InícioCloud Phone SystemHow Do Cloud-Based Phone System Work?

How Do Cloud-Based Phone System Work?

A cloud-based phone system services is one in which the software and hardware are not housed in the customer’s building. It is instead provided by a service provider.

The hardware and software for an on-premises telephone system will be located at the customer’s building (usually in your server closet).

Central processing units, servers, phone system cabinets, and common equipment units are examples of this.

The telephone has been an essential tool for communication, particularly in business, since its invention.

Despite the numerous other modes of communication available today – text messages, emails, and so on – phone calls remain the quickest and most personal way to converse with someone, short of speaking face-to-face.

This is due to the fact that, unlike text-based communication, your tone is communicated over the phone. This adds nuance and layers of understanding to your conversations, which we are adept at detecting.

That is why phone calls are so common and important, and why you should use cutting-edge technology for your company’s phone systems.

Implementing a cloud-based phone system can have a long-term positive impact on your business.

What is a Cloud-Based Phone System?

A cloud-based phone system, also known as an Internet-based phone system, Internet telephony, or VoIP (Voice over Internet Protocol), is a phone system that operates over the Internet rather than traditional telephone lines.

Cloud-based phone services use a network of phones to route all calls through an Internet connection. It does not rely on on-premise hardware, so your company can avoid the costly maintenance and infrastructure required for a traditional telephone line system.

You only need a broadband Internet connection to start making calls for your business with a cloud-based phone service.

Voice signals are transferred between two IP addresses by cloud-based phone services. Here’s a step-by-step explanation of how it works:

  • Voice signals are converted into data packets small enough to transmit, and vocal samples are divided into voice “packets.”
  • These packets are sent to the receiver after traveling through the Internet to the VoIP provider.
  • To route the call, the VoIP provider employs a cloud-based Private Branch Exchange (PBX).
  • Call data can then be sent to any VoIP phone or landline.
  • When data arrives at its destination, it is converted back into voice signals.

Cloud phone systems for business

Cloud-based phone systems are an increasingly popular option among the many types of phone systems available to small businesses, offering dependable service, low costs, and a plethora of business-friendly features, but they may not be the best solution for everyone.

Continue reading to learn more about cloud phone systems for business, and how to determine if they are right for your company.

How to decide if your business needs a cloud-based phone system

There are numerous factors to consider when determining whether a cloud-based phone system is right for you, whether you are switching systems or starting from scratch. Here are a few key preliminary considerations:


Do you already own IP phones that can be easily integrated into a cloud system? Or are all of your phones traditional and will necessitate the use of a desk phone adaptor? Consider your existing equipment carefully because it can have a significant impact on costs.


Aside from the equipment, you must determine which features you pay for in your current system, which features you do not need, and which features you prefer in your new system.

Check to see if these features are included in your package or if they must be purchased separately.


Cloud-based phone systems rely solely on the internet. Choose a cloud-based phone system if you do not have a strong and secure internet connection. A traditional landline phone may be a better choice.

It’s your company

If you own a small or medium-sized business, a cloud-based phone system can help you save money on installation and maintenance while also providing ongoing flexibility that allows your communication system to grow with your company.


Because calls are routed through a provider and stored on a hosted server, a cloud system may not be the best fit if you prefer or require complete control over your system and data. Businesses that handle sensitive data may also face issues with inadequate security.

The History of Cloud-Based Phone Services

Cloud-based phone systems would not exist today without the inventions of the telephone, the Internet, and Internet Protocol (IP).

The telephone, which was invented in the 1870s, relayed calls with the help of an operator and a switchboard.

AT&T invented touch-tone buttons in the 1900s, which paved the way for digital call switching. A human operator was no longer required.

The Advanced Research Projects Agency Network created the first version of the Internet in the mid-1960s.

It was primarily used for communications between the United States Department of Defense and the United States Military.

It wasn’t widely used until the 1980s, when the Personal Computer (PC) became more popular. People used these computers to connect to the early Internet via telephone lines.

In 1972, IP was invented to define how information travels between two computers. The Hypertext Transfer Protocol and the Universal Resource Locator were invented in 1989. These inventions laid the groundwork for the modern Internet.

