The Pros and Cons of Cloud Telephony for Enterprise Businesses

A business requires consistent and reliable communication to connect with its clients at all times to satisfy their needs and deliver top-notch services. 

With everything being rapidly digitized it is no wonder that even telecommunication systems have started to rely on the internet and rightly so, because cloud-based phone systems are far more advantageous in terms of flexibility, scalability, and operability.

In this article, we shall look at what cloud telephony is, and pros and cons of cloud telephony, and how can one use it to their advantage.

Now, let’s begin.

What is Cloud Telephony?

Cloud Telephony, also known as Hosted Telephony,  is a cloud-based phone system that requires an internet connection to run. Cloud telephony uses VoIP (Voice over Internet Protocol) technology to make calls.

Traditional PBX (Private Branch Exchange) phone systems require extensive hardware and complex infrastructures. They are difficult to maintain, and the phone costs are excessively high for international calls.

However, when it comes to cloud telephony, all one requires is a reliable high-speed internet connection. Cloud telephony is more scalable, integrable, and flexible in terms of its infrastructure, cost, and functionalities.

Since more businesses rely on the Internet to reach their clients, cloud-based telecommunication systems are expected to thrive even more in the upcoming days.

How Does Cloud Telephony Work?

Initially, a company selects a service provider and a suitable subscription model for cloud calling.

A cloud telephony VoIP system mainly requires the following components:

• A high-speed internet connection and high bandwidth
• Advanced equipment: Dedicated Routers, VoIP phones (also known as IP phones or softphones), and Analog Telephone Adapter (ADA).
• Provisioning VoIP software and applications

Step 1:

VoIP mainly uses 2 protocols, H.323 and SIP (Session Initiation Protocol) in order to establish connections between the VoIP server and VoIP phones. The server records IP addresses and other required information of the user.

Step 2:

When a call is made over the network, the server locates the recipient’s IP phone and secures a stable connection. The call is then routed to its destination.

Step 3:

The analog voice signal is then converted into digital data signals with the help of Analog to Digital Converter(ADC).

Step 4:

The digital data is then converted into data packets.

Step 5:

Codecs (encoders and decoders) are used to compress the audio data to enable efficient transmission.

Step 6:

The data packets are transmitted over the packet-switched networks using the Real-Time Transport Protocol (RTP) and User Datagram Protocol (UDP).

Step 7:

The recipient end collects the packets and rearranges them in order. The Digital to Analog Converter (DAC) then converts the digital signals back into the voice signals.

What are the Benefits of Cloud Telephony?

Cloud telephony services are mainly used by businesses like call centers, remote and off-site companies, e-commerce businesses, payment processing companies, and so on. The advantages of cloud telephony for businesses are as follows:

1. Comparatively More Cost-Friendly

Cloud telephony is far more cost-saving than traditional telecommunication. Since cloud telephony requires less hardware infrastructure and less on-premise maintenance, the costs are greatly reduced in the setup.

Further, making domestic and international calls requires no separate business call plans but only a working laptop with a headset and a strong internet connection.

2. Highly Scalable

Cloud telephony doesn’t require an on-site infrastructure since all of its services are hosted through the cloud or a third-party service provider. Thus, all a business requires is any software that supports VoIP service.

A company can freely choose a low-cost subscription model based on its operational capacity and users. Cloud telephony allows businesses to easily add or remove phone lines and users across multiple locations without having to install additional infrastructure.

Further, the system updates are done automatically by the service providers. So, there are no delays or interruptions during expansions. Thus, dynamic adjustments across the world can be made effortlessly with minimal limitations.

3. Highly Secure

What would happen to your business if all your telecommunication hardwares got damaged due to overheating or say, natural disasters? How would you maintain your communications then?

With cloud telephony, you do not have to worry about such things. Cloud telephony is more dependable and less prone to unexpected disruptions that would impact day-to-day operations.

