Microsoft Teams vs Hosted VoIP
Should your phone system live in Microsoft Teams or in a dedicated hosted VoIP platform? Here is an honest comparison of cost, features and flexibility.
Key Features
Both Are Cloud-Based
No PBX hardware either way — the system runs over the internet.
Cost Comparison
Licences, per-user fees and call rates side by side.
Features Compared
IVR, queues, recording and voicemail on both platforms.
Flexibility
How easily each adapts to your business and your numbers.
Integration
How well each fits with the apps your team already uses.
Clear Guidance
A practical way to decide based on your own situation.
Ready to get started?
Get StartedMicrosoft Teams and hosted VoIP are the two most common answers to "what should replace our phone system?" Both run in the cloud and both are perfectly good — but they suit different situations. For background on each, see our Microsoft Teams for Office 365 page and our hosted VoIP and PABX page.
The Big Difference
A hosted VoIP system is a dedicated phone platform — built for calls first, with everything optimised around telephony. Microsoft Teams is a collaboration hub that also does calls. If your team already lives in Teams for chat and meetings, the phone system can move there too. If you want a purpose-built phone system with classic PBX behaviour, hosted VoIP is the more familiar path.
Comparing Costs
Both options need a monthly commitment. Teams calling is priced per user, either through Microsoft Calling Plans or an Operator Connect carrier, on top of your existing Microsoft 365 licences — see our Teams calling pricing page for the detail. Hosted VoIP is usually priced per user or per number with simple call rates. If you already pay for Microsoft 365, Teams can be cheaper; if you do not, hosted VoIP avoids the licence overhead.
Features Compared
Both platforms cover the essentials: IVR auto attendants, call queues, call recording and voicemail. Teams keeps everything inside one app and integrates meetings with calls. Hosted VoIP platforms like ours tend to make classic telephony features — transfer, hunt groups, monitoring, reporting — more accessible, especially for teams used to a traditional PBX.
Flexibility and Lock-In
Hosted VoIP is provider-agnostic: move numbers and users between providers as your needs change, with month-to-month terms. Teams ties your telephony to Microsoft licensing and configuration, so it is worth checking what happens to your calling setup if your licensing changes. A hosted VoIP system can still sit alongside Teams, giving you the best of both.
How to Choose
Choose Microsoft Teams if your staff already use it daily, you want calls and meetings in one app, and your licensing is settled. Choose hosted VoIP if you want a dedicated phone system with straightforward pricing, you are not committed to Microsoft 365, or you want maximum portability. Many businesses run a hosted VoIP platform for the main numbers and connect it to Teams where the teams want it.
Frequently Asked Questions
- Can they work together? Yes. A hosted VoIP system can connect to Teams, so you get both a dedicated phone platform and Teams calling.
- Which is cheaper? It depends on your Microsoft 365 spend and call volumes. Compare per-user costs on both sides before deciding.
- Can I keep my 1300 number either way? Yes — porting works to both a hosted VoIP platform and to Teams via Operator Connect.
- Is Teams as good as a phone system? For most teams, yes. It covers auto attendants, queues, recording and voicemail. For very traditional PBX workflows, hosted VoIP may fit better.