Cloud telephony, a form of Unified Communications as a Service (UCaaS), provides voice communication services through a third-party host, eliminating the need for traditional enterprise telephone systems like private branch exchange (PBX). Cloud telephony services can be web- or applications-based.

Cloud communication providers establish and maintain standardised telephony platforms on their servers, offering remote access to customers via the internet on a subscription or as-needed basis. This allows organisations to move away from costly and time-consuming on-premises telephone systems, such as PBX.

While the term cloud telephony commonly denotes a multi-tenant access model, where subscribers pay to use shared resources, hosted telephony typically refers to a dedicated, segregated environment—an off-site PBX—maintained in the cloud by a major carrier for a single organization’s use.

How does cloud telephony work?

Cloud telephony operates through a Voice over IP (VoIP) service provider. When a user initiates a phone call using a VoIP desk phone or softphone, the analog voice signals are converted into digital data packets. These digital packets are then transmitted over the internet to their destination. The VoIP service provider handles the call routing in the cloud, facilitating the transfer of voice data between callers.

In essence, cloud telephony leverages the internet to transmit voice communication, eliminating the need for traditional telephone infrastructure. The entire process, from signal conversion to call routing, is managed by the VoIP service provider’s infrastructure, offering flexibility, scalability, and the ability to access telephony services remotely.