| A cloud phone system runs a business’s call handling on a hosted platform. Staff make and receive calls through compatible desk phones, computer apps or mobile apps. The provider manages the hosted platform, while the business still needs suitable devices, connectivity and agreed support. |
Before switching to a cloud phone system, compare the full cost, confirm your numbers can move, and decide how calls will be handled if the office connection or the provider’s service fails. This guide explains those decisions for owners and managers comparing options.
It covers how a cloud phone system differs from an on-site PBX and from VoIP, which features to check, how to compare costs, what to plan for outages and 111 calls, how to handle call recording, and how to plan the switch. For Exodesk’s setup and support, see our business phone systems service.
What is a cloud phone system?
A cloud phone system is a business phone service where the central platform, which handles numbers, call routing, voicemail and queues, runs in a provider’s hosted environment rather than in a cabinet at your office. Staff reach it through desk phones, computer apps and mobile apps, and an administrator manages it through a web portal.
Moving the platform off site does not remove everything local. Handsets, headsets, apps, the office network and the internet connection still need to work, and somebody still needs to look after them.
How is it different from an on-site PBX?
A PBX, or private branch exchange, is the system that routes calls inside a business. It can run on equipment at your premises or be hosted by a provider, and modern on-site systems can also offer apps, queues, remote access and integrations. The difference is where the central platform runs and who manages it, not the length of the feature list.
Cloud hosting shifts management of the central phone platform to the provider. Confirm who maintains handsets, apps and any local equipment, how upgrades are handled, and what notice you receive for maintenance or service changes. Hosted platforms and editions can also be retired, so ask how the provider handles that too.
Is a cloud phone system the same as VoIP?
No. VoIP, voice over internet protocol, is the technology that carries voice over IP networks, including private networks. It is not a hosting model. Cloud and on-site phone systems both use it. Our VoIP guide covers the technology, and if your staff already work in Microsoft Teams all day, Teams Phone is another option to compare.
Which cloud phone system features should you check?
Features vary by platform, edition, carrier, region and configuration, so treat this as a list of things to check rather than a list every cloud phone system includes.
- Call routing. Auto-attendants, ring groups, queues and different handling for business hours, after hours and holidays.
- Mobile and desktop apps. Business caller ID, transfers and presence, tested on the phones and computers staff actually use.
- Voicemail. Whether messages reach email or a shared inbox, and who picks them up when someone is away.
- Reporting. Call volumes, missed calls and answer times, and whether the reports suit the decisions you need to make.
- Integrations. CRM, helpdesk or Microsoft Teams connections, confirmed for your exact applications and editions rather than assumed from a vendor list.
- Optional extras. SMS, call recording, transcription and AI summaries, which depend on the platform, plan and carrier, and each raise their own data questions.
Which features matter for remote teams?
Check mobile and desktop apps, business caller ID, transfers, queues, presence and after-hours routing. Test them on the devices and connections staff actually use, including home broadband and mobile data. Confirm app security, support arrangements, emergency calling and what happens when a connection drops. Remote working does not work by default; it works when the apps, connections and call flows have been set up and tested for it.
How much does a cloud phone system cost?
It depends on the number of users and sites, the calls you make, the devices you need and the commercial model. Compare the total cost over the same period: setup, number porting, handsets or headsets, platform licensing, numbers, calling, connectivity, support and any contract exit charges.
Check whether pricing is per user, per system or based on call capacity. Providers use different models: some charge per user per month, while others price the system by the number of calls that can happen at the same time. Ask which destinations, features and usage limits are included, and what counts as extra.
Is a cloud phone system cheaper than an on-site PBX?
Not automatically. The comparison depends on whether existing handsets can be reused, your call volumes, the remaining life and vendor support of the current system, contract terms and the support you need. Compare both options over the same period with the same features, and include the cost of changing, not just the monthly figure. If new handsets are part of the change, hardware leasing can spread that cost.
What happens to a cloud phone system if the internet or power goes down?
That depends on how the service and your fallback are set up, so ask about three separate events: an office internet outage, a power cut and a provider outage. For each, confirm how new calls are routed, whether active calls can drop, how long recovery may take and who manages the incident. Then test the agreed fallback before go-live.
Restoring the service, rerouting new calls and keeping calls that are already connected are different outcomes, and a provider may offer some and not others. Failover also depends on how the platform is deployed and configured, so hosting in the cloud does not prove it on its own.
- Mobile apps still need a working data connection and a working platform.
- Call forwarding may depend on the service that has failed, unless it is arranged upstream with the provider or carrier.
- A backup connection, such as 4G or 5G, needs power and suitable coverage at the site.
- Price does not prove resilience. Ask for the documented arrangements, status updates and support hours instead.
Plan how staff will call 111
The Commerce Commission’s 111 Contact Code protects residential landline customers during power cuts. It does not cover businesses, so plan how staff can reach 111 during a power cut or outage. Ask the provider how 111 calls work from each site and from remote apps, and what location information is passed to emergency services, rather than assuming every app behaves the same way.
A phone outage is a business continuity question as much as a technical one. Our business continuity plan guide covers how to decide which services need a fallback and how to test it.
How do you choose a cloud phone system provider?
Use the same questions for every provider so the answers can be compared. Price matters, but so do the terms behind it.
- Licences and calls. The pricing basis, included destinations, usage limits and what costs extra.
- Devices. Supported handsets, headsets and apps, and whether your current handsets can be reused.
- Integrations. The named applications and editions that will connect, confirmed in writing.
