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Cloud Telephony: A Beginner’s Guide

beginners guide to cloud-based phone systems

If you’re a business owner looking to set up a phone system or update your existing one, then cloud telephony is a great choice. It scores over traditional telephony systems in multiple areas. Businesses globally have started to harness the many advantages it offers, including advanced customizations and seamless connectivity. 74% of companies have stated that cloud telephone systems are their most urgent investment priorities. 

The traditional telephony system, on the other hand, is nothing but your conventional desk landline setup that you find in most business houses. It doesn’t offer any great benefits apart from facilitating communication between employees and clients. 

Before diving into the benefits of cloud telephony, let us try to understand what cloud telephony is and how it works.

What is Cloud Telephony?

Cloud telephony, also known as cloud calling, is Unified Communication as a Service(UCaaS). A typical cloud telephony platform offers voice communication services along with a host of other features. UCaaS has started to replace most of the conventional enterprise phone systems, such as a Private Branch Exchange (PBX), due to its drawbacks, including scalability issues and high maintenance.

Cloud telephony eliminates these drawbacks as it doesn’t employ any hardware. Also, since the calls are made through the internet, there are minimal signal fluctuations and downtime as compared to the traditional phone systems. 

How is cloud telephony different from VoIP calling?

To the unversed, VoIP is short for Voice over Internet Protocol. It allows you to make audio and video calls over the internet connection instead of your regular landline connection. In other words, if you just have an active internet connection, you can subscribe to a VoIP connection and start making high-quality video and audio calls without any interruption. VoIP converts your phone calls into data packets that are transmitted over the internet. You can even use ethernet cables to make a VoIP call if you do not have a reliable WIFI connection. 

Many people tend to mix up VoIP telephony with cloud telephony systems. This is quite understandable as they seem to be very similar on almost every parameter. But there are certain subtle differences

The biggest difference is VoIP is just an automated calling system. Cloud telephony is much more than that. It provides a lot more features and services to businesses with the aim of making their communication system seamless.

Summary of differences between cloud telephony and VoIP calling

ParameterCloud TelephonyVoIP Calling
HardwareNo physical hardware required. Just phones are sufficient.Sometimes it might need physical hardware installation at the office premises.
ScalabilityOffers easy scalability. Extremely simple to add new users.Limited scalability is offered in some instances. Installed hardware only supports a fixed number of devices.
MaintenanceIt is completely taken care of by the provider as the system is hosted on their premises. In case of any issues, they will be instantly taken care of by them without any downtime. If the hardware is hosted on-site, a part of the maintenance has to be taken care of by us. In case of any issues, you will have to incur repair and maintenance costs. 
Remote WorkingCompletely supports remote working as users can use their own mobile phones to make calls through cloud telephony. It might not support remote working if it works only with the devices installed on the office premises. These devices might be connected to the hardware system or the switch. 
Data StorageEvery data is saved in the cloud. Your data is always safe and doesn’t get lost during a disaster.If your data is stored in internal data centers, it can be lost during a disaster. 

What is IP telephony, and how is it different from cloud telephony?

The differences are even more subtle when it comes to IP telephony and cloud telephony, mainly because there isn’t any major difference between IP and VoIP. You already know what VoIP calling is. IP telephony primarily constitutes technologies that enable voice calls, voicemails, video calls, fax, and messaging via IP’s packed-switch connections. The data is transmitted through a circuit-switched connection of the PSTN (Public Switched Telephone Network). IP telephony converts calls, faxes, and messages into tiny packets of data that are then transmitted through computer network lines. 

Working of Cloud Telephony

To understand the working of cloud telephony, you must know what VoIP is. The VoIP(Voice over internet protocol) is a sophisticated technology that allows you to make voice calls through the internet instead of traditional (analog) phone lines. When you dial the number you want to call, your service provider intercepts the signal and converts the analog voice signals into data packets, and then transmits them via your internet connection. That is exactly how your call is received by the person you call via cloud telephony. 

Cloud telephony systems have a concept called published number. This is the virtual number(that’s given to the outside world) through which your customers can connect with your organization. It forwards incoming calls to one of the PRI lines in your cloud data center. The PRI(Primary Rate Interface) line or circuit is an end-to-end digital telecommunication connection that allows over 23 concurrent transmissions of data, voice, or video communication between the network and the user.

Here is the working of cloud telephony servers with multiple PRI lines

  1. The incoming calls are intercepted by the PRI lines on reliable cloud-based servers. 
  2. These cloud-based servers are capable of call recording, IVR, and reporting and offer a bunch of other functionalities. They are also housed in reliable data centers with uninterrupted connectivity.
  3. The call distribution is done based on certain rules or based on the caller’s input in IVR. 
  4. There can be another way of distributing calls which is CRM lookups. For example, if you have separate teams for handling new and regular customers, the telephony server checks your CRM once the call is received. It will identify whether the caller is a new or regular customer and route the call accordingly to the respective teams. 