See also: The Cloud Phone System everything you need to know

Cloud-based phone systems, also known as VoIP, were invented in 1995 by a company called VocalTec, who created what they called the InternetPhone.

This was the first widely available Internet phone application. It allowed one Internet user to communicate with another through speakers and a microphone. It was created to help people save money on long-distance and international phone calls.

Internet voicemail applications were developed by 1996. VocalTec went on to develop VoIP telephone-to-telephone and computer-to-telephone calling capabilities in 1998.

Initially, cloud-based phone system adoption was low, owing to the fact that users had to listen to advertisements before, during, and after their calls.

The 1990s were a decade in which telephone equipment manufacturers and telecommunications specialists began to capitalize on new technology.

They began to equip their switches with IP capabilities. They eventually created software that allowed users to connect a VoIP adaptor to their phones.

VoIP became popular in the early 2000s. Three different companies introduced VoIP switching software as add-ons to their routing equipment during this decade.

How Do Cloud-Based Phone System Work
How Do Cloud-Based Phone System Work

Because of this accessibility, the number of VoIP calls increased to 25% of all voice calls. With the availability of broadband Ethernet, call quality has also improved.

Several full-service VoIP providers began to emerge in 2004. They provided unlimited domestic calling services for a flat rate and free calling for those who used the same VoIP provider.

Companies began to fully utilize VoIP calling capabilities at this time by establishing unified communications bases.

The future of cloud-based phone systems is bright today. It has become an essential part of many people’s daily lives because it simplifies many processes and provides a high degree of flexibility.

Further technological advancements in the near future are almost certain to make cloud-based phone systems even more convenient, if not indispensable.

Cloud-Based Phone Service Performance Metrics

In general, calls made over cloud-based phone systems result in high-quality calling experiences. However, some factors can still have an impact on the quality of these calls.


Jitter is an interruption in the flow of digital signal traffic that is frequently caused by electromagnetic interference. It has the potential to cause audio clicking, monitor flickering, and data loss.


Latency is the amount of time it takes for a data packet to reach its destination. Latency has an impact on the usability of communication devices or interfaces. It is also the time it takes for signals to travel across geographically dispersed devices.

Packet Drop

Packet loss occurs when transmitted packets do not reach their destination. Its side effects include data errors, jitter, and data corruption.

System noise, insufficient signal strength at the destination, software corruption, hardware failure, or overburdened network nodes can all cause packet loss.


This score is applied to voice testing processes and ranges from 1 (worst) to 100 (best) (best). It is calculated by calculating the percentage of users who are satisfied with the quality of a test voice signal after it has passed from a transmitter to a receiver.

Average Opinion Score

The Mean Opinion Score assesses the quality of the call, with scores ranging from 1 (unacceptable) to 5 (excellent) (excellent). VoIP calls are frequently in the 3.5 to 4.2 range.

These areas of performance must be monitored in order to ensure the highest level of call quality and reduce the number of dropped or interrupted calls.

Cloud-Based Phone Services vs. Landline

There are numerous factors to consider when deciding between a landline phone service and a cloud-based phone service, especially for a business.

Business phone services introduce a variety of needs and limitations, making it critical to weigh the differences between these two systems.

Traditional telephone lines rely on networks of copper wires, branch exchanges, and switches, as opposed to cloud-based phone systems, which use the Internet to transmit your voice as data.

This tried-and-true system has been in use since the 1800s, whereas cloud-based phone systems have only been in use since the 1990s.

Call forwarding, voicemail, call conferencing, and other features are standard on traditional phone systems. These, however, come at a cost. These features are immediately available with cloud-based phone systems.

How Do Cloud-Based Phone System Work
How Do Cloud-Based Phone System Work

Some features, such as voicemail-to-text conversion, are exclusive to cloud-based phone systems. You can also connect your cloud-based phone system to a variety of third-party tools and software. That is not possible with a traditional phone system.

Because a VoIP service plan is cloud-based, there is no need for large, expensive hardware. Installation is simple and takes only a few minutes.

