- The evolution of business phone systems: From landlines to the cloud
- Landlines
- PBX
- VoIP
- Cloud
- 4 key types of business phone systems explained
- Why cloud-based systems are ideal for modern teams
- What to look for in a cloud-based business phone system
- Discover Aircall: The customer communications and intelligence platform that scales with your business
- Frequently asked questions about phone systems
Ready to build better conversations?
Simple to set up. Easy to use. Powerful integrations.
Get started- The evolution of business phone systems: From landlines to the cloud
- Landlines
- PBX
- VoIP
- Cloud
- 4 key types of business phone systems explained
- Why cloud-based systems are ideal for modern teams
- What to look for in a cloud-based business phone system
- Discover Aircall: The customer communications and intelligence platform that scales with your business
- Frequently asked questions about phone systems
Ready to build better conversations?
Simple to set up. Easy to use. Powerful integrations.
Get startedTrying to operate with a phone system that doesn’t fit your business needs can lead to stretched sales and support teams, disconnected communications, slow sales cycles, and delayed query resolutions. But when researching solutions, you’ll find the market is full of different options, and knowing which one is best for your business isn’t always clear.
Let’s break down the pros and cons of each type of phone system, including:
Landlines
Private Branch Exchange (PBX)
Voice over Internet Protocol (VoIP)
Cloud-based
We’ll look at factors like cost and value, features, and scalability so you can make an educated decision for your business, have better conversations, and boost your bottom line.
The evolution of business phone systems: From landlines to the cloud
Let’s do a retrospective to see how phone systems have evolved and what these changes have meant for businesses. This section gives a quick overview of the evolution of phone systems, and we’ll go into more detail on each later in the article.
Landlines
The backbone of business communication for decades, landline phones offered reliable but limited features. Businesses were tied to physical locations, and long-distance calls could rack up hefty costs. These traditional phone systems had their drawbacks, but they were nonetheless central to business communications.
PBX
The PBX system made its debut in the 1960s, offering businesses the ability to manage internal communications with more control. This was a significant improvement over landlines, with features like call forwarding and conferencing. But PBX systems were still complex and costly to install and maintain, limiting their accessibility for small businesses.
VoIP
The mid-1990s brought Voice over Internet Protocol (VoIP), a revolutionary technology that transmits voice calls over the internet instead of traditional phone lines. VoIP significantly lowered costs, especially for long-distance and international calls, and offered more flexibility in managing calls. And thanks to VoIP, businesses could now operate from anywhere with an internet connection.
Cloud
Fast forward a few years and cloud-based systems emerged on the scene. These platforms leverage VoIP technology to offer unparalleled scalability, advanced features like AI-powered automation and real-time analytics, and seamless integration with other software tools. Cloud phone systems are also highly cost-effective, with no need for expensive hardware and limited on-site maintenance.
4 key types of business phone systems explained
To help you choose the best phone system for your business, we’ve outlined the key differences between the four main types of phone systems in the table below.
Traditional landline systems
Landlines run on the PSTN (Public Switched Telephone Network) and require physical copper wiring and hardware. While they're dependable, they're not built for how most modern teams work, especially those that rely on remote collaboration, mobility, or real-time data.
If your business still uses legacy infrastructure or operates in a low-internet zone, landlines might still be of value. But for most growing teams, they're more of a limitation than a launchpad.
| Pros | Cons |
|---|---|
Minimal training required | Limited to predetermined physical locations |
Works independently of the internet | No modern integrations or analytics |
Solid call quality and uptime | Costly and inflexible to scale |
PBX (private branch exchange) systems
PBX systems range from on-premise setups to modern cloud business phone systems. There are three main types of PBX systems:
Traditional PBX: On-premise hardware connected to the public switched telephone network (PSTN) via a telecom provider. Reliable, but hardware-heavy and costly to scale.
IP-PBX: Uses your business’s internet connection for call routing, but still relies on internal servers or hardware.
Hosted PBX: A cloud-based version managed by a third-party provider. It functions using VoIP technology and offers more flexibility than on-premise PBX setups.
