Today’s telephony solutions go far beyond basic phone calls: They need to support virtual meetings, enable team collaboration through shared workspaces, and integrate with customer relationship management (CRM) systems.
That’s why 80% of organizations are using or plan to use unified communications and collaboration tools, such as hosted phone systems, to support remote work and multi-location operations. According to Global Market Insights, the hosted IP PBX segment is expected to become the fastest-growing area of the VoIP market. It is predicted to grow by 15% from 2019 to 2025.
These cloud-based systems offer global reach, scalability, advanced call management, and seamless CRM integrations. They enhance internal and external interactions and also streamline operations in ways that traditional hardware systems simply can’t match.
The fact is, if your team includes remote employees or operates across multiple locations, your old phone system might be holding you back.
If you’re thinking about making the switch, keep reading to discover how hosted phone systems can transform your communication strategy.
Key takeaways:
- Hosted phone systems offer advanced features such as WhatsApp messaging, texting, and CRM integrations, enhancing communication flexibility and scalability.
- These systems are perfect for businesses with remote employees or multiple locations, ensuring consistent communication and seamless collaboration across devices.
- A hosted phone system lets you make and receive calls over the internet using VoIP, removing the need for physical hardware and providing flexibility while saving costs.
- CloudTalk provides robust features like a Real-Time Dashboard and call center Analytics backed by competitive pricing and 24/7 support. This makes it a top choice for sales and customer service teams prioritizing customer experiences.
Tired of dealing with unreliable communications solutions with limited capabilities?
What Is a Hosted Phone System?
A hosted phone system is a solution that lets you make and receive calls over the internet rather than traditional phone lines. There’s no need for all the physical equipment (cables, servers, etc.) in your office, as everything is hosted in the cloud.
Imagine that instead of relying on clunky old phone lines, you’re making calls over the internet. Welcome to the world of hosted phone systems! Also known as Cloud PBX, Virtual PBX, or Hosted PBX, these systems use VoIP (Voice Over Internet Protocol) technology to handle your calls—without the hassle of physical phone lines.
This phone system can be beneficial for your business if you’re looking to reduce infrastructure and maintenance costs since you don’t need to install or manage physical equipment.
It could be an interesting option for you if you work with a remote team, as it allows you to make and receive calls from anywhere with internet access.
In simpler terms, a hosted phone system lets you enjoy the benefits of modern technology—like flexibility and scalability—without having to manage or maintain physical equipment. It’s all handled remotely by the provider, letting you focus on what really matters: Your customers.
How Does a Hosted Phone System Work?
A hosted phone system uses Voice over Internet Protocol (VoIP) to make and receive calls over the Internet instead of using physical cables.
In summary, when you speak, your voice is converted into data that travels through the network. Then, that data reaches the other end, where it is converted back into sound, and the other person hears you.
Here are the steps a hosted phone system follows to make and send a call:
- When you place a call, your voice is converted into small packets of digital data.
- These data packets are sent through the internet connection to the providers’ servers.
- The provider’s system organizes the data and sends it to its destination, which can be another extension (within the same company) or an external number.
- Once the data reaches the receiver, the packets are reassembled into sound, allowing the other person to hear your voice.
These elements are essential for the system to work properly:
- A stable internet connection: This is the channel through which the calls will be transmitted.
- Devices with a speaker and microphone: These can be phones, computers, or even your mobile device.
- A VoIP (Voice over Internet Protocol) provider: They are responsible for managing the entire cloud system.
Key Benefits of Hosted Phone Systems
A hosted telephone system is like working with Watson if you are Sherlock Holmes: it always has your back, takes calls, and ensures you don’t miss any important details.
Meanwhile, you and your agents can focus on solving the most important cases while everything is under control.
Let’s take a closer look at each of its benefits:
1. Reduce Costs
Hosted phone systems can cut monthly phone expenses by up to 70%.
One of the main reasons is saving on hardware and installation costs. You can set up the system on your existing devices, such as computers, mobile phones, or tablets.
All you need is an internet connection and the necessary app. This eliminates the need for investing in new hardware and complex installation processes, allowing you to save money and simplify the setup.
You only pay for what you need. The service is typically charged based on the number of users, and many providers offer the flexibility to add or reduce seats as needed. This ensures that you are only paying for the resources you use, helping you to manage costs more efficiently.
2. Gain Flexibility and Mobility
If you have a remote or hybrid team, or are planning the transition, a hosted phone system is ideal. Since all you need is an internet connection, you and your team are not limited to working from the office.
In fact, you can work from anywhere: your home, a café, or even another country. It doesn’t matter if you work for an American company and are visiting Italy: your clients will see an American number on the screen.
