Cloud-based phone system for small businesses explained

August 18, 2022

It is a common misconception that cloud-based phone systems are mostly beneficial for large enterprises with complex IT requirements and big budgets. Small businesses are also seeing major benefits including cost-efficiencies, scalability, and the ability to make and take calls from anywhere. 


small to medium businesses guide


Small businesses embraced cloud technologies through the pandemic, when business communications became home-based, calling into question the suitability of our office-based telephony. Platforms like Microsoft Teams and Zoom became crucial for business communications.  

Now, as we continue to collaborate and communicate digitally, cloud technologies have proved their worth and businesses are looking to get more out of them. Small businesses are turning their attention to telephony, and fully bringing their business communications under one roof with cloud-phone system. 

What is a cloud-based phone system? 

Cloud-based phone systems utilize platforms that are hosted off-premises and voice over internet protocol (VoIP) internet-based voice communications, replacing the need for traditional PBX equipment. Since they operate through the internet, they do not require on-premises equipment or hardware. Because of this, they can be operated as a service at much lower costs and maintained more easily in comparison to traditional telephony. They can also be scaled up and down according to number of users and business requirements. 

Cloud-based phone systems are part of the Unified Communications as a Service (UCaaS) offering, which brings a plethora of cloud communication features under one roof. Those tools typically include video conferencing, instant messaging, file sharing and CRM and more advanced features. Moving your telephony to the cloud provides the opportunity to integrate your calling with the broad suite of communication and customer service features that UCaaS has to offer. 

For small businesses, cloud-based phone systems do more than replace your legacy PBX. They offer an entire hub for hybrid working to power a new wave of collaboration and productivity.  

How does a cloud-based phone system work? 

With a traditional phone, calls are routed from a private branch exchange (PBX) to the public switched telephone network (PSTN) and then to the call recipient. Cloud-based phone systems work on the same premise, and essentially work through virtual PBX’s that connect to the public  network. In terms of how you connect to the PSTN, you will need to decide from a few options that differ according to your business requirements. 

With regards to cloud phone numbers, there is one key difference from a traditional PBX. With a legacy system, a phone number belongs to a telephone and a user’s name was associated with that number. With cloud phone, the model is reversed, and the number belongs to a user. In order to make or take calls from a cloud phone, all a user needs is a supported device and an internet connection. 

Why are small businesses moving to cloud-based phone systems? 

The benefits of cloud phone systems for small businesses are vast and an increasing number are now the benefits which include: 

  • Cost-savings: Cloud phone systems are more cost-efficient, reducing costs of 40-80% for the average business’s telephony needs. Compared to landlines, the total cost of installation, setup and maintenance is minimal. If you make global calls, they can be made at a much cheaper rate in the cloud. Finally, you can expect more flexibility with plans and more tailored solutions to your business. 
  • Business continuity: One key benefit of cloud phone systems is the immediate flexibility and agility that it offers, which is essential for home working. With cloud phones, your number is not tethered to a specific location as they are with static, landline, desk-phones. Cloud telephony means you can take and make calls from devices like a mobile phone or laptop allowing for more efficient and effective communication with customers.   
  • Reduction in IT time and resource: Switching to a cloud phone system means you can say goodbye to bulky equipment and complicated hardware. This means less time troubleshooting problems associated with legacy PBX equipment and less back and forth with telecoms companies. 
  • Grows with you: With a cloud phone system, you can adjust your number of users depending on your business requirements easily and quickly. As your business changes, you also benefit for new features and functions that are offered alongside cloud-phone systems. 

What are some options for cloud based phone systems for small businesses? 

Use of Microsoft Teams and Zoom skyrocketed during the pandemic, with millions of businesses relying on them to fulfill their hybrid working requirements. While most are familiar with their video conferencing features, less are tuned in to its cloud phone capabilities. To start using calling in Microsoft Teams or Zoom, you must connect to the PSTN and both platforms offer different options for doing that. 

Cloud phone for Microsoft Teams

Microsoft Teams is the fastest growing app in Microsoft’s history and shows no sign of slowing down. 2022 statistics show that Teams now has more than 270 million users, up from 145 million reported in 2021. The ubiquity of Teams isn’t surprising, given its inclusion as part of your Office 365 license, posing no extra costs to users. It also offers industry-leading functionality with built-in instant messaging, document sharing, video collaboration, and special customization options for small businesses. 

Its cloud telephony component, Microsoft Teams Phone, is available as a full business telephony solution. It allows businesses to make external calls from within the platform and is a natural next step for those who are already using Teams. 

Microsoft Teams cloud based phone system for small businesses, offers a streamlined process to connect Teams Phone, with three options: 

  • Calling Plans: These are Microsoft’s off-the-self solution to connect, and are the most straight forward option. They are provided by Microsoft from the provisioning and the delivery of service and are connected through the Microsoft 365 Admin Centre. 
  • Operator Connect: Also allows you to add calling directly from the 365 Admin center by connecting you with carrier services from approved third-party providers. It affords the convenient set-up of Calling Plans, with more cost-effective options offered through external carriers.  
  • Direct Routing: Supports organizations that need more flexibility and have more complex requirements. These could be anything from sophisticated configuration demands to the integration of other applications such as contact centres. As with Operator Connect, there are cost benefits available, particularly through providers offering more transparent “pay for what you use” pricing models. These are usually favored by larger organizations with a number of locations.  

Our expert opinionOperator Connect is a compelling option for businesses with more than 100 users. It is more cost-effective than Calling Plans and since you’re working with an Operator, you’ll have access to higher levels of support, and more coverage. Since you can configure and add Operator Connect into Microsoft Teams from the Admin Centre, it is a convenient and easy way to add voice services.  

Cloud-phone with Zoom 

The exponential growth in video conferencing through the pandemic made Zoom a household name. With an intuitive interface and cost-effective pricing, the world turned to Zoom for everything from family lockdown gatherings to official government briefings. And two years on, as the work from home phenomenon continues, small businesses look to unify their business communications fully with their attention on calling. 

Zoom's option for a cloud based phone system for small businesses is Zoom Phone. Offering full PBX capabilities from the same interface customers know and love from Zoom meetings, Zoom Phone is a compelling replacement for legacy phone systems. With no complex or outdated hardware needed, Zoom phone is making it easy to take your business calling to the cloud. 

Zoom Phone offers three main ways to enable external calling: 

  • Phone plans: These are Zoom’s native calling plans that offer local/international bundles charged on a per user, per month basis 
  • Phone Provider Exchange: A new Bring Your Own Carrier option allowing businesses to find and connect with their preferred carrier from within the Zoom interface. From there, they can also and self-manage their numbers from their selected partner 
  • Bring Your Own Carrier on-premises: Businesses select their preferred SIP carriers and install on-premises Session Border Controllers (SBCs) to connect to their network  

Our expert opinion: Zoom’s phone plans are a good option for those with basic call requirements and a limited number of users in the regions that Zoom covers. While they are convenient, they do often end up being more expensive for users, which is why SMBs should consider their new Phone Provider Exchange Program. 

Want to get started now? 

  • If you have 50-500 users in the USA or Australia, get connected in minutes with Connected Voice 
  •  You can also build your own solution for cloud-phone for your small business here 
  • If you have over 500 users, chat with us directly about your requirements 

Tania Morrill

Subscribe Here!

Articles you might enjoy

View All

Pure IP Launches Integrated WebRTC and SIP Trunking Service

Should Your Business Use SD-WAN for Voice Communications?

Pure IP Is Skype for Business Ready