Comparisons6 min read

Is Cloud Telephony the Same As VoIP? What Are the Differences?

cloud telephony vs voip

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VoIP technology is becoming a favored communication technology among businesses as this can save up to 45% on phone costs compared to traditional telephones, with a 67% increase in productivity. With the rise of VoIP and cloud telephony, businesses need to know which one to choose.


While both VoIP phone systems and cloud telephony use the same underlying technology, Cloud Telephony provides more control over communication with advanced features like call queuing and monitoring.

What is Cloud Telephony?

Cloud telephony is a communication system that uses voice over Internet Protocol (VoIP) to communicate through the Internet. It offers more than voice calls and adds advanced features like IVR (Interactive Voice Response), call queuing, and call forwarding. Cloud telephone systems allow you to send SMS and make and receive calls on multiple devices, including smartphones, laptops, and desktops. Businesses don’t need to install any hardware and infrastructure as these are all managed by cloud telephony providers.

How Does Cloud Telephony Work?

Cloud telephony runs in the cloud and uses VoIP (Voice over Internet Protocol) to convert analog voice signals into digital data packets. The packets travel through the Internet and are received by end devices (like a landline, mobile phone, or laptop), where data packets are converted back to the analog voice signal.


Cloud telephony uses VoIP services to communicate online instead of the traditional PSTN (Public Switched Telephone Network). Users don’t need to install hardware systems like telephones and cabinets in cloud telephony. VoIP desk phones or a softphone (an app) are used to place a call rather than traditional phone extensions. VoIP service providers handle the call routing.

What is VoIP?

VoIP is a communication technology that enables you to place voice calls through the internet by converting voice signals into smaller digital packets that are reassembled to voice signals at the receiver end.


VoIP technology is used in cloud telephony as well as modern PBX systems. Business can modify their traditional PBX using VoIP for advanced features like call monitoring, voicemail, and call queuing. It is only recommended when you want to upgrade your PBX communication system.

How Does VoIP Work?

VoIP converts voice signals into small packets of data that can be transferred over the internet. It sends those packets to the recipient devices, which are converted back into voice signals.


  1. Conversion of Voice to Digital Data: A VoIP system converts analog voice signals into smaller digital packets to make them transferable over the Internet.
  2. Packetization: Digital voice data is divided into small packets that contain voice data and source and destination IP addresses.
  3. Routing and Transmission: Data packets are sent over the internet through network devices that analyze the best path to reach the destination based on the destination IP address.
  4. Packet Reassembly: Data packets are reassembled in the correct order based on their sequence number.
  5. Conversion of Digital Data to Analog Signal: The receiving device converts digital packets to original voice signals.

Main Differences Between Cloud Telephony And VoIP

VoIP phone system is a subset of cloud telephony and refers to the components required to communicate over the internet using VoIP technology. The hardware includes VoIP endpoints, IP PBX servers, and VoIP gateways. In contrast, cloud telephony encompasses VoIP with additional features and services, such as IVR, call recording, and call forwarding, that are hosted in the cloud.



Cloud Telephony



No additional hardware required.

May require IT Phones or ATA for traditional user.


Easy to add/remove users.

Adding users might involve additional hardware installation.


Considered cheaper than VoIP as it is fully cloud-based.

Can be more expensive if it is on-premise, as hardware installation is required.


Every data and call recording is safely stored in the cloud.

Data may get lost in disaster if they are stored in internal data centers.


No user-side maintenance is needed.

Requires maintenance for physical devices if it is on-premise.


Cloud telephony systems do not require additional hardware installation as service providers host and manage it. Businesses pay a subscription package to access these services over the Internet.


If a VoIP phone system is deployed on-premise, organizations will need to install and manage the overall hardware and software infrastructure. This can include multiple servers, POE (Power-over-Ethernet) switches, SIP trunks, and a firewall. Hosted VoIP solutions are managed by service providers, and no additional hardware is required. 


Cloud telephony offers greater flexibility in adding or removing users as the services are hosted in the cloud. Companies can keep their current infrastructure the same.


Scaling up and down VoIP phone systems may require significant infrastructure changes, especially for on-premise VoIP.


Cloud telephony is generally cheaper than VoIP phone systems as it doesn’t require hardware installation (like a landline, PC, or laptop) and has lower maintenance expenses.


The cost of a VoIP phone system depends on whether it is deployed on-premise or hosted on the cloud. On-premise is more expensive as it requires investing in new hardware and possibly new software on top of a high maintenance fee. Hosted VoIP is comparatively cheaper as it operates on a monthly or annual subscription basis.


In cloud telephony, the data is stored in the cloud, which you can access anytime and anywhere. The data is hardly damaged during calamities or disasters as it is replicated across several data centers for resiliency.


In VoIP, data may get lost in catastrophes and disasters if users have stored data in their own data centers, as in on-premise VoIP, there is a single point of failure as it is set up in one location.


There is no maintenance cost for cloud telephony as it is cloud-based and managed by third-party providers. On the other hand, a technician may be required to maintain the VoIP system if external hardware is installed, as is required for on-premise VoIP.

Wrapping Up

Cloud telephony and VoIP are similar in that they both involve making and receiving calls over the Internet. The core differences lie in how they are implemented. You only need an active internet connection to use cloud telephony services, making it suitable for businesses of all sizes. On the other hand, the VoIP phone system (or IP PBX) may require new hardware, depending on whether it is on-premise or hosted.


Calilio offers both cloud telephony and VoIP technology. VoIP technology is only recommended if you have previously installed the traditional PBX system; otherwise, cloud telephony will be best as this does not require any additional hardware installation other than your daily use devices (smartphones and laptops).

Frequently Asked Questions

Is cloud telephony the same as VoIP?

Cloud telephony is not the same as VoIP. Cloud telephony is an application of VoIP technology that hosts VoIP services and infrastructure in the cloud, managed by VoIP service providers. On the other hand, VoIP is a technology that makes voice communication over the Internet possible.

What is the use case of cloud telephony?

Cloud telephony helps businesses manage their communication system by providing essential features like virtual phone numbers, call routing, and IVR to improve customer support, sales and marketing.

What is an example of cloud telephony?

Calilio is the best example of cloud telephony that supports multi-user calls, call monitoring, and call storing.

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