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Cloud phone systems use the internet and a VoIP service to transmit audio and data between callers. Learn the pros and cons of cloud phone systems.
Major U.S. companies have begun the process of decommissioning “POTS” – the copper-wire-based, analog “plain old telephone system” we’ve used for more than 100 years. They’re replacing it with a modern digital network that uses the internet as its backbone instead.
At the same time, businesses are investing in cloud phone systems. They offer more features, better sound quality and more ways to communicate than traditional switchboards and exchanges. In this article, find out what cloud-based phone systems are, how they work and how much they’ll cost your business if you want to switch from a traditional setup.
Editor’s note: Looking for the right phone system for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.
Unlike the landline phone system your business likely relies on right now, cloud phone systems use Voice over Internet Protocol (VoIP) technology to deliver voice communications and other data to callers on any internet-connected device. These types of business phone systems typically offer more calling features than traditional analog systems. These legacy systems also often require expensive on-premises PBX equipment connected to the public switched telephone network to operate effectively.
Cloud-based phone systems are widely used as part of a unified communications platform to handle inbound and outbound calls, auto attendants, voicemail, chat, SMS messaging and business faxing. Most modern phone systems integrate with email applications and top CRM software to ensure that all communications can move through one easy-to-use system of record. These attributes make them ideal for established and growing businesses with evolving communications needs.
Advanced calling features include:
Cloud phone systems also integrate better with popular business tools like email applications and CRM software. Your computer network and cloud system can monitor, record and analyze all customer interactions, giving you better oversight on important issues like revenue generation and team performance.
A cloud phone system uses your internet connection and a third-party VoIP service provider to transmit audio and other forms of data between callers. Cloud and hosted phone systems require only an internet-connected device with a microphone and speaker to work. This is in contrast to traditional on-premises private branch exchange (PBX) phone systems, which are complicated to operate and require companies to purchase and maintain expensive hardware and software.
>> Learn More: What Is a Cloud PBX?
Most VoIP phone service subscribers use “softphones” instead of traditional desk phones. A softphone app refers to software installed on an internet-connected device, such as a mobile phone, tablet or computer, making them capable of calls. For users who prefer the feel and functionality of a traditional analog desk phone handset, many phone manufacturers produce IP phones that look and work like a desk phone.
You can also convert many traditional business desk phones to work with cloud-based systems through a VoIP adapter.
The advantages provided by a cloud-based phone system will outweigh any potential disadvantages for most businesses today. However, you need a fast and robust business broadband internet connection to get the most from a cloud-based phone system, including the best call quality and access to advanced features.
Below are the pros and cons to keep in mind when deciding whether a cloud-based phone system is the right setup for your business’s ever-changing communications needs.
Cloud phone system pros | Cloud phone system cons |
---|---|
It allows calls to and from anywhere. | It requires an internet connection. |
It integrates with popular business applications. | Many don’t interface with older analog equipment for paging or facility controls. |
You have the freedom to use any internet-connected device. | There’s the potential for latency and choppy audio in Wi-Fi dead spots. |
There’s no complex or expensive hardware to purchase and maintain. | Location data is limited for emergency calls. |
At first glance, it can be difficult to distinguish between the varying offers made by different VoIP providers.
To choose the right cloud system for your business, take the following steps:
>> Learn More: How Does a Virtual Phone Number Work?
The cost of cloud phone systems varies based on the features you need and how big your team is. You can find a cloud-based phone system with basic business-class VoIP features for less than $20 per month per user.
If you’re looking to upgrade your phone system from an older on-premises PBX phone system or traditional landlines, you’ll get everything you need and more in terms of calling features with an entry-level cloud-based business phone plan. However, any business that wants to use many of the advanced calling features, like automatic post-call notes, unlimited video conferencing and real-time analytics, should expect to spend more than $30 per monthly user for a mid-tier or top-tier plan.
>> Learn More: Landline vs. VoIP
Some cloud phone system vendors will let you choose from multiple plans for different employees as you continue to build your sales team, offering advanced capabilities for sales and customer service employees and a lower-priced plan for support staff or in-office teams that don’t use the phone as often.
