How Does a Cloud-Based Phone System Work? An Extensive Review

What if I told you there is a communication technology that allows you to do more than make a high-quality call without spending an expensive amount? 

It is a more cost-effective solution than the traditional telephone network, saving you on communication expenses. It’s versatile, working seamlessly across multiple devices such as smartphones, laptops, tablets, and iPhones.

Yes, I am talking about a Cloud-based phone system that is versatile, cost-effective, and reliable, ensuring your business communication needs are always met.

In this blog, we will discuss in depth about a cloud-based phone system and how does a cloud based phone system work, its features, benefits, and drawbacks.

What is a cloud-based phone system?

Cloud-based phone Systems are also called cloud telephone systems, voip telephony, or cloud communication systems because communication occurs over the Internet rather than via traditional phone landline networks. 

It is also known as a hosted PBX (Private Branch Exchange), cloud PBX, or hosted PBX that connects to the Internet so users can make and receive calls over IP networks. This gives users the flexibility to communicate with any internet-connected devices.

Generally speaking, all communication operates over the Internet in a cloud-based phone system.

It is a cost-effective approach to the business phone system as they just need to rent the servers from a third-party service provider instead of buying the on-premise hardware and infrastructure for the communication.

How does a cloud-based phone system work?

A cloud phone system usually uses the Internet to transmit data packages of voice calls, a process also known as Voice over Internet Protocol (VoIP). 

Once you make a call from a VoIP-enabled device, the detailed signals are converted into digital data packets, and those packets contain voice data and signals that go through the Internet, including various routers and switches, until they reach the intended destination of the recipient’s end.

On the recipient’s end, the digital data packets are converted back into analog signals by an Analog Telephone Adapter (ATA) or telephone device, also known as a VoIP adapter. 

After this, signals are converted into audible waves on the recipient’s phone. As a result, they can hear the caller’s voice.

Overall, this smooth voice-data packet exchange makes two-way communication as real-time as possible, lasting until one of the parties ends the conversation.

Features of Cloud-based phone system?

Cloud phone systems can take your call experience to a whole new level if your service provider has the following features:

• • Call Recording: This recording feature allows users to record calls to check call history for quality or regulatory reasons.

• • Mobile and desktop apps: These softphone apps ensure that everyone in your company is reachable, regardless of where they are.

• • Unified communications: Unified Communications is the next step up from VoIP, offering services such as call recording, reporting, and voicemail on single platforms.

• • Call Transfer: Create a smooth customer-agent interaction.
  • Auto Attendant: This allows the agent to configure the options for callers to hear a specific message or call deflection option when customer support is unavailable.

• • Call analytics: acquire real-time customer information to better your business, analyze behavioral patterns, and measure customer support performance.

• • High call quality: All VoIP calls are made over a reliable internet connection, which improves call quality and allows you to communicate clearly with anybody.

Cloud-based phone system vs Traditional phone system

What are Benefits of cloud-based phone system

Many call centers and large or small businesses prefer cloud phone technology because it offers distinctive benefits compared to traditional telephone systems. The financial and operational benefits are undeniable, making it a clear winner in modern business.  

Remote, versatile communication and flexibility are some of VoIP’s key advantages for businesses, both internal and external.

Below are some of the benefits of cloud-based phone systems:

1. Cost savings and efficiency improvements

Cloud-based voip calling has a lower cost than traditional landline calls because of VoIP technology. Voice over Internet Protocol, a short form of VoIP, utilizes the Internet network connection for making outbound calls and receiving inbound calls instead of a traditional phone line network to conduct and receive calls. 

Cloud phone technology allows users to make long-distance and international calls at a significantly reduced cost compared to traditional phone services. By transmitting voice data over the internet, VoIP offers the most affordable and flexible communication solution for individuals and businesses alike.

Many VoIP providers allow you to make international calls at no extra cost, reducing your business communication or call center expenses. You can also make calls from any state in the U.S. for free. Additionally, you won’t need to spend money on hardware equipment.