Cloud telephony allows you to always stay online and have a trustworthy backup in case of disasters. If one data center fails, then another takes over instantly.

Cloud telephony also uses encryption protocols such as TLS (Transport Layer Security) and SSL (Secure Sockets Layer) to encrypt data between a client and a server.

Multi-factor authentication (MFA) and Role-based access control (RBAC) ensure that only authorized personnel can access the cloud accounts and systems.

Since cloud telephony providers conduct regular security audits and testing, the vulnerabilities and oncoming attacks like Denial-of-service (DOS) attacks are detected early and dealt with effectively to provide smooth ongoing operations.

4. Multiple Flexible Features

While traditional phone services provide basic services such as voicemail, call forwarding, etc., cloud telephony provides additional features such as call recording, video-conferencing, Interactive voice response (IVR), virtual phone numbers, voicemail-to-email, real-time analytics, auto-attendant, and seamless CRM integration.

In addition to being scalable, cloud telephony can easily configure advanced call routing, call queues, and IVR menus and optimize call flows based on business location, hours, and customer needs.

Thus, its features like mobile accessibility, adaptability, quick deployment, and customizability make it a more flexible and attractive choice for businesses of all sizes.

5. Effective implementation

Cloud telephony enables integration and centralization of all business communications on a single platform. It can be easily integrated with various software and business tools, such as CRM systems, helpdesk software, etc., and middleware platforms like Integromat.

This efficient integration with systems and applications allows for seamless communication, call logging, and customer data management without any extra custom coding. 

Disadvantages of Cloud Telephony 

Now, let’s look at some of the disadvantages of cloud telephony.

1. Internet Dependency

Cloud telephony requires a high-speed and high-bandwidth internet connection. Inconsistent connectivity leads to poor call quality, call delays, and dropped calls.

2. Costly Infrastructure

While the initial set-up and maintenance costs are far lower compared to traditional phone systems, the subscription fees can increase over time, and more money must be spent to acquire new features and pieces of equipment.

Also, money must be spent to buy virtual phone numbers, repair systems, provide support, tackle security issues, etc.

3. Security Issues

Since cloud telephony is dependent on the internet, it is prone to hacking, security breaches, malware attacks, and unauthorized access. This can cause loss of vital data and tremendous financial loss.

4. Others

• It is difficult to integrate Cloud telephony services into analog devices such as fax machines. Thus, money must be spent on additional resources.
• While making emergency calls with a cloud-hosted phone service, emergency responders won’t be able to track your location and phone number.
• The customization and configuration features offered by the service providers might be limited, and switching from one provider to another may cost more money, loss of loyal clients, and loss of reliable old features.

Tips For Moving Your Phone Service To The Cloud

Since cloud-based phone systems effectively lower communication costs, enhance productivity and flexibility, and increase business profits, one might consider adding cloud telephony to their business.

Here are a few things to do to smooth out the transition.

1. Research and Planning

A thorough research must be carried out to determine business needs, network requirements, ISP bandwidth, number of users, call features, call volume, and necessary integration tools that a system might require. Further steps must be planned according to the needs and goals established.

2. Choose the Right Service Provider

When moving to a cloud-based phone system, one must choose a reputable and reliable service provider. The chosen party must be able to provide all the desired services and customize them in the future if required.

One can directly employ the service provider or take some free trials or demo products to use before fully committing.

3. Backup Data

Once a service provider has been selected, ensure that all the vital data such as contacts, call logs, voicemails, etc., have been backed up to prevent any loss of data during transition. Backing up data also enables the smooth uploading of data onto the cloud after the transition.

4. Train Users

Existing staff, new users, and higher executives must be trained to handle and effectively operate the new system. This ensures all the new features are being implemented efficiently for business growth.

5. Maintenance and Support

Once the transition has been made, the maintenance team must constantly monitor the performance of the cloud service and cloud telephony system to make sure all the specifications are being met. Further, security systems, protocols, and regulations must be set up as security measures.