3. Scale Easily
As mentioned earlier, you can add or remove seats without hassle, adapting to your business needs. With just a few clicks, you can add or delete a seat.
Moreover, as you grow, you can upgrade to a more advanced plan that offers sophisticated features. For example, the Smart Dialer allows you to automatically import numbers from any website, CRM, or HelpDesk tool.
4. Keep All Your Data Together
With a hosted phone system, you can connect your favorite tools and CRMs (such as Salesforce or HubSpot) to the system and have all your data in one place.
Therefore, there’s no need to jump from one app to another. Imagine how much time and energy you can save. Additionally, it offers other features such as SMS, allowing you to send text messages and even automate them directly from the platform.
5. Ensure Security and Reliability
Hosted systems typically include robust security measures. For example, CloudTalk uses end-to-end encryption, ensuring that only the sender and receiver can access the content of calls and messages. Moreover, our security team monitors the platform 24/7 to detect and prevent any potential threats or breaches.
Types of Hosted Phone Systems
According to Salesforce’s State of the Connected Customer report, the telephone is still the preferred means of communication for 59% of customers. Even as other channels like online chat, mobile apps, and social media gain traction, especially among younger audiences, the phone is still holding its own.
While the popularity of the telephone endures, businesses are increasingly recognizing the limitations of traditional phone systems. Hosted phone systems offer modern features and flexibility old technology simply can’t compete with, making them a no-brainer for companies seeking to maintain effective communication across multiple locations or remote teams.
With an array of hosted phone systems to choose from, finding the best fit for your business can be overwhelming.
Below, we explore the various types of hosted phone systems, highlighting their features, benefits, and potential drawbacks to help you make an informed decision.
- Cloud PBX (Private Branch Exchange): The virtual version of an on-premises PBX system. It allows you to manage incoming and outgoing calls, including advanced features like call routing, voicemail, and conferencing. The main difference is that the service provider hosts and maintains the infrastructure in the cloud.
- Hosted VoIP: Service where voice communication is transmitted over the internet rather than traditional phone lines. It’s a scalable solution that can be customized to meet the specific needs of businesses, offering features like call forwarding, automated attendants, and mobile integration.
- Unified Communications as a Service (UCaaS): UCaaS combines VoIP with other communication tools such as video conferencing, instant messaging, and email. It provides an integrated platform that supports seamless communication and collaboration across different devices and locations, often bundled into a single service.
- SIP Trunking: Session Initiation Protocol Trunking allows businesses to use their existing PBX system while connecting it to the internet for voice services. The service provider hosts the SIP trunk, which connects the PBX to the Public Switched Telephone Network (PSTN), offering the flexibility of VoIP without needing a complete overhaul of the telephony infrastructure.
- Hosted Contact Center: A hosted contact center is a communication solution where all hardware and software are managed off-site by a third-party provider, usually in the cloud. It’s designed specifically for customer support and call centers. It includes advanced features like Call Center Automation, Customer Relationship Management (CRM) integration, Call Monitoring, and Analytics.
- Virtual Phone Systems: Basic type of hosted phone system that routes calls to different numbers, including landlines, mobile phones, or VoIP services. It’s often used by small businesses and entrepreneurs as a cost-effective way to manage calls without needing a physical office setup.
Each of these hosted phone systems offers varying levels of complexity, customization, and features, making them suitable for different types of businesses depending on their communication needs.
Hosted Phone System vs. SIP Trunking
First, let’s take a brief look at the meanings of a hosted phone system and SIP trunking:
Hosted Phone System (Hosted PBX): It works over the Internet without the need to install physical equipment in the office. The provider hosts the entire system on external servers, so calls are managed in the cloud. Therefore, you only need an internet connection to install the application on your devices. This system is ideal for businesses seeking flexibility and who don’t want to deal with technical management.
SIP Trunking: This technology connects a local phone system (PBX) to the public telephone network via the Internet. Unlike traditional phone lines, SIP trunks transmit calls over the internet, allowing businesses to use their existing infrastructure (such as a PBX) while saving on physical line costs. It’s a solution for companies that already have an on-premise PBX and want to upgrade to IP technology without replacing it.
Who Benefits From a Hosted Phone System?
So, who stands to gain the most from a hosted phone system? Let’s break it down:
- Sales teams and customer service agents: For teams focused on customer interaction, a hosted phone system provides a unified ecosystem that integrates seamlessly with CRM platforms. This helps elevate the customer experience by ensuring consistent, efficient communication.
- Remote teams: If your team is spread out across various locations, a hosted phone system is a game-changer. Features like Call Transfer and Call Queuing ensure you never miss an important call, no matter where you are.