2. Enhanced scalability and flexibility

Call center agents and business customer support representatives can handle both inbound and outbound calls using various devices such as mobile phones, laptops, desk phones, and desktop computers. In addition, these agents can place and receive calls from any geographical location with access to the Internet.

Also, virtual phone numbers enable you to keep the same number no matter where you are, providing increased flexibility with VoIP systems.

Similarly, as your business expands, you can easily adjust your current plan. You can customize, add, or remove voip phone extension lines as necessary and use them without installing any new hardware equipment.

As a result, you don’t need to spend money expanding your program; it helps control your financial expenses for communication.

3. Improved call quality and features

Cloud phone systems rely on an internet connection to communicate, so call quality can be positively affected by having a reliable and fast internet connection. This will make your VoIP call experience clearer and smoother, with no lags or dropouts.

In the past, we used cell phones that relied on nearby network towers for the signal. This sometimes caused garbled sounds, echoes, and interruptions during calls. VoIP phones solve this issue by providing a smooth, uninterrupted connection with the use of noise-canceling microphones and advanced audio compression.

4. Improved analytics and reporting capabilities

Next benefit of VoIP for any business are data insights, analytics, and reporting capabilities. Analyzing call data is important to maintaining and enhancing your call center’s performance. 

Knowing more than the call duration is essential for any call center to understand the customer’s experience. 

VoIP systems readily provide all this data, allowing you to pinpoint abnormalities and call quality problems that you must address, such as latency and packet loss. 

5. Improved customer experience and satisfaction

VoIP solutions provide a range of features, including Interactive Voice Response (IVR), Automatic Call Distribution (ACD), Call Recording, and Chat, as well as skills-based routing, sentiment analysis, voice authentication, and voice recognition. These features help call center agents communicate effectively with business customers. 

Call centers can also use this cloud-based technology to integrate unified communications, allowing agents to interact with customers via email, SMS, instant messaging, and other web-based communication methods.

Drawbacks of cloud-based phone system

I. Bandwidth dependency

Cloud-based communication systems primarily rely on an internet connection. When these connections are lost, phone lines will also be affected. Additionally, inadequate bandwidth can lead to poor call quality, with common issues such as noise, delays, and echoes in VoIP systems.

Cloud telephony is vulnerable to security risks that can impact service quality. Because VoIP relies on the internet, hackers can eavesdrop on conversations and intercept calls, potentially accessing sensitive data.

II. Limited to Emergency Services

When using a VoIP call center phone system, it’s important to note that 911 may not be accessible through the service in some cases due to limitations of the VoIP QoS, Internet network, service providers, and Internet service providers (IPS). As a result, customers must have an alternative way of contacting emergency services.

III. Security concerns

Security is a major concern when using a virtual call center with VoIP. Possible threats include identity and service theft, malware, spamming, phishing, viruses, and call tampering. VoIP relies heavily on software infrastructure and its security protocols. 

If your business communication has weak security and security compliance issues, it can be vulnerable to cyber-attacks, malware, and DoS (denial of service) attacks.

FAQs

Is there a free trial period available for cloud-based phone systems?

Yes, You can give a try to Dialaxy’s 7-day free trial and experience the cloud-based phone system for effective and convenient communication.

How much does a cloud-based phone system cost?

Pricing for cloud-based phone systems can vary depending on several factors, including:

• Features: The more features included in the plan, such as voicemail transcription, call analytics, or integrations with other business tools, the higher the cost per user will be.
• Number of users: Providers often charge per user, so the total cost increases as you add more phone lines to your system.
• Call volume: Some plans may have tiered pricing based on the monthly minutes used. High-volume callers may benefit from unlimited calling plans.
• Contract length: Signing a longer-term contract may qualify you for a discount compared to month-to-month billing.

How can I ensure a better cloud-calling experience with a cloud-based phone system?

Choose a reliable service provider and ensure a stable internet connection with sufficient bandwidth, low latency, and minimal jitter. 

A reliable cloud-based phone system can provide precise and reliable calls, allowing you to experience better cloud communication.