How to Choose a Cloud Telephony Provider

Some popular cloud telephony providers are:

1. Dialaxy
2. Nextiva
3. RingCentral
4. 8×8
5. Vonage

Cloud Telephony Providers can be of different types based on their features, target customers, and specific functionality.

•  Unified Communications as a Service (UCaaS) providers

Eg: RingCentral, 8×8

• Contact Center as a Service (CCaaS) providers

Eg: Genesys, Five9

• Virtual PBX providers

Eg: Vonage, Ooma Office

•  VoIP Providers

Eg: Zoom Phone, VoIPLy

• SMB-Focused providers

Eg: Grasshopper, CloudTalk

While choosing a cloud telephony provider, one must focus on the following things:

1. Suitable Features

Businesses must choose a provider that offers specific features tailored to their needs and goals. These features may include basics such as call forwarding, voicemail, and call routing or advanced features like Interactive Video Response (IVR), AI tools, video conferencing, and so on.

The services must be easily integrable with the existing hardware and software infrastructures to streamline workflow and increase productivity.

Further, the company must be able to customize additional features and functionalities if needed in the future.

2. Trustworthiness and Reliability

Service providers with high uptime and reputation must be chosen. This ensures that the clients have constant, uninterrupted connections to carry our business. The providers must have multiple backup data centers to prevent any loss of data or delay in transmission. 

3. Cost and Pricing

The costs for the service must be within our budget, and the rates must all be agreed upon by both parties. Transparency of pricing is important so that the client doesn’t receive an unexpected bill in the future.

4. Dependable Security

The service provider must adhere to the industry guidelines and protocols. Some important regulations are HIPAA compliance, ISO/ IEC 20071, PCI compliance, and SOC2 compliance.

The service provider must also be able to provide solid security measures like encryption, firewalls, and secure data centers to protect business privacy.

5. Dedicated Customer Support

At last, a reputed service provider must be able to provide reliable and prompt customer support when needed. This may include fixing errors and malfunctions and providing technical expertise. 

Cloud Telephony Vs. Traditional Phone Systems

Conclusion

While both cloud telephony systems and traditional phone systems are equally used in an on-premise workspace, cloud telephony still has more advantages than traditional phone systems for a growing business.

It is a solution to modern telecommunication problems, and every IT professional, business owner, decision maker, communication director, and operation executive must make use of cloud telephony to connect with their clients worldwide.

FAQs

1. How does cloud networking work?

Cloud networking is a cloud-based networking infrastructure that consists of multiple virtual network components and configurations that run on the cloud. It can be of 4 types:

• Private cloud computing
• Public cloud computing
• Hybrid computing
• Multicloud computing

Cloud networking uses its virtualized infrastructure to manage and control network resources through cloud services.

3. How does the cloud connect to the internet?

Cloud connects to the internet through the data centers operated by Cloud Service Providers (CPS). The data centers use routers and gateways to route traffic between the cloud infrastructure and the public internet to allow users to access the cloud services.

4. How is data transmitted to the cloud?

Data is transmitted to the cloud through the internet connection and private networks using secure protocols like HTTPS, SSL/ TLS, and VPNs. The devices encrypt and decrypt data and the servers store and process data.

6. Where is cloud data stored?

Cloud data is stored on servers in remote locations. These places can be data centers as well as server farms. Cloud data is mainly stored in data centers operated by cloud service providers like AWS, Google Cloud, and Microsoft Azure.

7. Who owns the cloud?

The cloud is owned and operated by the cloud service providers. However, the data on these servers belong to the organizations and individuals that have purchased the services.

8. Can you access the cloud without the Internet?

No, you cannot access the cloud without the internet. Without a stable internet connection, all cloud resources and functionalities remain inaccessible to the user. 

9. Who invented cloud technology?

Cloud Technology was invented by J.C.R. Licklider. This technology was further developed by John McCarthy, Salesforce, and Amazon Web Services (AWS).