Here is the typical flow of incoming and outgoing calls

  1. The caller calls on your published telephony number.
  2. The call gets forwarded to the PRI lines in the cloud data center.
  3. The servers then play the Interactive Voice Response (if configured) and redirect the call to an employee based on the call distribution logic.
  4. Finally, the caller gets connected to the prescribed employee.
  5. During this whole process, your call gets recorded, telephony API communicates with your CRM (if configured), and after the call, everyone receives an SMS notification. 

How does a Cloud Telephony System differ from a traditional PBX system?

As you already know by now, cloud telephony systems eliminate the need for any physical equipment that is usually found in the PBX system. Your employees can communicate with each other or any customer via an internet-connected device. 

Getting started with cloud telephony is much simpler as all you need is a VoIP service provider and a reliable broadband connection. On the other hand, the traditional PBX system presents a steeper challenge in terms of initial setup. There are also high upfront costs involved in it. In a typical PBX setup, a telephone provider first visits your location and installs stationary equipment. You have to pay both for the labor and for the equipment installed. Also, in the long run, if something breaks or overheats or does not function properly, repairing them is not only costly but also can take a toll on your productivity.

Traditional PBX systems make long-distance calls quite expensive, and adopting advanced features like HD audio or call analytics can empty your coffers. 

Also, if your company is growing, then your phone system has to scale too. Scaling a PBX system means adding more equipment, which can add up to upfront costs considerably. But while using a cloud telephony system, you can scale up at a fraction of the cost because there’s no hardware involved.

Why adopt Cloud Telephony? 

Simpler to use

Cloud technology totally eliminates the necessity to purchase expensive hardware because all the services and functionalities are configured online. This gives you the flexibility to manage the system remotely. There is no need to be present physically in the office. The entire management of cloud telephone servers can be done online, that too, in a simple and fast way. It removes the complexities posed by a typical PBX system and also allows you to connect seamlessly.

Higher ROI

Every investment you make is expected to deliver a certain ROI. When you adopt a cloud telephony system, your employees are more accessible to clients, and the calls are more personalized. This means that you not only get access to a huge customer base but also engage them to drive upsells. On top of this, reduced hardware costs can improve your margins. The best part is you can scale cloud telephony systems without additional investments. All these make it an excellent investment for your business. 

Greater flexibility

Unlike traditional PBX systems, cloud telephony systems offer you the flexibility to carry your phone system anywhere. You can easily recruit remote staff who are situated anywhere around the world. It gives total freedom to do business the way you want. 

Improved productivity

Traditional PBX systems often interfere with an employee’s productivity; it can take days to set up the hardware in multiple locations across your organization. Also, in case a system fails, it can affect your services, which can negatively impact your relationship with the customers. Since the cloud telephony servers are managed offsite, there is minimal downtime. So employees can always stay connected with the clients. 

Better Security

There is a common misconception that anything ‘cloud’ is prone to cyber-attacks. However, this is far from the truth. Almost all the cloud telephony providers offer military-grade security along with strong encryption to safeguard conversations between your organization and customers.

Cloud telephony is growing rapidly in India due to a variety of factors. Here are some key factors that are responsible for the stellar growth of cloud telephony systems in India – 

#1 A rising need for low-cost communication systems among startups in India

As you know by now, the most important feature of cloud telephony is its ability to operate seamlessly without any initial hardware setup. This brings down the installation costs considerably. Similarly, there isn’t any maintenance cost or repair cost for cloud telephony systems. All these features make it a compelling choice for startups and SMEs in India who are operating on a shoestring budget. 

#2 Hybrid work culture

Even after the end of the pandemic, it’s no surprise that people prefer the hybrid work model over the full office model. This is understandable owing to the plethora of benefits the former offers over the latter, such as flexibility, cost savings, improved productivity, etc. Many companies are also supporting hybrid work culture to attract fresh talent and retain the existing ones. However, this posed a very important challenge. There were many communication issues cropping up between employees due to the absence of business phones at their homes. Cloud telephony, being device-agnostic, helped solve this issue. 

#3 Skyrocketing customer expectations

Customers’ expectations are increasing rapidly as they are spoilt for choices. Even a single sour experience with your brand can push them to your competitors. Bouncing of calls, lack of personalization during interactions, and poor call quality are some of the common sources of customer dissatisfaction when it comes to communication. All these problems are countered by a cloud telephony system, thanks to its advanced features like call routing, call recording, reporting, etc.

#4 Elimination of unnecessary spam calls  

About one in three people are subjected to sales-related spam calls every day. As a result, people are reluctant to engage even with legitimate calls. They avoid picking calls from numbers that do not have verified caller IDs. To avoid this, brands are keen on adopting cloud telephony solutions with their smart caller ID feature. This helps customers know the purpose of the call beforehand, and at the same time, brands can gain their trust. 

