver the kind of efficient performance required by its diverse staff of sales associates and technicians. Given BMW’s reputation for technological sophistication, Pacific BMW switched over to RingCentral’s cloud-based phone service.

Previously, its system provider had to send out a technician to perform maintenance and upgrades, which was costly and cumbersome. However, since the switch, the company leaves oversight to RingCentral.

Plus, rather than giving out separate office and mobile numbers, the sales team now offers one phone number that rings on different devices.

Natural Running Store

Natural Running Store is an online outlet catering to runners who want shoes and products that support their body’s natural running technique. Patton Gleason, the store’s president, wanted to stand out from the competition, but was frequently on the go, attending meetings with vendors and customers, as well as giving presentations.

By implementing Grasshopper’s cloud-based phone system, Gleason established one central phone number. Customers and vendors can now reach him, regardless of location or time.

As a result, he’s improved existing business relationships and created new ones.