Generally speaking, cloud phone system providers structure their pricing per monthly user with discounts of around 25 percent for annual commitments and further reductions in the price per seat for larger companies purchasing a significant number of user accounts.
Our team of business phone experts spent a great deal of time with the industry’s leading cloud-based phone systems. In our search for the best business phone systems, we examined popular options and compared and contrasted them. Below are some of our top picks for established and growing businesses.
Dialpad’s service is cost-effective. It offers two quoted plans: from $15 per user per month for its Standard package to $25 per user per month for Pro. The Standard package is well featured for SMBs, and its Pro package is best suited for larger businesses. There’s an Enterprise plan with negotiable rates that has no restrictions on office locations or ring groups. The implementation of AI into Dialpad has been impressively handled.
Features standard to all plans include:
Learn more in our comprehensive Dialpad review.
GoTo Connect has two plans – Basic at $27 per user per month and Standard at $32 per user per month. The range of features offered on both subscription levels is roughly identical, except that Standard offers more – for example, you can invite 150 meeting participants on Basic but 250 on Standard. There are some Standard-only features, like call recording, real-time analytics and Smart Notes.
You can access the following features on both plans:
Find out more in our in-depth GoTo Connect review.
Nextiva offers three subscription levels: Essential, Professional and Enterprise. Prices range from about $23.95 to $37.95 per month for up to four users to $17.95 to $31.95 per month for 100 or more users. Professional has more features, like voicemail-to-SMS notifications and advanced integrations. Enterprise has a more sophisticated set of app integrations and exclusive functionality like call recording and voicemail transcription.
All three plans offer:
Available Nextiva integrations include Salesforce CRM, Salesforce Service Cloud, HubSpot, Zendesk, Microsoft Teams, Oracle Sales Cloud, ServiceNow, Outlook and Google Contacts, as well as advanced integrations with many CRMs.
Read more in our latest Nextiva review.
Ooma’s pricing ranges from $19.95 per person per month with its Essential plan to $29.95 for its Pro Plus plan. For video conferencing, text messaging and call recording, you need to select the Pro plan at $24.95 per person per month. For team chats, CRM integration, hot desking and call queuing, you need the Pro Plus Plan.
Standard features across all three plans include:
Learn more in our Ooma review.
RingCentral offers three subscription levels: Core at $20 per user per month, Advanced at $25 per user per month and Ultra at $35 per user per month. If you have telesales or customer service managers looking after a team, you’ll probably need, at the very least, the Advanced option, which has call whispering, barging and monitoring. There isn’t a vast difference between the Advanced and Ultra plans, except Ultra users get unlimited file storage and device analytics (primarily for IT admin use).
Standard features across all RingCentral options include:
Learn more in our RingCentral review.
Zoom’s plans are based more on calling destinations than access to functionality. For $10 per user per month, subscribers get access to the Zoom network with metered U.S. and Canada calls. For $15 and $25 per month, you get unlimited outbound calling.
All subscribers receive:
To access SMS and MMS messaging, you must be on either the $15 or $25 monthly tier.
Read our updated Zoom review.
Like Nextiva, Vonage offers three plans whose price depends on the number of subscribers within your company. The Mobile plan is $19.99, the Premium plan is $29.99 and the Advanced plan is $39.99. Vonage occasionally offers sales for new accounts.
On the Mobile plan, users benefit from unlimited domestic calling, desktop and mobile apps, and SMS and MMS messaging.
Premium subscribers receive unlimited video conferencing for up to 100 guests, support for VoIP desk phones, app integrations and auto-attendant services. Advanced subscribers get call groups, voicemail transcription and up to 15 hours per month of on-demand call recording.
Read our comprehensive review of Vonage.
8×8’s cloud phone system has two iterations: Unified Communications with two plans (X2 and X4) and Contact Center with three plans (X6, X7 and X8). The more expensive subscriptions include extra features, making those plans more suitable for omnichannel contact centers.
Each of the five subscription levels offers the following features:
X4 customers benefit from call barging, monitoring and whispering, as well as supervisor and caller activity analytics. X6/7/8 clients receive agent workspaces, omnichannel routing, skills-based routing, post-call surveys and more. There is also a range of additional chargeable extras for all clients.
Read our updated review of 8×8.
Jeff Hale contributed to this article.