UCaaS vs VoIP: Which Is Better for Small Businesses?
Corey McCraw is a staff writer covering VoIP and Unified Communications. Corey has over a decade of experience in marketing, tech writing, and corporate communications and has even penned content for the former First Lady Michelle Obama’s Let’s Move initiative.
Marianne is a staff writer at Fit Small Business who covers business phone services, VoIP, and video conferencing tools.
This article is part of a larger series on Unified Communications.
Unified communication as a service (UCaaS) integrates all communication tools into a single platform, including voice, video, email, and instant messaging. Voice-over-internet-protocol (VoIP) lets users handle inbound and outbound calls via the internet and access a wide variety of phone system features. This article provides comprehensive information on the difference between UCaaS vs VoIP and how to use them for your business.
Based on our comparison, the best use cases for UCaaS vs VoIP are as follows:
- UCaaS: Best for businesses using various communication channels to connect with teams and customers
- VoIP: Suitable for companies looking for a modern phone system to handle inbound and outbound calls
UCaaS vs VoIP at a Glance
UCaaS | VoIP | |
|---|---|---|
Best For | Companies needing a centralized platform for communications | Companies that frequently conduct business over the phone |
Estimated Monthly Cost* | $15 to $45 per user | $10 to $30 per user |
Communication Channels |
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Key Features |
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Can’t decide whether UCaaS or VoIP suits your business? Take the quiz below to see which communications solution fits your needs.
Is UCaaS or VoIP right for you?
*Prices vary based on the provider, features, and number of licenses.
When to Use UCaaS
The main goal of UCaaS is to go beyond the capabilities of VoIP by combining voice, video, fax, chat, and email into a single, cloud-based platform. UCaaS uses VoIP for its voice calling functionality and incorporates other communication channels, creating a unified communications system. This results in a more streamlined user experience, reducing the need to switch between third-party apps and dig for information.
Many UCaaS solutions offer team collaboration capabilities to support remote and hybrid workforces. They serve as a virtual workspace with built-in tools, such as file sharing, shared calendars, to-do lists, and cloud storage. Some include project management features to help teams delegate tasks and improve workflow.
Another interesting feature of UCaaS is its ability to integrate with third-party business applications, such as Google Workspace and Salesforce. For example, integrating your customer relationship management (CRM) system with your UCaaS tool lets you monitor interaction histories and make calls directly from the CRM dashboard.
Businesses should consider a full UCaaS implementation if they’re looking for a full-featured communication solution. By unifying channels and integrating data across apps, UCaaS provides a reliable way to keep your workforce productive, whether they’re working on-site or remotely.
UCaaS has become popular with businesses wanting to drive productivity for distributed workforces. Read our article on what is UCaaS and find out how companies are using UCaaS solutions.
Pros & Cons of UCaaS
| PROS | CONS |
|---|---|
| Combines communication channels into a single platform | Smaller teams might not be able to utilize everything a UCaaS platform offers |
| Integrations and collaboration tools enhance team productivity | Initial learning curve for businesses transitioning to a UCaaS system |
| Greater employee mobility | Increased sharing of information poses privacy issues |
| Easily scales to match the needs of your business | |
| Better data visibility | |
When to Use VoIP
VoIP lets businesses connect their phone service over the internet instead of relying on copper wires to carry voice data. This allows them to access more internet-based features and handle a higher volume of calls over longer distances than they would with a traditional phone system.
VoIP can be implemented on-site or delivered as cloud services through a service agreement with a hosted VoIP provider. With these options, VoIP works in various scenarios, whether you need a new phone system, need to replace a traditional landline service, or expand your current phone setup.
Since VoIP relies on the internet, it provides the flexibility to make and receive calls from a desktop or mobile device. Aside from the basic benefits of a landline phone, it offers advanced call management features, such as call recording, visual voicemail, dial-in conferencing, and automated call routing. It also lets you set up local, toll-free, vanity, and international numbers to help establish your company’s identity.
