Cloud vs SIP vs VoIP

Cloud vs SIP vs VoIP

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Businesses exploring their phone system options are confronted with terms like VoIP, SIP, and the Cloud. All that alphabet soup can be overwhelming if you are not a technophile. Organisations that know they need to upgrade their office phones can request assistance to determine which phone system is best for their specific needs. Whether you rely on voicemail, conference calling, or virtual reception, it is possible to customise the perfect business phone solution. VoIP, SIP, and Cloud technology each have their advantages and disadvantages.


What is a cloud-based phone system?

A cloud-based phone system, sometimes called a cloud phone for short, uses the power of the internet to make and receive calls. How is this different from a traditional office phone system? Your business may be accustomed to using an office phone system that connects to a traditional landline that relies on an analog signal.

There are some other differences between an analog phone line and a cloud-based phone system in Australia.

Line Setup Setup fees charged and can be exorbitant for on-site hookup. Requires a PBX phone system accessible only while on site. Installed within minutes with little to no setup fee. Accessible remotely.
Maintenance Costs Maintenance must be performed on-site by a service technician. The provider is responsible for all maintenance and updates to the system supporting the web-based phone services.
Call Pricing Monthly service fees and calling rates are high. Up to 60% cheaper than traditional phone service. International and mobile calls charged at lower rates.
Add-Ons/Features Limited add-on options and calling features. Some advanced features require additional software/hardware that must be installed on-site and maintained. Advanced features available, some at no additional cost. No additional software/hardware to install on-site.

As a rule, it is more cost-effective to install and maintain a cloud-based phone system than a traditional analog system. Cloud-based phone systems are ideal for remote workforces because they do not require an on-premises PBX phone system to access or operate. Cloud-based phone systems for small business are also becoming a popular option due to their versatility and affordability.

What is SIP?

What does SIP stand for? SIP is the acronym for Session Initiation Protocol. That is techno-speak for the process of transmitting voice calls over a SIP trunk. It works in conjunction with Voice over Internet Protocol (VoIP) phone systems. A SIP phone differs from a traditional phone, which consists of PBX and PRI (Primary Rate Interface) lines that route calls to their destination. Using a SIP phone service eliminates the need for a regular, physical connection to a phone company. SIP service also removes the requirement for multiple phone lines. SIP phone service is virtually installed over an internet connection, allowing your business to bypass PRI lines and connect directly to the Public Switched Telephone Network (PSTN) via the internet.

What is a VoIP phone system?

bigstock Voip Voice Over Ip Illustratio 281866768 300x211 1Voice over Internet Protocol (VoIP) uses technology to make voice calls over the internet using a broadband connection instead of over traditional analog phone lines or on a mobile network. VoIP services convert voices to digital signals before compressing them and sending them over the internet. On the receiving end of the call, the signal is decompressed and converted back into its original sound. VoIP service providers arrange calls between participants.

VoIP plans eliminate the need for a traditional telephone service, which makes VoIP phone plans a cheaper alternative for businesses. A VoIP phone system for small business offers the advantage of supporting a remote workforce without compromising IT budgets. Business VoIP plans are packaged into several options so companies can choose the VoIP services that further their business objectives and needs.

SIP vs VoIP: which is better?

There is some confusion about the difference between SIP and VoIP, including discussion about which option is better. SIP vs VoIP is not the right question to ask because the two technologies are meant to work together, not against each other. SIP is a protocol used in business VoIP. It is tasked with scaling communications beyond voice-only calling. SIP used in business VoIP supports video conferencing, texting, and other forms of multimedia communication.

Businesses must examine how they use their phone systems before they can determine if SIP VoIP is more suitable than VoIP alone. Every business is different. VoIP with SIP phone service provides the immediate potential for cost savings by consolidating communication technologies. Other benefits of VoIP SIP include:

  • Creation of hybrid phone system by integrating with existing PRI lines
  • Failover to mobile devices if data connectivity is lost
  • Flexibility in pricing for basic service and add-on features
  • Seamless integration with common business applications designed to enhance performance
  • User-friendly administrative tools

There are a few disadvantages to using VoIP SIP. One of the most prevalent is the need for significant bandwidth to support quality service. VoIP for business must be reliable, making it imperative to choose an internet provider and plan that supports VoIP. As a rule, you will need 64 kbps for a typical VoIP call. Let’s use the example of 120 concurrent calls. If your business needs to support that level of calls happening at the same time, it will require a 10 Mbps internet plan at the minimum. Bandwidth requirements for VoIP are above and beyond standard internet usage for your business. This means if you have other business applications that are cloud-based, you will need to have enough bandwidth to handle those applications plus any VoIP calling features included with your plan. The more services and features that your business chooses, the higher the bandwidth needed to ensure quality.

Australian VoIP providers must be notified of your intentions with business VoIP when you are selecting an internet plan to support your VoIP-only or SIP VoIP services. You will want to conduct a VoIP plans comparison to choose the one best suited to your needs.

Cloud-based phone system benefits

Digital transformation no longer is a luxury some businesses can afford to ignore. The recent global pandemic shoved to the forefront the inefficiencies that occur when businesses continue to rely on legacy systems that are outdated and incapable of weathering the storm. A cloud-based phone system is the most economical way to bring your business communications into the 21st century. Here are some other advantages of using this type of telephony.

  • It provides business continuity. The mobility of a cloud-based phone system is one of its greatest advantages. Portability is an asset for any size business, affording convenience for teleworking. Remote workers can stay connected and enjoy all the same phone features and services that are accessible from the office.
  • It produces significant savings. On-premises legacy systems are rife with hidden costs, including hardware replacement when equipment is degraded or damaged. With a cloud-based phone system, monthly charges are predictable. Calls made over a data connection are cheaper than traditional long-distance legacy rates.
  • It improves call quality. There is a common misconception that making calls over the internet will compromise the integrity of the sound. Not so. Reception is clearer with a VoIP phone than with an analog phone. The only time cloud-based phone system calls are inferior is when there is a slow connection to the internet. Ensure you have adequate bandwidth to correct that issue.

Cloud-based phone system disadvantages

There are a few downsides to relying on a cloud-based phone system. The biggest disadvantage comes from outside disruptions to your Internet Service Provider (ISP). This can include spotty service that drops calls and outages that leave you completely without phone service. When these interruptions occur, you are at the mercy of your service provider. Be sure to choose an ISP that is reliable and responsive.

Another factor that can affect your service is power outages. This is a definite drawback to a cloud-based phone system like VoIP or SIP VoIP. Analog phone lines have alternative power sources built along with the landline. VoIP hardware does not. It is possible to keep your system up during power outages with some of the best business VoIP solutions. Businesses can chat with our cloud-based phone system team to learn how to safeguard business VoIP plans from the perils of power outages.

Cloud-based phone system for small business

clouddeviceIn the age of landline business phones, small businesses were disadvantaged when it came to affording fancy business phone features and services. Oftentimes, they were priced right out of including add-on tools that would make them more competitive in the marketplace because they simply did not fit into their budgets.

Incorporating a cloud-based phone system for small business is the most efficient way to revolutionise your business and mobilise your workforce. A business VoIP phone system puts all the tools you need right at your fingertips without breaking the bank.

Finding the best business VoIP solutions

Ready to take your business phone service to the next level? Nexgen’s VoIP for business plans have something for every budget level. Our team members can help your business identify the best cloud-based phone system to meet your needs. Request a free consultation to discuss your options today.

Have additional questions? - We’re always here to help!