How is Cloud Telephony different from VoIP?

Cloud telephony and VoIP are often confused with being the same, but these are two different technologies. Both are types of communications technology but differ in the way they operate and what they provide. This post will explain to you what each one is and the differences between the two. 

Table of contents

1. What is VoIP?
2. What is a cloud telephony system?
3. Difference between cloud telephony and VoIP?

What is VoIP?

VoIP or Voice over Internet Protocol is a technology that uses the Internet to make phone calls. A VoIP phone system requires a switch to be installed at your office. All the devices are then connected to that switch and the calls get routed through the company’s broadband connection. As a result, you can make several calls using this system without requiring multiple telephone lines, saving the business money.

Earlier, the businesses used traditional landline phones or PSTN (Public Switched Telephone Network) to make and answer business calls. However, each telephone line could route only one call at a time. So, if they wanted to make multiple calls simultaneously, they needed multiple phone lines. The VoIP phone system saves the business from such hassles.

What is a cloud telephony system?

A cloud phone system works through a VoIP service provider. Therefore, it does not require complex physical PBX hardware on-site to manage the business calls. Instead, the calls are routed through remote servers hosted on the service provider’s premise who takes care of all the implementation. Thus, eliminating the upkeep and maintenance cost of PBX (Private Branch Exchange). 

A cloud-based solution is entirely virtual and includes several features like call analytics, click-to-call, auto-dial, and many more. Any device with a stable broadband connection, like a laptop, smartphone, tablet, etc., can become a cloud phone. 

Difference between Cloud Telephony and VoIP

Cloud telephony is a communications system that manages all the phone calls, and VoIP is the connection through which calls are transmitted. Cloud-based phones cannot work without VoIP technology.  Following are the differences between the two:

Hardware

A cloud-based phone system does not require any physical hardware other than the phones the system is running on. In contrast, a VoIP phone system requires hardware installation on the office premises.

Scalability

A cloud-based phone system provides easy scalability. It is very simple to add new users and expand the phone system along with the business. Whereas in a VoIP system, the installed hardware may only manage a specific number of devices. 

Thus, the business will have to install another hardware to handle extra devices if it expands. This is not the case with cloud telephony, as it can be easily updated to accommodate numerous devices.

Repair and maintenance costs

A VoIP system’s hardware is hosted on-site. Any technical disaster or power cuts will lead to increased downtime hence disrupting the services. Moreover, you will have to incur repair and maintenance costs. 

On the other hand, a cloud-based phone system is hosted on the service provider’s premises who takes care of all the technical issues and resolves them without the business worrying.

Remote working

Cloud telephony allows its users to plug in their mobile phones to the system to make calls. It makes working easier for remote employees. They can make and receive calls from any remote location using their mobile phones. 

The VoIP phone system does not provide this flexibility and mobility to its users. It only works on the devices within the office premises that are connected to the hardware system or the switch. 

Data storage

In cloud telephony, all business information gets saved on the cloud so no data gets lost in any disaster and can be easily recovered. You can access this information from anywhere through an online dashboard. Whereas in VoIP system, the call data gets saved on the internal data centers. 

Cost

Even though both cloud telephony and VoIP are affordable alternatives to PSTN networks, the former is considered to be even cheaper than VoIP when it comes to installation and maintenance.

Cloud-based phones and VoIP work together to streamline your business communication process. You can benefit from both technologies by moving your business to cloud by paying an affordable subscription amount. So, carefully choose a service provider based on your business communication needs. 

Summary of differences

Parameter	Cloud Telephony	VoIP Calling
Hardware	No physical hardware is required. Just phones are sufficient.	Sometimes it might need physical hardware installation at the office premises.
Scalability	Offers easy scalability. Extremely simple to add new users.	Limited scalability is offered in some instances. Installed hardware only supports a fixed number of devices.
Maintenance	It 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 Working	Completely 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 Storage	Every 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.
Cost	Cloud telephony is comparatively cheaper to set up and manage.	As compared to cloud telephony, VoIP is a pricier option.

FreJun‘s cloud telephony system provides several features to automate your communication process. You can try FreJun for 7 days for free and see if it’s the right fit for your business.