#5 Uninterrupted customer service

It is the backbone of any business. And without cloud telephony, uninterrupted customer service is not easy. Cloud telephony solutions come with IVR(Interactive Voice Responses) features and chatbots that help people resolve their queries instantly. Customers are also not kept waiting due to the smart call routing feature provided by the cloud telephony system that connects them to the right agent in a matter of seconds. 

Further Reading: How Cloud Telephony Systems will help shape the future of businesses?

How to pick a cloud telephony provider in India?

Here are the different factors you need to consider before picking a cloud telephony provider –

  1. The solution should offer access to advanced features like IVR, smart routing, call analytics, call recording, etc. 
  2. The solution should have 24X7 support and ensure there are hardly any downtimes or hardware breakdowns.
  3. The solution should offer regular updates to enhance the user experience.
  4. The solution should be ‘connected’’ with most of the utility tools such as CRMs, lead management tools, ATSs, etc.
  5. The solution should offer excellent security so that all your sensitive information is safe.
  6. The solution should offer a great return on investment and solve your pain point at a minimal cost.
  7. The solution should be easy to set up and manage even for newbie users. 
  8. The solution should be tailored to your precise needs. 
  9. The solution should be easily scalable and let you make unlimited calls without breaking the bank. 

Top Features to look for in Cloud Telephony Solutions

While shortlisting a cloud telephony provider, you must ensure that their solution provides some important features that can make the lives of your employees much better. Here are some of the top features you must look out for – 


IVRs lets you effectively manage all your inbound calls. Your customers can interact with your brand right away after dialing your business number, thanks to voice configurations and DTMF inputs. This feature is a must-have in your cloud telephony software if you are looking to elevate the customer experience. 


Auto-dialers are best suited for companies engaged in a lot of outbound calls. This intuitive feature automatically dials numbers from a list and connects your agent only if the call is picked up. This is the best feature if your goal is to improve the productivity of the agent. You can make them focus on more important tasks than manually dialing hundreds of numbers.


The importance of data in this modern world cannot be stressed enough. Most cloud telephony systems today come with a powerful analytics engine that generates real-time data about calls. This data can be used by you to make informed decisions and course-correct if necessary. Some platforms even send regular reports for you to stay updated with your call performances. 

Call recording

Call recording has become a mandatory feature in most cloud telephony systems today. It helps predominantly in training new recruits and also to see what went wrong during a call. Apart from that, it serves as an excellent alternative for note-taking. Your agents can concentrate on the call and forget about taking notes. 

Call forwarding

This is another handy feature offered by several cloud telephony platforms. In this, a call is automatically transferred to another agent. There are two kinds of call forwarding – conditional and unconditional. In the former, the calls are transferred to another agent if the first agent is unable to pick up an incoming call because he/she is away. In the latter, all calls are forwarded to another agent without any condition.

Chrome extension

This is an ideal feature to have if you wish to make calls directly from your browser. For instance, Frejun lets you dial a person directly from your Chrome browser as long as there is a number on the screen. You do not have to open multiple applications to find a number and make a call.

Call Scheduling

If you wish to automate all your business calls, your cloud telephony solution must certainly offer this feature. With this feature, you can schedule calls and automatically connect a customer at the scheduled time. For instance, you can select the date and time for the interview with a candidate or allow them to choose an interview slot according to your availability. 

Key questions to ask your cloud telephony provider

Once you have finalized a list of cloud telephony providers, the next step is to ask some key questions to them during the discovery call. Here are some of the must-ask questions to them – 

  • What support do you provide during setup(though it is not required)?
  • How frequently do you run maintenance checks on your servers?
  • How many data centers do you have? Do you have backup centers in case of any outages?
  • What is the cost of the software? 
  • Are there any hidden costs (maintenance, licensing, or upgrade costs)?
  • Do you have any plug-n-play integrations? 
  • Do you offer any API integration with our CRM, ATS, Lead management software, etc.?
  • Do you have a trial plan? How long is it? What features can I test during the trial period?
  • What will happen once my trial plan is over?
  • How many calls can I make in a month?
  • How does the billing work?
  • What kind of reports can I generate on your platform?

Once you get answers to all these questions, make an informed decision about the best cloud telephony provider that exactly matches your needs and budget.

Winding Up

Cloud technology has become an important part of most organizations’ digital transformation process. These systems are also making employees’ and customers’ lives easier, which enables businesses to scale out with minimal investments. But it is extremely important to choose the right cloud telephony system as the wrong choice can turn counter-productive to your needs. 

Frejun is the #1 cloud telephony system in India that automates your whole calling process by logging your business calls and providing valuable insights about them in a single click. Begin your journey with us by signing up for a free trial. 

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