Ever since it was invented, the telephone has been an essential tool for communication, particularly in business. Despite the many other ways to communicate available today – text messages, emails, etc. – phone calls remain the quickest and most personal way to converse with someone, short of talking face-to-face. This is because, unlike text-based communication, your tone is conveyed over the phone. This adds nuance and layers of understanding to your conversations, something we’re pretty good at picking up on.

That is why phone calls are so common and so essential, and why you should be using advanced technology for your business’ phone systems. Implementing a cloud-based phone system can positively affect your business for years to come.

What is a Cloud-Based Phone Service?

Also known as Internet-based phone system, Internet telephony, or VoIP (Voice over Internet Protocol), a cloud-based phone service is a phone system that runs through the Internet instead of on traditional telephone lines.

Cloud-based phone services use a group of phones that work together to route all calls through an Internet connection. It doesn’t rely on on-premise hardware, which means that your business can avoid the costly maintenance and infrastructure that is needed for a traditional telephone line system. With a cloud-based phone service, you only need a broadband Internet connection so you can begin making calls for your businesses.

Cloud-based phone services work by transferring voice signals between two IP addresses. Here is a step-by-step guide on how it works:

  1. Voice signals are transformed into pieces of data that are tiny enough to transmit, with vocal samples being broken down into voice “packets.”
  2. These packets travel through the Internet to the VoIP provider and are then sent to the receiver.
  3. The VoIP provider uses the cloud-based Private Branch Exchange (PBX) to route the call.
  4. From there, call data can be sent to any VoIP phone or landline.
  5. When the data reaches its destination, it converts back into voice signals.

The History of Cloud-Based Phone Services

The telephone, the Internet, and Internet Protocol (IP) – without these three inventions, cloud-based phone systems wouldn’t exist today.

Invented in the 1870s, the telephone relayed calls with the help of an operator and a switchboard. The digital switching of calls began in the 1900s when AT&T created touch-tone buttons. This eliminated the need for a human operator.

In the mid-1960s, the Advanced Research Projects Agency Network developed the very first version of the Internet. It was used mainly for communications between the U.S. Department of Defense and the U.S. Military. It was only brought to public use in the 1980s when the Personal Computer (PC) became more popular. With these computers, people connected to the early Internet via telephone lines.

IP, which defines how information travels between two computers, was invented in 1972. Then, in 1989, the Hypertext Transfer Protocol and the Universal Resource Locator were invented. These inventions became the foundations of the Internet as we know it today.

Cloud-based phone systems or VoIP began in 1995 with a company called VocalTec, who pioneered what they called the InternetPhone. This was the first widely available Internet phone software. It allowed one Internet user to contact another and communication could be had through speakers and a microphone. It was developed to save money on long-distance and international phone charges.

By 1996, Internet voicemail applications were created. In 1998, VocalTec went on to develop telephone-to-telephone and computer-to-telephone calling capacities for VoIP. Initially, the adoption of cloud-based phone systems was low, this was mostly because users had to listen to advertisements before, during, and after their calls.

The 1990s was a decade when telephone equipment manufacturers and telecommunication specialists started to utilize the new technology to their advantage. They began adding IP capabilities to their switches. Eventually, they developed software that allowed users to attach a VoIP adaptor to their phones.

VoIP took off in the early 2000s. During this decade, three separate companies introduced VoIP switching software as add-ons for their routing equipment. Due to this accessibility, the number of VoIP calls skyrocketed to 25% of all voice calls. Call quality also improved with the availability of broadband Ethernet.

In 2004, several companies that were full-service VoIP providers began to spring up. For a flat rate, they provided unlimited domestic calling services and free calling for those who were using the same VoIP provider. At this time, companies started taking full advantage of VoIP calling capabilities by creating unified communications bases.

Today, the future of cloud-based phone systems is bright. It has become an integral part of many people’s daily lives since they simplify many processes and offer a great degree of flexibility. There are sure to be further technological developments in the near future that will make cloud-based phone systems even more convenient, probably even indispensable.

Cloud-Based Phone Service Performance Metrics


In general, calls that run across cloud-based phone systems produce high-quality calling experiences. However, there are still some factors that can impact the quality of these calls.


Often caused by electromagnetic interference, jitter is the interruption in digital signal traffic flow. It can cause audio clicking, monitor flickering, and data loss.


Latency is the time delay of a packet of data reaching its destination. The amount of latency affects the usability of communication devices or interfaces. It is also the wait time for signals to travel across devices that are spread out geographically.

Packet Loss

Packet loss happens when transmitted packets fail to arrive at their destination. Data errors, jitter, and data corruption are its effects. Packet loss can be caused by system noise, inadequate signal strength at the destination, software corruption, hardware failure, or overburdened network nodes.


This score is used in relation to voice testing processes, which range from 1 (worst) to 100 (best). It is based on the percentage of users who are happy with the quality of a test voice signal after it passed through a transmitter to a receiver.