- Porting. Which numbers can move, who arranges the transfer and how the transfer window is agreed.
- Support. Support hours, who you call, and who handles changes after go-live.
- Outages. How calls are routed, how you are kept informed and how the service is restored.
- Data handling. Where call data and recordings are stored, who can access them and how long they are kept.
- Exit terms. Contract length, exit charges and how you take your numbers with you.
Check security for the actual service and call path: encryption, multi-factor authentication on the admin portal, and restrictions that reduce toll fraud, such as barring international destinations you do not call. A cloud phone system is another business service that needs protecting, which is why it belongs in your wider cyber security planning.
Call recording and AI transcription
Not every cloud phone system records calls by default, and recording, transcription and AI summaries are separate features to switch on deliberately. Before enabling any of them, decide why they are needed, how callers and staff will be informed, who can access the output and when it will be deleted.
Confirm whether any external services process the audio or transcripts, and where. AI summaries can get details wrong, so check important details against the original conversation before relying on a summary as the record of a customer instruction.
A recording of a call is personal information. The Privacy Act expects people to be told when information about them is being collected and why, and the Privacy Commissioner notes that it might be unfair to record someone without telling them. A provider cannot make your business compliant on its behalf: how the business collects, uses and keeps recordings is its own responsibility.
How to plan the switch
Timing depends on the number of users, sites and numbers, carrier requirements, integrations and the devices involved, so agree it after those have been checked rather than working to a standard figure.
- List every number and what it is used for, including fax, alarms, lift phones, EFTPOS terminals, door entry and paging, and any broadband bundled with the phone line.
- Check contracts for end dates and exit charges on the current phone and broadband services.
- Confirm 111 arrangements for each site and for remote apps.
- Design the call flows: business hours, after hours, groups, queues and voicemail.
- Pilot with a small group on the devices and connections they actually use, and adjust before everyone moves.
- Arrange the number transfer, agree the transfer window and set up a temporary contact route.
- Train staff on the apps and handsets, and agree who to contact about problems after go-live.
Can you keep your existing numbers?
Eligible existing numbers can be moved to a new provider, a process called porting. Ask the new provider to confirm each number and arrange the transfer before cancelling the old service, because cancelling first can lose the number. Agree the transfer window and a temporary contact route, because service can be interrupted during porting. The Telecommunications Forum manages the industry process for number portability in New Zealand.
Frequently Asked Questions
What is a cloud phone system in simple terms?
A cloud phone system runs the call handling for a business, including numbers, routing, voicemail and queues, on a platform hosted by a provider. Staff make and receive calls through desk phones, computer apps or mobile apps. The provider manages the hosted platform, while the business still needs suitable devices, connectivity and agreed support.
What is the difference between a cloud phone system and VoIP?
VoIP is the technology that carries voice over IP networks, including private networks. It is not a hosting model, and both cloud and on-site phone systems use it. A cloud phone system is defined by where the central platform runs and who manages it.
How is a cloud phone system different from a traditional PBX?
A PBX routes calls inside a business and can run on equipment at your premises or be hosted by a provider. With a cloud phone system, the provider manages the central platform. You still need to confirm who maintains handsets, apps and any local equipment, how upgrades are handled and what notice you receive for maintenance or service changes.
Is a cloud phone system cheaper than on-premises?
Not automatically. Compare both options over the same period with the same features, including setup, porting, handsets, licensing, numbers, calling, connectivity, support and exit charges. Check whether pricing is per user, per system or based on call capacity, and what usage limits apply.
Which features matter for remote teams?
Check mobile and desktop apps, business caller ID, transfers, queues, presence and after-hours routing. Test them on the devices and connections staff actually use. Confirm app security, support arrangements, emergency calling and what happens when a connection drops.
How long does it take to set up a cloud phone system?
It depends on the number of users, sites and numbers, carrier requirements, integrations and devices. Agree the timing after those have been checked, and allow for a number transfer window. A pilot with a small group before everyone moves helps catch problems early.
How secure are cloud phone systems?
That depends on the service and how it is configured. Check encryption, multi-factor authentication on the admin portal, restrictions that reduce toll fraud, and where call data and recordings are stored and who can access them. Confirm these for the actual service and call path rather than relying on general claims.
What happens to a cloud phone system if the internet goes down?
Desk phones and computer apps at the affected site stop working unless a fallback is in place. Mobile apps need a working data connection, call forwarding may depend on the failed service unless arranged upstream, and a backup connection needs power and coverage. Agree how new calls are routed during an outage and test it before go-live.
Can I keep my existing phone numbers with a cloud phone system?
Eligible existing numbers can be moved to a new provider, a process called porting. Ask the new provider to confirm each number and arrange the transfer before cancelling the old service. Agree the transfer window and a temporary contact route, because service can be interrupted during porting.
Do cloud phone systems work well for NZ businesses?
They can, where the connection, devices and call flows suit the business. Check connection quality at each site, test the apps on staff devices, and confirm local numbers, support hours and 111 arrangements with the provider. Businesses are not covered by the residential 111 Contact Code, so plan how staff will reach 111 during an outage.
Who benefits most from a cloud phone system?
Businesses with staff across several sites or working remotely, or with an on-site system reaching the end of vendor support, have the clearest reasons to compare. A single-site business with a supported system that works may have less to gain. Compare the options against your own call patterns and costs.
NEXT STEP
Ready to compare your phone options?
See Exodesk’s business phone systems service for how we set up and support business phones, or talk to us about your current phones. We work with businesses across New Zealand.
Or contact us about your current setup.
