Cloud communications coupled with software products are currently in. In plain terminologies, the cloud-based phone system is a hosted Voice over Internet Protocol or web-based telephone system. It is a program for communications wherein the application remains inactive in the net but prospective subscribers can hook up to it by paying a fixed monthly fee.
One specific example is the popular Skype. Just like other Internet-based apps, users need both software and hardware to successfully use this configuration. You need a cloud phone or personal computer as end point.