Mean Opinion Score

The Mean Opinion Score measures the call’s quality, with scores ranging from 1 (unacceptable) to 5 (excellent). More often than not, VoIP calls are in the 3.5 to 4.2 range.

These areas of performance must be monitored so that the highest level of call quality is ensured and the number of dropped or interrupted calls is reduced.

Cloud-Based Phone Services vs. Landline

There are a lot of factors to consider when deciding the merits of a landline phone service versus a cloud-based one, especially for a business. Business phone services introduce a variety of needs and limitations that make weighing the differences between these two systems important.

Unlike cloud-based phone systems, which use the Internet to transmit your voice as data, traditional telephone lines rely on networks of copper wires, branch exchanges, and switches. This tried and tested system has been in place since the 1800s while the cloud-based phone system has only been in use since the 1990s.

Traditional phone systems come with call forwarding, voicemail, call conferencing, and other features. However, those come at a cost. With cloud-based phone systems, those features are immediately available. Some features, such as voicemail to text, are unique to cloud-based phone systems. You can even integrate your cloud-based phone system with many third-party tools and software. You can’t do that with a traditional phone system.

Because a VoIP’s service plan is based in the cloud, there is no need for bulky, expensive hardware. Installation is quick and just takes minutes. You only need a broadband Internet connection to start making calls, which makes the cloud-based phone system very portable. Through mobile applications, you can use your mobile phone as an extension of your office phone.

Reasons to Use Cloud-Based Phone Services

With cloud-based phone services, you don’t buy a product; you buy a service. You just reap the benefits of this phone system while someone else manages the details of how to system works. Some of the benefits are:


The first and most enticing aspect of cloud-based phone systems is that it is cost-effective. In fact, they are an inexpensive alternative to traditional telephone systems. The only additional cost in obtaining a cloud-based phone service is the Internet installation; however, if you already have one, then you will only have to pay for the setup costs and monthly payments. Most cloud systems are priced on a per-user basis, offer unlimited local and international calling, and provide free on-network calling, thus helping subsidize costs. With a cloud-based phone system, you can save your business serious money.


For businesses of any scale – from a one-person start-up to a large company with thousands of employees – reliable and efficient communication is vital. Any communications downtime and your business is likely to lose valuable time and money. With a cloud-based phone system, you don’t have to worry about service downtime. Since the components of a cloud-based phone system aren’t housed in the same location, most providers experience few disruptions. In the cloud, the software can be housed on an array of machines spread across data centers around the globe. If one server experiences problems, there are other ones that can pick up the work. This decentralized setup is called geographic redundancy and it is the reason why cloud systems have very small amounts of downtime.


A lot of businesses start out small and then begin to grow, employing hundreds, even thousands of people. With a cloud-based phone service, your phone system will grow with your business. Adding phone lines, extensions, and more features are simple and easy to do. Administrators only have to use their admin panel to configure the entire system. This is unlike traditional phone systems where you have to rewire the copper wirings or otherwise tinker with the on-premise equipment if you have to upgrade or change anything.


Security risks like phishing, intercepted calls, fraud, spoofing, and more are always threatening your phone security. While you should always be aware of these threats, a cloud-based phone system will give you and your business more security than a traditional phone system would.

Usually, traditional on-site phone equipment is kept in a storage closet, where anyone can access it. The cloud, on the other hand, utilizes many security measures such as data encryption, network security, HIPAA-compliance measures, secure voice and video, and so much more. These measures keep users and their data safe.


With a cloud-based phone system, you have more freedom about how and where you work. Your employees can access the office cloud communication even in remote locations like a home office or when on-the-go during a business trip. Most providers also offer a mobile application for smartphones and tablets. These apps will come with all the cloud phone system’s capabilities and features and will allow your employees to obtain access to real-time information from whatever device they choose.

Automatic Updates

With cloud-based phone systems, you don’t have to worry about maintenance. Any new features and bug fixes are added to the software, which is hosted on the provider’s data center. These updates are then rolled out to your business as they’re released. You can focus on running your business instead of handling maintenance and getting upgrades to your phone system.

Hosted Service

Many cloud-based phone services are hosted services which house all the hardware offsite. With a hosted cloud service, all you truly need is a good quality Internet connection and working IP phones. You won’t have to maintain any equipment or deal with malfunctions since any and all maintenance is handled offsite by your service provider.

The Age of Cloud-Based Phone Systems

Cloud-based phone systems are becoming increasingly popular among businesses of all sizes and industries. It gives its users a reliable and flexible phone system that comes at a very reasonable cost.

If you think that you might benefit from a cloud-based phone system, don’t hesitate. Turn to Lingo for hosted PBX solutions. With our expansive nationwide network, we provide top-quality IP-based voice and data technologies to small-to-medium businesses and clients. Contact us today to learn more. We would love to hear from you!