To begin making calls, all you need is a broadband Internet connection, making the cloud-based phone system extremely portable. You can use your mobile phone as an extension of your office phone by using mobile applications.

Reasons to Use Cloud-Based Phone Services

You don’t buy a product when you use cloud-based phone services; you buy a service. You simply reap the benefits of this phone system while someone else handles the technical details. Among the advantages are:


The first and most appealing feature of cloud-based phone systems is their low cost. They are, in fact, a low-cost alternative to traditional telephone systems.

The only additional cost in obtaining a cloud-based phone service is the installation of an Internet connection; however, if you already have one, you will only have to pay for setup and monthly payments.

Most cloud systems are priced per user, include unlimited local and international calling, and offer free on-network calling, all of which help to subsidize costs. A cloud-based phone system can save your company a lot of money.


Reliable and efficient communication is critical for businesses of all sizes, from a one-person start-up to a large corporation with thousands of employees.

Any communication breakdown, and your company is likely to lose valuable time and money. You won’t have to worry about service outages with a cloud-based phone system.

Most providers experience few disruptions because the components of a cloud-based phone system are not housed in the same location.

The software can be housed in the cloud on a network of machines spread across data centers around the world. If one server fails, there are others that can take over the workload.

This decentralized configuration is known as geographic redundancy, and it is the reason why cloud systems have very little downtime.


Many businesses begin small and then grow to employ hundreds or even thousands of people. Your phone system will grow with your business if you use a cloud-based phone service.

Adding phone lines, extensions, and other features is simple and straightforward. To configure the entire system, administrators only need to use their admin panel.

This is in contrast to traditional phone systems, which require you to rewire the copper wirings or otherwise tinker with the on-premise equipment if you want to upgrade or change anything.


Phishing, intercepted calls, fraud, spoofing, and other security risks are constantly threatening your phone’s security.

While you should be aware of these threats at all times, a cloud-based phone system will provide you and your business with greater security than a traditional phone system.

Traditional on-site phone equipment is typically kept in a storage closet where anyone has access to it.

The cloud, on the other hand, employs numerous security measures, including data encryption, network security, HIPAA compliance, secure voice and video, and much more. These safeguards protect users and their data.


With a cloud-based phone system, you have more flexibility in terms of how and where you work. Your employees can access the office cloud communication even from remote locations such as a home office or while traveling on business.

Most service providers also provide a mobile app for smartphones and tablets. These apps will include all of the cloud phone system’s capabilities and features, allowing your employees to access real-time information from any device they choose.

Updates on the fly

You don’t have to worry about maintenance with cloud-based phone systems. Any new features or bug fixes are incorporated into the software, which is hosted at the provider’s data center.

These updates are then rolled out to your company as they become available. You can concentrate on running your business rather than dealing with phone system maintenance and upgrades.

Service that is hosted

Many cloud-based phone services are hosted services, with all hardware housed offsite. All you really need for a hosted cloud service is a good Internet connection and working IP phones.

You will not have to maintain any equipment or deal with any malfunctions because your service provider will handle all maintenance offsite.

The Age of Cloud-Based Phone Systems

Cloud-based phone systems are gaining traction among businesses of all sizes and industries. It provides its users with a dependable and adaptable phone system at an affordable price.

If you believe you could benefit from a cloud-based phone system, don’t wait. Lingo provides hosted PBX solutions.

We provide high-quality IP-based voice and data technologies to small-to-medium-sized businesses and clients through our extensive nationwide network. To learn more, please contact us today. We would be delighted to hear from you!

How to find a cloud phone systems for business

When you’ve decided that a cloud phone systems for business is what you want, the next step is to find a provider.

Each provider will provide different features and packages at various price points, so you must determine which one best meets your needs.

The best way to find the right provider is to conduct extensive research. Read company reviews, see if any offer free trials, and ask other small business owners in your industry for recommendations.

Check out our best business phone system reviews. Some of the most popular cloud-based services and hosted VoIP providers are listed below:

Deborah Navarro
Deborah Navarro
Sou jornalista e produtora de conteúdos para portais online, sempre criando conteúdos que sejam de interesse geral.

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