PBX systems allow businesses to route calls internally with ease thanks to extensions, departments, and call transfers. Larger, established businesses needing robust call routing and control often use these solutions, but they can come with higher setup and maintenance costs.
| Pros | Cons |
|---|---|
Customisable call routing and features | Traditional PBX is infrastructure-heavy |
Good for structured call flows | Higher setup and maintenance costs |
Hosted version allows remote flexibility | Less agile than a full cloud system |
VoIP (Voice over Internet Protocol) technology
VoIP technology takes your entire phone system online so your team can make and receive business calls from anywhere using a laptop, smartphone, or compatible desk phone.
VoIP systems are fast to roll out and budget-friendly given that it uses your existing internet connection. There’s no major hardware to install, and you can add new users instantly. This makes VoIP systems a great solution for small businesses, as they offer agility without breaking the bank.
| Pros | Cons |
|---|---|
Integrates with modern business tools | Internet-dependent call quality |
Compatible between desktop and mobile apps | Needs strong cybersecurity measures |
Quick deployment and low upfront cost | Emergency call routing can be limited |
Cloud-based systems
Cloud-based phone systems run on VoIP technology, and they’re fully hosted entirely in the cloud and managed by a provider. They offer seamless business communication without any on-premise hardware. And they go beyond just calling.
These systems also connect voice with other communication channels like SMS, MMS, chat, and WhatsApp. And with a cloud-based phone system like Aircall, you get access to CRM integrations, smart routing, IVR flows, performance analytics, AI-powered coaching tools, and more.
These platforms are built to scale with your team and adapt to how modern businesses operate, and they're accessible from anywhere.
| Pros | Cons |
|---|---|
No hardware or internal infrastructure needed | Fully reliant on an internet connection |
Easy to scale across teams and locations | Subscription costs may increase with usage |
Minimal IT setup and maintenance | Less control over backend infrastructure |
See firsthand how a cloud-based phone system can optimize your customer support and sales operations. Start your free 7- free trial with Aircall today.
Why cloud-based systems are ideal for modern teams
Modern workforces aren’t tied to one desk, one office, or even one time zone. Cloud-based phone systems are built with this reality in mind.
Whether your team is answering sales calls on-the-go, or coordinating global customer support operations, cloud-based systems empower remote and hybrid companies to stay connected, no matter where staff are working from.
They also come packed with productivity-boosting features, like AI-driven call summaries, real-time coaching prompts, and smart routing, to take pressure off agents and streamline workflows. And straightforward integrations with CRM, helpdesk, and collaboration tools centralize everything your teams need to close deals and better serve customers.
Add built-in analytics and flexible configuration, and it’s clear why more businesses are moving to the cloud. Now, let’s review the features to look for when choosing a cloud-based office phone system for your business.
What to look for in a cloud-based business phone system
Your customers want fast, personal, and seamless interactions. The right cloud-based phone system makes that possible. Here’s what to look for in a cloud-based phone system to ensure your setup delivers the experience callers expect.
