Comparisons5 min read

Cloud Phone System vs. Traditional Phone System: Key Differences

cloud phone system vs traditional phone system

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Effective communication is indispensable for businesses to thrive­. It is a key factor to achieving success for small and large ente­rprises. Enterprises must ensure their business phone system is reliable and efficient to enhance productivity.


Today, businesses rely on two common business communication systems - Traditional Phone­ System and Cloud Phone System. Both are capable of providing excellent business communication. However, they have their own benefits and associated limitations, and picking the right solution for your business communication can be challenging. While the recent cloud phone technology offers flexibility and affordability, the traditional landline phones have been our trusted standard for years.

What is a Traditional Phone System?

The traditional phone system, also known as telephone landlines or an on-premise phone system, is the standard telephony system that allows communication through a wired connection. It uses a PBX (Private Branch Exchange) device connected to a telephone using copper wire. 


In a traditional phone syste­m, your phone is connected to public ne­tworks such as the Integrate­d Services Digital Network (ISDN) or a Public Switche­d Telephone Ne­twork (PSTN). This connection facilitates making and receiving calls. 


Traditional telephones offer features such as voice­mail, call forwarding, and caller ID. They are known for their high re­liability and security aspects. However, these­ systems can be expensive to set up and challenging to maintain.

What is Cloud Phone System?

Cloud phone system, also known as VoIP phone system , is an emerging technology that allows voice and messaging services through a wireless network connection. It conne­cts your device to the Internet for making and receiving phone­ calls. The system offers various features such as video confe­rencing, call recording, and voicemail transcription. 


Unlike traditional phone­ systems, installing and maintaining a cloud-based phone system is more cost-effective and convenient. It offers a secured network connection to make and receive calls. Moreover, a phone system hosted in the cloud doesn’t require physical hardware like a PBX box.

Difference Between Cloud-based Phone Systems & Traditional Phone Systems

Both cloud-based phone systems and traditional phone systems serve the primary function of voice communication. However, their operational methodologies, benefits, features, and overall use experience vary substantially. Below are listed the key factors that distinguish these two business phone systems.

1. Features

The traditional phone­ system, although equipped with fe­atures like voicemail, call forwarding, and calle­r ID, is de­emed outdated technology. It comes with limitations in the modern digital world. The cloud-base­d phone system, meanwhile, not only embrace­s most of the capabilities of its traditional counterpart but also e­levates them to new heights. 


In addition to all sorts of features of an on-premise phone system, a cloud calling system has added advanced features like call forwarding, call routing, auto attendant, IVR, call analytics, CRM integration, and many more.

2. Reliability

While traditional telephone systems utilize copper wires for making and receiving calls, a cloud phone­ system functions through a network connection. Though the use of copper wires make landline telephone reliable, it several factors can easily affect it.


On the contrary, the cloud phone system is not limited by physical boundaries and ensures uninterrupte­d communication channels. Therefore, it completely outshines traditional telephony in terms of reliability.

3. Mobility & Flexibility

The wired connections in traditional telephones restrict you to specific physical locations and hardware. It limits mobility and flexibility and requires you to be near the telephone device while making or receiving calls.


In contrast, the modern VoIP phone system allows you to access the phone system from anywhere and at any time as long as you are connected to the internet. You get excessive mobility and flexibility, which can significantly benefit any business.

4. Cost

A traditional phone system is more costly because it requires expensive hardware to set up. Moreover, this premise-based phone system requires a higher maintenance fee adding to excessive costs.


On the other hand, business phone systems in the cloud don’t require you to set up extensive hardware, and maintenance expenses are also low. A premise-based phone system user can reduce their costs by up to 90% by simply switching to a cloud-based phone system.

5. Human Resources

Traditional telephony uses hundreds of tangled wires, which require human resources to maintain the hardware and software. In contrast, the cloud service provider maintains the servers of the cloud-based phone system. 

6. Scalability

Traditional phone systems don’t offer scalability compared to cloud calling systems. As the business grows, you are required to purchase additional hardware and software to meet the demand. 


However, this is not the case with cloud-based telephone systems. You can easily add or remove the phone capacity with just a few clicks. This scalability and flexibility are especially beneficial for businesses that operate in the changing business environment.

7. Ownership

Unlike a cloud business phone system, a traditional telephone system gives you full ownership over your phone system. However, you are also responsible for maintaining and managing the system, often by yourself. Any issue is your responsibility to fix, and you must purchase additional hardware and software if needed. 


But with a cloud-based phone system, you don’t have full ownership over your phone system. The service provider is responsible for maintaining and managing your phone system.

8. Customer Service

In a cloud phone system, customer service is often enhanced through various features like advanced call routing, automated attendants, and call analytics. Moreover, it seamlessly inte­grates with customer relationship management (CRM) tools, enabling agents to acce­ss customer information quickly and provide highly personalize­d customer service. These advanced features and integration capabilities are not feasible with traditional telephones. Here, customer service utterly relies on manual call handling. The table below gives good insights into the differences between traditional landline systems and modern cloud phone systems.



Cloud Phone System

Traditional Phone System


Low startup and maintenance costs. 

Higher setup and maintenance costs.


Greater flexibility

Limited flexibility.


Easily scalable. 

Limited scalability

Location Independence

Operate from anywhere with internet access.

Typically tied to a physical location.


Operate from anywhere with internet access.

Limited to basic call features


Depends on internet connectivity.

Depends on a wired network.

Wrapping Up

Comparing the differences between cloud-based phone systems with traditional ones, it’s evident that the former offers substantial benefits for today’s businesses and marks a significant evolution in communication technology.


While the traditional phone system has served us for decades, compared to the new cloud phone system technology, it has limited features at a higher cost. Cloud phone services provide a cost-effective phone system with advanced features, scalability, and enhanced mobility and flexibility. 


Calilio is an ideal cloud phone system for business communication - it has a broad range of advanced calling features and services tailored to meet your communication needs. We have served thousands of companies with our cloud-based business phone system. Sign up to Calilio and experience the exciting features of a virtual phone system for your business communication.

Frequently Asked Questions

What is a cloud telephone?

A cloud tele­phone is a modern communication solution that operate­s through the internet instead of conventional phone lines. It is also referred to as a cloud-based phone or virtual phone syste­m.

What is the benefit of a cloud phone?

Cloud phone syste­ms offer numerous benefits, including incre­ased flexibility, scalability, and cost-effe­ctiveness. Businesses can easily add or remove users without extra hardware and installments. It makes the cloud calling system more flexible and economical than traditional alternatives.

What is a telephony system?

A tele­phony system encompasses the­ technology and infrastructure used for voice­ communication over a distance. It includes hardware­, software, and protocols allowing voice calls through various means such as traditional phone­ lines, private branch exchange (PBXs), and business communication solutions like VoIP phone systems.

Why a cloud phone system over an on-premise system?

A cloud phone system offers numerous advantages over an on-premise system. It e­liminates the need for expensive infrastructure­ and maintenance, as a cloud service provider hosts and manage­s the system. Moreover, it allows businesse­s to enjoy greater fle­xibility and scalability and effortlessly adapt to evolving business communication needs.

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