VoIP is the right fit for companies wanting to replace their traditional phone system with a cloud-based solution. Since VoIP solutions typically work on a per month, per user basis, companies are able to unlock massive cost savings while enhancing the quality of their call performance. If you’re looking for a low-cost VoIP solution, Grasshopper is known for its flat monthly fees and all-inclusive plans.
Do you want to learn more about VoIP? Read our article about what is VoIP and find out how it works, including its benefits and features.
Pros & Cons of VoIP
| PROS | CONS |
|---|---|
| Costs less than a traditional phone system | Requires high-speed internet |
| Allows greater portability | Inadequate router and cables lead to latency and jitter |
| Easily scalable | Security concerns like potential data breaches |
| Advanced call functionalities like conferencing and call recording | Due to mobility, emergency services have difficulties tracing calls to a VoIP system |
| Doesn’t require hardware or equipment investments | |
Providers That Offer UCaaS & VoIP Features
Since VoIP is a part of the overall UCaaS platform, many UCaaS solutions in the market today contain VoIP technology. The leading providers bring together services, such as cloud telephony, video conferencing, and collaboration tools, into a streamlined platform. Because of the differences in pricing and features offered, it is essential for any business to make strong considerations before choosing a service provider.
Here are the top providers offering UCaaS and VoIP features:
RingCentral is a robust, cloud-based platform supporting various communication channels, such as voice, video conferencing, fax, and team messaging. It offers various call management features, such as call forwarding, answering rules, and multilevel auto-attendant. For hosting virtual meetings, RingCentral provides video conferencing tools like screen sharing, closed captions, and co-annotation.
Learn more in our RingCentral review and discover what makes it one of the leading UCaaS providers.
Dialpad is a cloud-based platform that allows users to manage calls, voicemails, texts, and virtual meetings across devices. All plans include unlimited calling, team messaging, voicemail transcriptions, and real-time analytics. One of its strengths is its built-in artificial intelligence features, such as real-time coaching, virtual agents, and speech recognition. Monthly pricing starts at $23 per user.
Find out why this provider is among the most comprehensive business phone systems in our Dialpad review.
8×8 is a unified communications solution that combines cloud phone, video collaboration, team chat, contact center, and analytics. X series plans feature unlimited international calling to up to 48 countries and advanced call center tools like supervisor analytics and call monitoring. If you don’t need all these features, 8×8 offers a very affordable Express base plan with call management and video conferencing tools.
Check out our 8×8 review to learn more about its features and pricing.
Looking for more options? Read our guide on the best business phone systems and find which providers offer unified communications and VoIP capabilities. While you’re at it, check out Geek Squad prices if you need help with software installation and computer setup.
Frequently Asked Questions (FAQs)
Is call quality better with VoIP?
In most cases, VoIP audio quality is generally better than traditional phones. Since it relies on the internet, the call quality largely depends on the strength and reliability of the internet connection. Plenty of factors affect audio quality, such as latency delays, jitter, and packet loss. Choosing a reputable VoIP service provider and cutting out your bandwidth usage are some ways to improve VoIP call quality.
VoIP testing tools measure quality and speed metrics. Check out our VoIP speed test to determine if your internet provider can handle a VoIP system.
Can I keep my phone number when switching to VoIP?
Yes. VoIP providers offer number porting services, which involve transferring your old phone number to your new phone system. Clients are able to keep their number as long as they live in the same geographical area. The cost of porting your number varies depending on the provider. Some offer it for free, while others charge a one-time fee or monthly payment.
If you want to get a new business phone number for your company, it’s important to understand the differences between the options. Check out our guide on how to choose a business phone number that suits your needs.
Do I need a new phone system to make UCaaS work?
No. Since UCaaS relies on the internet, it does not require the purchase of any hardware unless you need headsets or physical handsets. In this case, you have the option to own or rent the phones from your service provider.
Bottom Line
In the VoIP vs UCaaS debate, the challenge isn’t about choosing between one and the other, but knowing whether it is right to combine them both. VoIP works well for businesses needing advanced call management features and the flexibility of cloud-based phone services. But if your business wants to communicate in other channels aside from voice calling, UCaaS offers an all-in-one platform to handle all your communication needs.
