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Cloud-based vs. Traditional Telephony System: Which one should you opt?

Simplify your phone communication with a cost-effective, secure and reliable virtual phone solution

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Paras Kela

Senior Writer:

green tickDate: February 8, 2024

Are you looking forward to implementing a business phone system or upgrading it?

If yes, you have two options here – Cloud-based phone system and traditional telephony system. The first one refers to VoIP (Voice over Internet Protocol) services, whereas another one refers to landline phones.

Before, leveraging any of the above phone systems, you must ponder over a few questions:

What do my employees need – softphone or desk phone?

Shall I enable my employees to work remotely?

What features will my business phone number require?

What should I opt for – on-premise or cloud-based deployment?


As per a Google study, almost 70% of mobile users click the call feature from their smartphone whenever they search for a business.

Also, less than 8% of homeowners have a landline, whereas 47% of them use a cell phone.

So, you must deploy a reliable phone system for your local or global business.

Before you dive into any decision, let’s comprehend cloud telephony as well as a traditional phone system.

Cloud vs traditional telephony infographic

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Traditional Phone System

Traditional phone system, i.e., landline phones, involves installing a phone system on-premise. It connects to all of your phone extensions and links them on a public phone network via PSTN (Public Switched Telephone Network) or ISDN lines. You need to keep a fixed team to answer calls and direct the callers to the right person. It demands you to maintain an upkeep schedule for every location you conduct your business in.

Cloud-based Phone System

Cloud telephony is a voice and messaging service that lets you connect to your clients with a remotely hosted system and a virtual phone number. It works on VoIP and PSTN. Cloud telephony transcends geographical boundaries to let you can your customers connect seamlessly anywhere and at anytime. As it uses the internet to make and receive calls, it surpasses the functionality of conventional business phone systems.
In several facets, Cloud based telephony scores more over the traditional phone system. We have outlined some significant factors here. Cloud unlocks new revenue opportunities for VoIP carriers.

Difference between Cloud-based Telephony & Traditional Telephony

1. Features

Since the 1800s, businesses have been using traditional telephone systems. It remains connected to copper wires, which in turn runs underground and connects with other landline phones. Since it offers a tried and tested technology, it has been highly reliable till date.

Landlines remain unaffected even in case of power outages unless you use a cordless phone. It provides 100% uptime and works at minimal maintenance cost. You can leverage several calling features like call forwarding, call conferencing, voicemail, and more with a landline but they come at a cost.

When it comes to comparing VoIP in terms of features, it is matchless. It gives a myriad of features for the best calling experience. Here are some of the noteworthy features of a VoIP phone system – Call Forwarding, Call Barging, Call Recording, Call Analytics, Auto attendants, Voicemail to email/text, Integration with third-party tools, On-hold music, and more.

Moreover, cloud-based phone system lets you use various devices to make and receive calls – be it your smartphone, PC, or desk phone. All it requires is an active internet connection. It is easily scalable as per your business growth.

Conclusion: As far as availing advanced calling features is concerned, cloud-based telephony system wins the race.

2. Reliability

As you get a separate line for each connection, landlines devote consistent performance. But, with the transition to broadband and IP services, the conventional phone system is getting obsolete. People are moving to the internet and choosing ways to connect that no one had imagined a decade ago. As a consequence, telecom businesses face a considerable downturn.
According to a survey, 40% of households in the USA do not have landlines.

This means the landlines aren’t able to meet users’ changing needs. On the contrary, the virtual business phone number is performing consistently well and will continue to do so in the coming years. That’s because VoIP is evolving and growing.
By 2021, the VoIP industry is expected to reach $140 billion. 4G, 5G, and broadband are rendering stability to the internet and thus increasing the reliability of cloud-based phone system. With services like online virtual phone number, employees can reach potential customers on their very first attempt. Hence, each employee is saving up to 32 minutes per day.

Cloud-based phone number immediately routes your call to another number or voicemail if your request gets dropped. However, it depends on what features you have enabled for call disconnection.

Conclusion: Undoubtedly, landlines are reliable. But, they are becoming obsolete. As opposed to it, the telecom industry is investing heavily on VoIP as demonstrates high reliability in the long term.

Cloud telephone or traditional phone?

3. Mobility & Flexibility

If you have an analog phone system, you would be aware of the hassles while connecting a new employee or a multi-channel number to it. In case you intend to change your office, you will have to start the process of installing a PBX system all over again. This is because you will not be able to keep the old phone numbers while moving to a new place. It results in many inconveniences and loss of customers too.

With a virtual phone system, you need not purchase any expensive equipment for installation. All it requires is an internet-connected device. It lets you add an unlimited number of subscribers irrespective of where your office is. It means you can keep the same number no matter how many times you change your office.

Conclusion: You can leverage the functionalities of a virtual phone number at any time and from anywhere, which is impossible with a traditional phone system.

4. Cost

What’s your last phone bill? Might be a huge number! Isn’t it?

Well, the cost is the most debating factor when comparing traditional and cloud-based phone system.

Let’s begin with landlines. The setup cost is less than $100. Now, add in the monthly fee. The figure will be $100 per line. Suppose that you require 10 lines for your business. Thus, every month, you would be spending $1000. When you add other functionalities like call transfer, call queuing, and more, you will require installing a Private Branch Exchange (PBX) on-premises. And, hefty maintenance costs quickly add up.

Very expensive, isn’t it?

This is the very reason why businesses are switching from PBX systems to hosted VoIP systems.

Data compiled from the experiences of multiple companies shows that businesses can save up to 60% by switching from landline to VoIP.

VoIP service providers like CallHippo provides basic plans for free. Nevertheless, different pricing plans are starting from $8 per month to $35 per month. Each varies with the features they provide.

Conclusion: In terms of cost, VoIP beats conventional phone lines. If you are looking forward to saving on costs, go with a cloud based phone system.

5. Technology

Landlines work through PSTN whereas virtual business phone number operates using the internet. Traditional phone system relies on a complex network of cables while VoIP is a technology of the wireless age.

Landlines have become dated technology. That is why they aren’t considered reliable in the long run. VoIP uses the internet and it isn’t going anywhere. So is VoIP. It’s the modern way businesses are communicating with their customers.

Conclusion: Landline is a thing of the past. VoIP is new and updated.

Now that you know the significant differences between both the phone systems, let’s mull over the benefits of each.

Benefits of Traditional Phone System

  • Expenses of server ownership reduce over time
  • The provider often provides professional training
  • Owners have a huge degree of control
  • SIP trunking reduces disruptions in calls
  • You can access additional features by adding open-source feature sets and APIs

Benefits of Cloud-based Telephony System

  • Zero setups and maintenance cost
  • It can easily make additions and changes
  • No need for capital investment
  • Free of cost calling between offices
  • Manage calls and features as and when required
  • Excellent voice quality
  • Support for remote working

With careful consideration of your business needs for now and in the future, ensure that you choose the right one between on-premise and cloud solutions.


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