Choosing Between Microsoft 365 Phone System and Third-Party VoIP Providers

If you’ve read our blog or know us as your managed IT service provider, you’ve undoubtedly heard us harp on all the reasons why we love the Microsoft 365 Teams phone system above other competitors on the market. 

Here’s why your phone system really matters: choosing the right communication platform can make or break productivity, customer experience, and operational agility. 

With remote work becoming the standard and organizations demanding more integrated digital workflows, the choice between Microsoft 365 Teams Phone System and other third-party VoIP providers is a significant decision for IT leaders. While VoIP services have matured into powerful communication tools, Microsoft’s Teams Phone System, built into the broader Microsoft 365 ecosystem, offers unique advantages for businesses already invested in Microsoft licensing. 

This blog will compare Microsoft 365 Teams Phone System with several well-known third-party VoIP providers to help you make an informed decision.

Microsoft 365 Teams Phone System vs. RingCentral

RingCentral has long been a dominant VoIP provider, known for its reliability, extensive telephony features, and third-party integrations. It offers robust tools for messaging, conferencing, call queuing, analytics, and contact center functionality.

Key Differences:

• Integration: Microsoft 365 Teams Phone System works with Teams, Outlook, and Azure Active Directory, making user management and collaboration frictionless. RingCentral integrates with Microsoft apps as well, but often through connectors rather than native platform convergence.
• Feature Ownership: RingCentral is dedicated to VoIP and UCaaS (Unified Communications as a Service), so its telephony features are rich and continually evolving. In contrast, Microsoft’s approach prioritizes unified collaboration with communication as part of a broader productivity ecosystem.
• Administration: If your organization already uses Microsoft 365, managing users and policies is more streamlined with the Teams phone system, thanks to its shared identity and admin portals.

Who It’s Best For:

• RingCentral: Companies needing highly advanced telephony features right out of the box.
• Microsoft 365 Teams Phone System: Organizations prioritizing deep integration and unified workflows under a single vendor.

Microsoft 365 Teams Phone System vs. Zoom Phone

Zoom Phone has surged in popularity by leveraging Zoom’s massive adoption for video conferencing. It offers robust VoIP calling capabilities, an intuitive user experience, and competitive pricing.

Key Differences:

• Unified Platform: Microsoft 365 Teams Phone System lives within the Teams client, which many businesses already use for chat, meetings, and collaboration. For Zoom Phone users, communication is split between Zoom and Microsoft 365 apps.
• Licensing Flexibility: Zoom Phone can be attractive due to straightforward pricing. Microsoft’s licensing for Teams phone system requires planning (e.g., Microsoft 365 E5 or add-ons), which some businesses find complex (but that can be easily combated by working with a qualified managed IT service provider for guidance). 
• User Experience: Zoom’s interface is familiar and straightforward for Zoom-centric teams. Teams offers richer contextual integration with chat, files, tasks, and meetings all in one place.

Who It’s Best For:

• Zoom Phone: Teams-agnostic environments or organizations already standardized on Zoom.
• Microsoft 365 Teams Phone System: Teams-centric companies looking to reduce app fragmentation.

Microsoft 365 Teams Phone System vs. 8x8

8x8 is a full UCaaS platform that emphasizes global reach, advanced analytics, and contact center capabilities, appealing to organizations with international footprints.

Key Differences:

• Global Telephony: 8x8 has strong international calling plans and local numbers in many regions, making it attractive for global teams. Microsoft 365 Teams Phone System also supports worldwide calling, but pricing and availability vary by region.
• Analytics and Reporting: 8x8’s built-in dashboards and reporting tools tend to be more telephony-focused and granular. Teams’ call analytics are useful but sit within the broader Microsoft ecosystem, which may or may not align with specific reporting needs.
• Integration: If your team needs deep integration with CRM or specialized contact center tools, 8x8 often provides native connectors. Microsoft Teams Phone System can integrate, but often through third-party middleware.

Who It’s Best For:

• 8x8: Globally dispersed or contact-center heavy operations.
• Microsoft 365 Teams Phone System: Businesses prioritizing productivity alignment and simplified vendor management.

Microsoft 365 Teams Phone System vs. Vonage

Vonage is known for its flexibility, API ecosystem, and extensive add-on marketplace, which appeals to developers and custom-centric deployments.

Key Differences:

• Customization: Vonage’s APIs enable bespoke communication features (SMS, voice, programmable workflows). Microsoft Teams Phone System focuses on out-of-the-box communication features tied to Teams.
• Developer Platform: If your organization plans to build tailored communication apps or workflows, Vonage’s programmable tools may be compelling. Microsoft offers APIs too (Graph API, Teams SDK), but the emphasis is broader than just telephony.
• Simplicity vs. Control: Vonage gives granular control and extensibility. Microsoft’s experience is more about simplicity and cohesion within the Microsoft 365 universe.

Who It’s Best For:

• Vonage: Tech teams that want communication deeply embedded into custom applications.
• Microsoft 365 Teams Phone System: Organizations seeking a cohesive experience for end users without heavy custom development.

Why MSPs Choose the Microsoft 365 Teams Phone System

As a managed IT provider, we consistently see the advantage of centralized management, reduced complexity, and enhanced collaboration when organizations consolidate around a unified technology stack. 

In layman's terms, you’re better off keeping everything on one system like Microsoft 365.

Microsoft 365 Teams Phone System isn’t just a VoIP platform; it's a communications layer built into the tools your teams use every day: Teams, Outlook, SharePoint, and Azure AD.

While third-party VoIP providers offer powerful features and specialized capabilities, they often introduce additional vendors, separate admin portals, and integration overhead. For businesses already committed to Microsoft 365, adopting the Teams phone system helps streamline support, simplify billing, and create a cohesive communication experience that spans chat, calling, and meetings.

Ultimately, Microsoft 365 Teams Phone System delivers greater operational efficiency, more substantial security alignment, and lower long-term administrative burden, making it a compelling choice for organizations focused on scalable, modern collaboration.

Questions about integrations Teams Phone Systems into your 365 stack? Chat with a PK Tech team member here.