- Small businesses and startups: For small businesses and startups, hosted phone systems offer a budget-friendly and scalable solution. Forget about the hefty costs of traditional phone systems—no need for expensive hardware or complicated installations.
In short, whether you’re in charge of a remote team, running a startup, or managing a customer service team, a hosted phone system could be the perfect fit for your needs.
6 Features to Look For In a Hosted Phone System
When choosing a hosted phone system, it’s easy to get dazzled by all the shiny extras and advanced options. However, to ensure you pick a system that’s truly effective, you need to focus on key features that guarantee usability, security, and overall functionality.
Let’s dive into what you should be looking for to make the most out of your investment.
1. Security and Reliability
When considering a hosted phone system, security and reliability are top priorities. Here’s what you need to know:
- Reliability Matters: Many businesses worry about the reliability of cloud-based phone systems. Rest assured, VoIP (Voice Over Internet Protocol) connections can be as secure—if not more so—than traditional phone lines. The key is choosing a reputable VoIP provider with strong uptime guarantees.
- Security features: Look for providers that offer robust security features like voice encryption (e.g., TLS and SRTP) and regular security checks. These measures help protect your conversations from being intercepted or hacked.
- Understanding uptime: Uptime refers to the percentage of time your service is up and running. For example, an uptime of 99% means the service is operational 99% of the time, but that still allows for about 3.65 days of downtime annually. On the other hand, 99.999% uptime (or “four nines”) translates to just 52.60 minutes of downtime per year. Providers usually list their uptime guarantees on their websites or in their Service Level Agreements (SLAs).
In essence, while no system can guarantee 100% uptime, choosing a provider with high uptime percentages and strong security practices will help ensure your hosted phone system is dependable and secure.
To estimate the real-world impact of these percentages, an SLA uptime calculator can help you convert uptime guarantees into tangible downtime metrics.
2. Call Management
Effective call management is the cornerstone of a smooth-running hosted phone system. Look for features like Call Forwarding and Routing, Auto-Attendant, and Call Queuing to ensure your calls are handled efficiently.
- Call Forwarding and Routing: This feature ensures no call goes unanswered, directing it to the appropriate department or individual. Whether it’s forwarding calls to a mobile device when you’re out of the office or routing them to specific teams based on customer needs, this function keeps communication flowing seamlessly.
- Auto-Attendant: Imagine having a virtual receptionist who answers and directs calls around the clock. An auto-attendant greets callers with a professional message and provides them with menu options to route their calls correctly, reducing wait times and improving customer satisfaction.
- Call Queuing: No one likes being kept on hold, but call queuing helps manage high call volumes by placing callers in line and notifying them of their estimated wait time. This makes sure each call is handled in order and improves overall efficiency.
3. Artificial Intelligence
Artificial Intelligence (AI) is transforming how hosted phone systems operate, making them smarter and more intuitive.
- Sentiment Analysis: AI can analyze the tone and sentiment of customer conversations, providing valuable insights into how customers feel about your service. Sentiment Analysis helps you gauge customer satisfaction and identify areas for improvement.
- Talk/Listen Ratio: This feature tracks how much time is spent talking versus listening during calls. Talk/Listen Ratio helps you evaluate interactions, ensuring that conversations are balanced and that customers are given ample opportunity to express their needs.
4. Unified Features
A unified communication platform integrates multiple tools into one cohesive system, streamlining your interactions both internally and externally.
- Integrations with other tools: Look for systems that integrate seamlessly with your existing tools, such as CRM software, email platforms, and project management apps. This creates a unified ecosystem where all your communication and data are interconnected.
- Unified communication: With one source of truth, you can manage all your communication channels—calls, SMS, emails, and video conferencing—from a single tool. A wide array of integrations enhances collaboration across teams, making it easier to coordinate efforts and share information.
5. Mobility and Remote Work Support
Hosted phone systems with intuitive mobility features support remote work, making sure your team stays connected no matter where they are.
- Mobile apps: Access your phone system from anywhere with a mobile app, enabling calls, texts, and other communication functions on the go. This flexibility lets your team stay fully engaged and maintain productivity.
- Web interfaces: Manage your calls and communication through web interfaces, providing a seamless experience for remote teams. This makes sure everyone, whether in the office or working from home, has the same level of access and functionality.
6. Advanced Call Features
To get the most out of your hosted phone system, look for advanced call features that enhance monitoring, recording, and analytics.
- Call Monitoring: Stay on top of your team’s performance with Call Center Monitoring. View live calls, listen in, or join conversations to assess agent interactions, provide training, and gather customer insights.
