What Is Cloud Telephony & How Does It Work?

April 22, 2022


As technical innovations continue to evolve, the arrival of the "cloud" in the communication sector has been hailed as a revolutionary step forward. Cloud telephony relieves enterprises of the responsibility of deploying and maintaining the infrastructure onsite and also reduces operating expenses. Using cloud telephony services, the telephonic infrastructure is now set up by the cloud service provider, who is also in charge of maintaining and upgrading the system.

The use of cloud telephony makes it easier for businesses to communicate with one another. Companies can save a significant amount of money on company costs by utilizing cloud-based telephony. By transferring telephone infrastructure to the cloud, it eliminates the need for any complicated physical infrastructure setup. It is not necessary to acquire and install a telephone network on the company’s premises to use it. Access to the internet is all that is required for the telephony infrastructure to function properly. When telephony hardware is relocated to the cloud, the process of installing and maintaining it becomes simpler. Additionally, the shift increases the overall efficiency of businesses. 

What is Cloud Telephony?

The phrase "cloud telephony" refers to a technology that allows service providers to host communication equipment on their premises and make them available to their clients over the internet. A web-based interface is also available for clients to access the cloud-based system. Cloud telephony makes the process of automating a corporate phone system much simpler than it used to be. Business calls are handled automatically, removing the need for a receptionist to answer the phone. Putting automation in place as soon as possible provides you a competitive advantage and enables you to achieve larger benefits in the long run.

Businesses may access and scale their operations whenever they need to by utilizing cloud telephony services. It allows for the management of all corporate communications, even from a remote place, and it saves a significant amount of money on staffing expenditures. The integration of telecommunications systems with customer relationship management systems (CRMs) and other third-party applications increases overall productivity. A cloud telephony service can also be utilized by business executives to communicate with consumers and potential leads on an immediate basis, according to the company. Dashboards make it simple to track the efficiency of agents and the effectiveness of communication operations. Activated agents, on-hold calls, and live calls are all displayed in real-time on dashboards.

In contrast to traditional PBX systems, Virtual EPABX can be implemented with zero infrastructure and zero capital cost. It can be used to answer business calls 24 hours a day, 7 days a week. All customer calls will be answered regardless of the time zone from which they call. During after-hours, callers will be directed to the agent assigned to take their calls during that specific timeframe. Voicemail will take the caller's message on the agent's behalf if the agent is unavailable to take the call.

Several business numbers are added to a single number as a Virtual Number. On a business number, the caller is able to select the location, the language, and other specific requirements. It will connect them to an agent that works in that particular location or speaks the language they choose.

Business calls are routed to the appropriate departments or agents using an IVR, which functions as a virtual receptionist. Furthermore, call volume doesn't impact the efficiency of the system. Therefore, cloud telephony offers the best customer experience even at peak times.

How Does Cloud Telephony Work?

A cloud-based phone system functions the same way as a traditional telephone system except that the service provider's network is accessible through the cloud, whereas the latter is located on-site.

A customer's call is directed to the cloud-hosted public branch exchange (PBX) once they dial a number. A primary rate interface (PRI) line is used to connect the server to the user's computer (a PRI line is an ISDN telecommunications standard used to transmit voice, video, data, and other network services).

Hosting a PBX (provided by a service provider) stores all information and phone numbers necessary to determine routing structures during incoming calls. Every extension of the company's phones is connected to the hosted PBX, so every call landing on this system is matched with the most appropriate agent based on the set priorities.

In some cases, the PBX can prevent certain calls from going through, if the service provider or customer explicitly requests it. After the server determines the most appropriate agent for a request, a phone call is immediately initiated between the customer and that agent. As all the agents are connected to the same hosted PBX, call transfers between the agents are comparatively faster.

Call routing is entirely handled by the cloud, which allows web browsers and mobile applications to access complete phone systems. A business executive can assign numbers to team members, forward calls, and use the various calling features modern VoIP providers offer from the online dashboard. Business phone systems will be taken care of by cloud telephony providers. Furthermore, they offer detailed analytics and reports which are quite useful for business.

Thus, cloud telephony relieves the user of the burden of maintaining their own PBX or PABX. Business phone systems are run on servers that are built and operated by VoIP service providers. It doesn't matter if you host two phone numbers on the same cell phone or enjoy reliable internal messaging - you can receive calls anywhere using your cloud telephony system.


Cloud telephony services have grown in popularity among small businesses in recent years, and many are willing to invest in the technology even at an early stage of their business's development. This is due, among other things, to their demand for services like Intelligent Voice Recognition (IVR), unlimited minutes, and call recording. As a result, do not delay selecting the best choice for your business any longer. However, prior to making a final selection, thoroughly analyze each and every choice offered on the market, and plan accordingly.