If you are picking a business phone system in 2026 and you are already on Microsoft 365, the choice usually comes down to one of two paths. Either you turn phones on inside Microsoft Teams, using Teams Phone, or you keep (or buy) a dedicated cloud phone system and run it alongside Teams.
We deploy both for clients, and our own office runs a dedicated cloud phone platform. Neither is the universal answer, and the people telling you otherwise are usually selling the one they want to sell you.
Here is an honest look at what each one actually gives you.
What they actually are, in plain English
Microsoft Teams Phone is Microsoft turning the Teams app you already use for chat and meetings into a proper phone system. Each person gets a phone number, calls arrive in Teams on their laptop and phone, and you manage it all inside the Microsoft 365 admin centre. You pay Microsoft for calling plans, or you bring your own SIP trunk through a partner.
A dedicated cloud phone system is a hosted phone platform (think RingCentral, 8×8, 3CX, Gamma, Wildix, or any UK-based cloud PBX) that gives you the full set of business-telephony features: call queues, hunt groups, auto-attendants, call recording, voicemail-to-email, mobile apps, DECT handsets, the lot. It integrates with Teams, so your team can still make and take calls from the Teams app, but the brain of the phone system sits with the dedicated provider rather than Microsoft.
Where Teams Phone wins
1. One app, one bill, one admin console. If your business is already deep in Microsoft 365, Teams Phone keeps everything in one place. One licence per person, one portal to manage users, no second supplier.
2. Simpler for small teams. For a 10-person office where calls are mostly outbound and the main need is “give everyone a number”, Teams Phone with the Microsoft Calling Plan is dead simple to turn on.
3. Copilot integration. Microsoft is wiring Copilot into Teams calls (summaries, action items, translation). If you want AI inside your calls, Teams Phone is where that happens first.
4. No separate app for the team. Nobody has to install anything new. Everyone already lives in Teams.
Where a dedicated cloud phone system wins
1. Proper phone-system features. If your business runs a reception desk, a sales queue, a support line, or anything with “please hold, your call is important to us”, a dedicated platform has those features built in. Teams Phone has basic call queues and auto-attendants, but it is a phone system that grew out of a chat app. A dedicated cloud PBX is a phone system that always was one.
2. UK support, UK engineers. If something goes wrong with Teams Phone, you are on a Microsoft support ticket, in a queue that may route anywhere in the world. A UK-based cloud phone provider will give you a human you can talk to in working hours who understands your setup.
3. DECT, desk phones, legacy devices. If you have cordless DECT handsets around the office, desk phones in meeting rooms, a doorbell that dials out, or a credit-card machine that uses a phone line, a dedicated platform handles that gracefully. Teams Phone can do some of this but it is noticeably more painful.
4. Call recording, compliance, reporting. Dedicated phone platforms typically ship with call recording, call analytics and wallboards as part of the service. Teams Phone needs separate add-ons (Compliance Recording partner apps, Microsoft Call Quality Dashboard) and it is more plumbing to set up.
5. Independence from your Microsoft tenant. If Microsoft 365 goes down (and occasionally it does, usually at the worst time), your phones still work on a dedicated platform. On Teams Phone, if your Teams tenant is having a bad day, your phones are having one too.
Where each one has real downsides
Teams Phone downside: pricing adds up. You need a Microsoft 365 licence plus a Teams Phone licence plus a calling plan. For a small team using calls heavily, the per-person cost often comes out above a dedicated cloud PBX once you include the inbound minutes you need. We have seen quotes where Teams Phone was 30 to 40 per cent more expensive than the equivalent dedicated system for the same usage.
Teams Phone downside: call quality depends on your Teams. If Teams is slow on someone’s machine, the call is slow. If their Wi-Fi is sketchy, the call is sketchy. There is no fallback to “just use the phone on the desk”.
Dedicated cloud PBX downside: it is a second supplier. You have Microsoft for email, SharePoint and Teams, and a separate provider for phones. Two systems, two bills, two support contacts, and your Teams admin and your phone admin may be different people.
Dedicated cloud PBX downside: you still use Teams for chat and video. The Teams integration is usually good, but calls routing through two systems means more things that can go wrong at the edges (presence sync, voicemail delivery, call history).
When to pick which
Pick Teams Phone if:
- You are a small team (5 to 20 people) with mostly outbound calling
- You already have a Microsoft 365 licence that includes Teams Phone (some E5 bundles do)
- You do not have DECT, desk phones or legacy call-centre needs
- You value “everything in one place” more than “best in class at each thing”
Pick a dedicated cloud phone system if:
- You run a reception, a sales queue, or any kind of call-flow more complex than “ring everyone”
- You have DECT handsets, desk phones in meeting rooms, or devices that use phone lines
- You want UK-based human support, not a Microsoft ticket queue
- You want your phones to keep working if Microsoft 365 has a bad day
- You want proper call recording and reporting built in, not bolted on
Our take
Calls are a critical channel for us. If a client calls because something is on fire, we need to answer, route it to the right engineer, and have it recorded for the ticket. A dedicated cloud phone platform does all of that natively without us managing a second integration layer.
We also want our phones independent of our Microsoft tenant. If we hit a Microsoft 365 outage, we do not want to lose our ability to answer the phone at the same time as everyone else is calling us about their outage.
And honestly, when something goes wrong with the phones, we want to call someone in the UK who picks up.
For clients, the honest answer is “it depends”. If you are a small professional-services team with 10 people and a simple setup, Teams Phone is often the right call. If you have any kind of call volume, a reception, or physical devices, a dedicated cloud PBX is usually a better fit.
If you are planning for the PSTN switch-off and need a sensible path off ISDN before the deadline, that is also what we do. More on the switch-off and what it means for small UK businesses: PSTN switch-off: what it means for your business.
Where we come in
We quote, deploy, port numbers and support business phones on both Teams Phone and dedicated cloud phone platforms. If you are not sure which fits your business, we will sit down for 30 minutes, look at how your team actually uses the phones today, and give you a straight recommendation. If one does not fit at all, we will tell you.
If you want to talk through where you stand, Book a 30-minute IT review. Thirty minutes, plain English, no pressure.