How Does Cloud Telephony Work? And Should I Use It?

You may have heard about cloud computing and other branches, like cloud telephony. It seems today that everything IT-related goes to the cloud, but is that always a good thing? If your business phone system can migrate to the cloud, should you do it and use a modern telephony system?

Cloud telephony, of course, exists in the cloud. It differs from traditional private branch exchange or PBX telephony in several ways:

  • It’s in the first tier of infrastructure as a service or IaaS providers, such as Google Cloud and Amazon Web Services
  • It doesn’t use one server or a single-server cluster, but rather several server clusters
  • It’s limitless, giving cloud telephony the freedom to extend anywhere in the world while providing the best latency
  • It provides the most redundancy to your business phone lines

In this article, we’ll expand on the points above on this cutting-edge telephony tech trend. We’ll also delve into how cloud telephony works in detail. By the time you’re done a reading, you can decide if this is the right solution for your business needs.

What Is Cloud Telephony?

With everything from our laptops and tablets hooked up to the cloud, it seemed like only a matter of time before telephony joined. With cloud telephony, a service provider will host all phone data to the cloud, including:

  • Session initiation protocol or SIP trunking
  • Primary rate interface or PRI lines
  • Routing systems
  • Switching systems
  • Servers

If you use a PBX system, you’d have to provide the above systems yourself. This can get quite costly, as you have to pay for the hardware, the deployment, and any future scalability. That’s not the case with a cloud telephony system. The service provider takes care of all the dirty work. You just pay them and enjoy a top-notch phone service.

Using a cloud telephony system also offers the following benefits.

  • No limit on accepting calls: With call-forwarding, you could take a call no matter where it comes from worldwide, and all through a cloud telephony service. If you’re a small business just getting off the ground or trying to grow, this ability can propel you to greater success.
  • Customizable options: Not all businesses have the same call needs. That’s why many cloud telephony service providers offer a degree of customization to their customers. Most of these work via drag and drop features, so it’s pretty easy to figure out (even for beginners). Whether you want to adjust workflows, call flows, or something else altogether, you have the freedom to.
  • Adjusted for scalability: Where will your business be in two years? Five years? A cloud telephony system can grow with you. Whether you need to make huge changes to the system or small ones, the scalability you get with one of these systems can handle it.
  • Easy integrations: If you already use customer relationship management (CRM) software or other tech, your cloud telephony system should play nicely with it. There’s no need to spend money on new software that integrates with your phone system.
  • Happier customers: In the intro, we mentioned the superior latency of calls on a cloud telephony system. Besides that, you can also use features like number masking, automatic customer priority, estimated hold wait times, and more. Customers won’t feel like they’re wasting their time on the line, improving their satisfaction.

What’s the Difference Between Cloud Telephony and PBX?

We touched a little in the intro on the differences between cloud telephony and a more traditional PBX system. Let’s expand on those points now.

First Tier of IaaS Services

Infrastructure as a service or IaaS is a means of cloud computing. If you’ve heard of the platform as a service (PaaS) and software as a service (SaaS), it belongs in the same family. IaaS deals more with the cloud.

IaaS services don’t vary too much from what we described in the prior section. Instead of providing networking and storage hardware, their own servers, and a data center onsite for themselves, a business using IaaS services doesn’t have to do any of that. The cloud service provider does it all for them.

Compare that to a traditional PBX system. Someone using that system does have to provide networking and storage hardware, servers, and a data center. Otherwise, their telephony system doesn’t work. The amount of time, money, and effort an endeavor like this can cost makes cloud telephony infinitely more appealing.

No Single-Server Cluster Use

Then there’s the matter of the servers themselves. If you know anything about cloud computing, you’re aware that when you save your data to the cloud, it goes to a dedicated server. The same is true of cloud telephony. The larger your company or the more calls you make and receive, the greater your server needs.

That’s why, in cloud telephony, service providers will never limit you at just a single server. You’ll have several clusters for storing and accessing data in real time. This goes back to the point we made in the last section about scalability. Using cloud telephony gives you that freedom to grow your business. You know you’ll have a phone system that will grow as you do.  

With a PBX phone system, that’s not nearly as true. First, we have to assume you have an IP PBX system that’s using some Internet capability. Otherwise, you probably don’t have a server at all.

Since you’re not using a cloud service provider, all the servers you rely on will come from your own budget. Some IP PBX systems can get by on a single server, but what if you want to expand your business? You or someone in your company would have to shell out for a new server, and then maybe even another one after that. This gets expensive in a hurry. Also, you need the room to house these servers, which you may not have.

All that means you limit your company’s growth potential unless you move to cloud telephony.

The Freedom to Receive Calls from Almost Anywhere

While IP PBX has video calls, voice calls, and more, you don’t get as much calling freedom. As we discussed earlier, with cloud telephony, you can set it up so calls get forwarded to your number from around the world.

This makes your company look like you have a global reach. You can also expand your customer base since you can take all the calls that come to you. How’s that for beneficial?

Reduces or Eliminates the Need for Other Phone Lines

With its hands-off approach, many integrations, and awesome latency, there’s little need for additional phone lines with cloud telephony. You can set up and then add on if needed by using several servers. Cutting down on phone lines saves your company money. Isn’t that what any business wants at the end of the day?

Should You Use Cloud Telephony?

While it’s your choice, if you have a company of any size destined to grow, we think it’s smart to use cloud telephony. You can cut down on extraneous phone line costs, for starters. You can also take more calls and use less hardware while you do so.

Also, it’s 2019. As we mentioned before, many people consider cloud telephony cutting-edge. Upgrading sooner than later will help your company run more efficiently and modernly.


Which companies provide cloud telephony services?

The following companies specialize in cloud telephony:

How does IaaS work?

To use IaaS for your business, you first need a wide area network or WAN. The Internet is considered a WAN, by the way. Then, with the services from your cloud provider, you can add databases, middleware, and more via an application stack.

When you sign into your IaaS platform of choice, you make virtual machines that house storage buckets, databases, and other middleware. Two such examples of IaaS services are the Google Cloud Platform and Amazon Web Services.

Are there free cloud phone systems?

If you’re a startup or a small business that’s tight on money, you’ll want to cut corners where you can. For instance, can you get cloud telephony services for free?

Several free cloud-based services do exist, yes. One of these is PingMe. This phone system designed for entrepreneurs and small businesses uses your smartphone in the cloud. You’ll get your own local number (for free). You can also get a business number with six extensions.

If you want to add world calling credits, remove ads, transfer a local toll-free number or local number, or get a new phone number, you’d have to pay. In that regard, PingMe isn’t totally free. Very few if any cloud phone systems are, at least completely. It’s better to pay so you can ensure higher quality service.


Cloud telephony is a cloud-based means of making, forwarding, and receiving phone calls. You can customize the scope of your services and you can take calls from many locations worldwide.

Since you don’t provide the hardware, servers, or data center yourself, you have lots of room for growth with a cloud telephony system. That’s not as true if you’re still using PBX. You must pay for your own hardware and equipment in that case. Scalability becomes an issue as well since it’s tough to accommodate for future growth.

If you’re frustrated with your current phone system, we’d recommend moving to cloud-based telephony. It can save money, increase customer satisfaction, and help you upgrade to a modern, scalable option.