- Call Recording: Capture every customer conversation with call recording. This feature lets you store and review calls, track performance via a Real-Time Dashboard, and gather valuable feedback to refine your customer service strategy.
- Analytics and Reporting: Gain a comprehensive view of call center metrics with analytics and reporting. Track key metrics, monitor agent performance, analyze customer behavior to make data-driven decisions, and improve call center performance.
Potential Downsides of Using a Hosted Phone System
Despite the attractive advantages, hosted phone systems come with some drawbacks:
1. Depend on a Stable Internet Connection
No internet means no business. You need a stable internet connection for the system to work well. Without it, you might face issues like dropped calls, echoes, or delays.
To avoid these issues, choose a high-quality internet provider and set up Quality of Service (QoS) on your router to give calls priority over other data. This will improve call quality.
2. You May Experience Interruptions
Since hosted systems rely on the company’s internal network and the provider’s infrastructure, any outage or maintenance can lead to service disruptions.
However, trusted providers take measures to prevent interruptions and service outages. At CloudTalk, we use multiple data centers and backup network routes to keep our service running smoothly.
3. Reduce Control Over the System
The service provider manages hosted phone systems remotely, which can be an issue if you want more direct control over your communications.
However, reliable providers offer accessible management tools, such as control panels where you can perform key tasks. For instance, at CloudTalk, administrators can add or remove users without the need for technical support.
Key Considerations Before Switching to a Hosted Phone System
Before diving into a hosted phone system, it’s crucial to consider a few key factors to ensure a smooth transition:
- Business needs: Take a close look at your communication requirements. Consider factors like call volume, the need for remote access, and advanced features. Determine if a hosted phone system aligns with your business goals and growth plans.
- Internet reliability: Your hosted phone system depends heavily on your internet connection. Ensure you have a stable and high-speed internet connection to avoid call quality issues and downtime.
- Security concerns: With sensitive data flowing through your phone system, security is paramount. Look into how the provider safeguards your information and what measures are in place to prevent breaches. For example, secure providers like CloudTalk offer end-to-end protection of your customers’ data and regulatory compliance (i.e. Single Sign On (SSO), STIR/SHAKEN, and spam protection).
- Integration with existing systems: Make sure the hosted phone system integrates smoothly with your current call center analytics software and hardware. Compatibility with tools like CRM systems, email platforms, and other business applications is key to maximizing efficiency.
- Vendor reliability: Choose a provider with a solid reputation and reliable customer support. Check reviews, ask for references, and ensure the vendor offers responsive support and a clear service level agreement (SLA).
Top 5 Hosted Phone Systems
Choosing the right hosted phone system can transform your business communication, offering everything from advanced call management to seamless team collaboration.
To help you find the best fit, we’ve compiled a list of the top five hosted phone systems along with their unique features, integrations, and pricing.
Cloudtalk
Call center AI-powered analytics and features, VoIP, CRM integration
CRM, Helpdesk software, Slack
$25/month
24/7 support
Nextiva
VoIP, team messaging, video conferencing
CRM, Email, Microsoft Office
$18/month
24/7 support
RingCentral
VoIP, video meetings, team messaging
CRM, Microsoft Office, Google Workspace
$19.99/month
24/7 support
Dialpad
VoIP, AI-powered analytics, team messaging
CRM, Google Workspace, Office 365
$15/month
24/7 support
Vonage
VoIP, call center solutions, team messaging
CRM, Microsoft Office, Google Workspace
$19.99/month
24/7 support
Elevate Your Business with the Right Hosted Phone System
A reliable and feature-rich hosted phone system is more than just a communication tool—it’s a strategic asset.
By taking the time to understand the unique needs of your organization, and comparing them with the features offered by top providers, you can make an informed product decision, like partnering with CloudTalk to enhance customer interactions and improve call center performance.
A hosted phone system is a great choice if you want more flexibility, cost savings, and better communication. With features like virtual voicemail, CRM integration, and mobile apps, it makes managing calls easier for both remote and office teams. It’s scalable, secure, and ensures smooth communication.
Looking for a top-quality hosted phone system? Try CloudTalk. It’s easy to use, scalable, and offers advanced features like AI tools and 160+ international numbers—all at an affordable price. Simplify your communication with CloudTalk today!
CloudTalk offers a comprehensive suite of features like Interactive Voice Response and Talk/Listen Ratio, VoIP capabilities, and CRM integrations. 24/7 support also ensures you get help whenever you need it. In addition, its competitive pricing makes it a tough choice to beat.
Whether you’re looking to support remote teams, improve call management, or integrate with existing systems, the right hosted phone system will set your business up for success and keep you ahead of the competition.
Struggling with inefficient communication? See how can Cloudtalk help your business.
