These days, it seems like every tech company and software producer likes to say it’s in “The Cloud.”

A major cable company recently launched a cloud-based phone service for businesses in an effort to pull customers away from traditional telecomm giants.

The company promises to offer business with “on-the-go” employees affordable, reliable, high-quality service that can be accessed anytime anywhere.

This kind of promise should certainly perk up the ears of small businesses and large corporations alike, but what is this mysterious cloud and what does it mean for businesses when it comes to basic, but critical, functions like phone service?

What is the Cloud?

The cloud is any system of Web servers that store data and applications that users can access through a network.

Those of you who use a web-based e-mail program like Gmail, Hotmail or Yahoo already have some familiarity with cloud computing — whether you realize it or not. Instead of installing an e-mail program on your computer, you access your e-mail through your Web browser. That e-mail is stored in the service’s cloud rather than on your computer, according to HowStuffWorks.com.

Today, more and more traditional software applications are becoming available in the cloud, which, according to HowStuffWorks, takes the pressure off of personal computers to run programs. Instead, the network of computers offering a specific service — everything from word processing to phone service — does the heavy lifting.

Since they are not hard-drive based, users can access these programs either through their Web browser or through a special application provided by the service.

Advantages of the Cloud

Access: Users have access to cloud-based applications and software on any computer or device with an Internet connection. Data isn’t limited to one computer or corporate network.

Hardware savings: There’s no need to invest in expensive hardware like super-fast computers with extra storage because the cloud service will run programs and store data for you.

Software savings: For corporations, there is no need to purchase a software license for each individual user. Instead, they can pay a single fee to a cloud service company.

Less storage space needed: Big companies typically rely on a large set of computer servers to keep their business up and running. With cloud computing, a third party handles the job of storing data, which means you can stop renting out extra space for your server or gain back a room or two at headquarters.

Source: HowStuffWorks.com

Business Phones and the Cloud

Since just about any software program imaginable can migrate to the cloud, it only makes sense that phone service is also jumping on board, which is great for business.

Hosted or virtual phone systems (also known as VoIP), which operate in the cloud, offer users significant savings on call costs and technology.

Rather than having to invest in an expensive, proprietary-based PBX system, which requires expensive hardware and equipment and a staff to operate it, companies can purchase their phone system as a service.

Since the hardware needed to operate the phone system is on the cloud (with the exception of the phones and/or adapters), companies save money, and all maintenance duties fall to the service provider, instead of in-house employees.

But Skyrope.com advises choosing your hosted phone service wisely. Look for large, reputable providers who deliver your service through a dedicated connection or private network rather than through the internet, which will ensure better quality of service.

Features of Cloud-based Business Phone Service

Forbes contributor Gene Marks shared the pros of switching to a hosted phone system in a 2010 article. He’s found not only the cost appealing, but also the endless array of useful features, which include:

• Auto attendants
• Dial-by-name directories
• Toll-free numbers
• Multiple extensions
• Voicemail
• Caller ID
• Voice to e-mail
• Conference calling
• Virtual fax
• Calls forwarded to office, home and cell phones
• Video conferencing
• Call recording
• Call accounting

Also, because hosted phone systems are growing in popularity, the types of features available will only increase as service providers innovate to attract new customers.

Which begs the question, will you jump on the Cloud for your company’s phone service?

For more information on hosted business phone service, visit Business.com.