| Feature | How it works | Why it’s important |
|---|---|---|
Call recording | Gathers and saves recordings of sales and customer support calls. | Supports quality assurance, compliance, development, and training efforts. |
Smart call routing and queueing | Sends calls to the right agents based on skills, schedules, or workflows. | Helps reduce wait times and boost customer satisfaction. |
IVR (Interactive Voice Response) | Guides callers to the right destination using automated menus. | Reduces manual transfers to improve self-service and reduce time to resolution. |
Customizable call flows | Tailors call routing and IVR to meet the unique needs of your business. | Ensures smooth and personalized customer interactions. |
Call tags | Allows agents to add custom labels to calls to organize conversations. | Gives team members context on a customer’s conversation history. |
Click-to-dial | Enables agents to dial numbers with a single click. | Saves time and improves efficiency in customer outreach. |
Power dialer | Makes calls in rapid succession and records info in CRM. | Enables sales reps to reach more prospects and close more sales. |
Call coaching and whispering | Allows managers to listen into calls and coach in real time. | Improves training and onboarding for agents to boost performance. |
Shared contacts and call inbox | Provides a central location to store contact information and conversation history. | Gives agents context about customers to ensure nothing falls through the cracks. |
Multi-channel communication | Brings Voice, SMS, MMS, WhatsApp, and voice into one shared workspace. | Creates an omnichannel customer service and support experience. |
Voice-to-text transcription | Automatically transcribes and stores calls. | Enables easy search and retrieval to save time and improve accessibility. |
AI agent | Answers your phones round-the-clock and addresses common customer queries. | Allows you to offer 24/7 service and provide quicker answers to callers. |
AI conversation intelligence | Provides actionable insights on agent performance, key topics, and action items. | Helps you better train and coach agents and pinpoint conversation trends. |
CRM and helpdesk integrations | Connects with tools like HubSpot, Salesforce, and Zendesk. | Automatically logs calls and pulls customer history so you can offer better service. |
Real-time analytics | Tracks key metrics like wait time, missed call rate, and call volume. | Helps you manage team performance and improve the customer experience. |
Discover Aircall: The customer communications and intelligence platform that scales with your business
As we’ve seen, not all phone systems are built for the demands of today’s fast-moving teams. Traditional landlines and on-premise PBX setups may have served their time, but they often come with high setup costs, limited scalability, and zero remote flexibility.
For modern businesses navigating remote and hybrid work, increasingly demanding customer expectations, and rapid growth, the best business phone system is a cloud-based one like Aircall.
The platform is scalable, flexible, and built to integrate seamlessly into your existing tech stack. Plus, it comes with time-saving AI features like AI Assist, which gives you key insights into agent performance and call trends, and AI Voice Agent, which answers common customer queries and enables you to offer 24/7 service.
“Since we switched to Aircall, our average CSAT has gone up 4%, which is fantastic,” says Chad Warren, Senior Manager of Customer Service at Vuori. “Phone calls are a big contributor to that because so many people want to be able to have those meaningful interactions and connect with a real person when they have a query.”
Aircall is more than just a phone system; it’s an integrated customer communications and intelligence platform designed to reduce manual tasks, boost productivity, improve the customer experience, and help your team work smarter.
See firsthand how a cloud-based phone system can optimize your customer support and sales operations. Start your free 7- free trial with Aircall today.
Frequently asked questions about phone systems
How many types of phone systems are there?
There are four main types of business phone systems:
Landline systems: Traditional analog systems using a physical network of wires.
PBX: Either on-premise or hosted, enables internal routing of calls.
VoIP: Uses the internet to transmit voice calls.
Cloud-based systems: A modern solution that goes beyond VoIP to connect communication channels like SMS, MMS, chat, and WhatsApp and offer greater flexibility, remote access, and integrated tools like analytics, AI, and CRM syncing.
What is a phone system?
A phone system is the infrastructure or service that manages voice communications for a business or individual. It can include hardware, software, and services that route calls, manage voicemail, and support internal communication. Modern businesses that need an adaptable phone system that can scale up and down with their needs should turn to a cloud-based platform like Aircall.
What are the different cell phone systems?
The two primary types of cellular systems (especially in a mobile carrier context) are:
GSM (Global System for Mobile Communications): Widely used around the world, known for using SIM cards.
CDMA (Code Division Multiple Access): Used primarily in North America, with phones tied directly to the carrier network.
And while companies often use business cell phones to help manage internal and external communication, a cloud-based solution enables you to allocate direct lines or extensions to employees. These platforms are accessible via a mobile app and give users access to advanced features like CRM integrations, warm transfer, shared contacts, and more.
What is the new telephone system?
The new generation of telephone systems is cloud-based VoIP. These automated phone systems use the internet to manage calls and offer advanced features like AI call insights, real-time analytics, and integrations with CRM and helpdesk software. Cloud systems are designed for scalability, mobility, and seamless collaboration, which is why they’re ideal for modern businesses.
Published on June 18, 2025.
