Traditional Phone Systems vs. Cloud Phone Systems: Which Is Best Suited for Your Business?

January 27, 2023

Explore other posts on these topics:

Traditional phone systems or cloud phone systems? This is a common consideration for many business owners and communication managers looking to modernize their phone systems in this digital era.

To make the most suitable choice for your business, you’ll need to consider whether the phone system facilitates staff flexibility and adaptability, and what features are required to achieve consistent performance.

The increased popularity of cloud hosting for business phone systems shouldn’t come as a surprise. According to recent data, up to 96% of companies currently make use of cloud solutions for communications. This is largely due to the scalability of cloud servers and the flexibility and enhanced features the cloud offers

This guide will explore the key differences between these two communications systems to help you decide on the best one for your customers’ needs and your operational model.

What Makes Cloud Telephony Different from On-Premises Telephony?

Traditional telephony involves the on-premises installation of phone systems through the linking of all company phone extensions and their subsequent connections onto public phone networks. Advanced on-premises phone systems also incorporate VoIP services.

Cloud-based systems, on the other hand, facilitate the linkage of a brand’s network of phone extensions using the internet. Where on-premises telephony uses desk phones, cloud phone systems utilize softphones or phones/headsets configured to work with cloud systems.

Advantages of Cloud Phone Systems vs. On-Premises Phone Systems

Here are a few benefits you can expect when investing in a cloud phone system:


The most noticeable upside cloud telephony has over traditional telephony is the degree of scalability it gives businesses. It allows for easy service adjustments in accordance with seasonal and industry fluctuations.

What’s more, cloud phone systems allow for the automatic installation of updates, as opposed to traditional phone systems, which need manual upgrades that could be time-consuming and cause downtime.

No Installation Costs 

You don’t have to invest heavily in the initial installation or PBX maintenance — as is the case with on-premises systems. Cloud phone systems don’t require significant capital outlay, making them suitable for a wide range of businesses, especially start-ups and small businesses. Some cloud communications companies offer free phones/headsets that are already configured to work with their cloud system.


With cloud phone systems, your team doesn’t have to work from the office. They can work anywhere with access to good internet. Remote working offers your team more flexibility to plan out their day, making them more productive.

Quick and Easy Call Management 

Cloud phone systems come with extra features that allow your team to organize and manage business calls. Besides streamlining your processes, this allows you to easily collect data from your customer base.

Advantages of On-Premises Phone Systems vs. Cloud Phone Systems

Some businesses still prefer on-premises solutions versus their cloud-based counterparts.

Here are some of the advantages of on-premises phone systems:

Control of Communication by Management 

On-premises telephony allows for on-site controllability by communication managers and business owners, but will most likely require someone who is trained to do so. A cloud-based phone system can be easily configured and maintained by anyone and changes can be made on the spot. Also, be on the lookout for vendors who offer top-notch support.

Cheaper to Set Up (But Look for Hidden Costs)

On-premises telephony usually involves a one-time payment during installation but can cost you more in the long run with maintenance and downtime. Conversely, cloud telephony usually requires clients to pay a monthly hosting rate as well as upfront costs for the endpoints, but overall can be cheaper in the long run and many times is not tied to an annual contract.

Scale Up Your Business with Reliable Telephony Services That Offer FeatureRich Plans

For reliable, unified telephone communication systems that’ll help drive collaborative partnerships for your small or medium-sized enterprise, reach out to learn more.

Mark Sher

Mark is the Senior Vice President of Unified Communications, Product and Marketing at Intermedia.

January 27, 2023

Explore other posts on these topics: