RingCentral Gives Small Businesses a Taste of VoIP

Published: October 10, 2007

by Alex Woodie

Small businesses that are investigating whether switching to a voice over IP (VoIP) phone system makes sense for them may want to check out the latest offering from RingCentral, the provider of virtual hosted phone solutions. With the new DigitalLine offering launched yesterday, the Silicon Valley company is allowing its customers to try inbound VoIP for free, and to start placing outbound calls over VoIP for $5 per month, all without buying any new hardware or upgrading their Internet connection.

Over the last several years, RingCentral has attracted tens of thousands of small businesses to its unique virtual hosted PBX system, which addresses several aspects of phone communication. RingCentral lays a veil of virtualization on top of all the various phones a customer might have, so instead of juggling a business line, a home phone, and one or more cell phones, RingCentral provides a single phone number that people can use to contact the customer. That number can either be a toll-free line--to make the company look bigger than it really is--or it can be a local line in practically any area code, making the customer appear to be close to his customer base, even though he may not be.

The RingCentral then routes calls to the customer's various phones, based on rules the customer sets up on the RingCentral Web site. The customer can also make manual call routing decisions (such as forwarding to voice mail or to a cell phone) from his PC using software that displays a "pop up" when a call is made to the customer number. The company also provides voice mail service that sends messages as .WAV file attachments to e-mails, and supports fax, too.

While RingCentral instituted a layer of digital virtualization in phone-based communication, it didn't necessarily have anything to do with VoIP, which is gaining steam these days as a way to save money on phone bills. After all, in its strongest configuration, RingCentral integrated with a customer's existing landline and mobile phones, not its VoIP phones.

Now, with the new DigitalLine service, RingCentral is throwing its hat into the VoIP ring, and becoming a provider of VoIP connectivity. The company is still targeting very small businesses--those with between one and 10 employees--and enabling them to minimize the risk associated with moving to VoIP.

The company's starter package builds off call-controller software that runs on the PC. For $4.99 per month, RingCentral allows users to accept incoming calls from anywhere in the U.S. and Canada via VoIP, using a headset attached to the computer. They can also make outbound calls using VoIP, but the minutes are taken off their existing RingCentral plan, which is sold separately.

The next plan costs $9.99 per month, and provides 500 minutes of VoIP calling time anywhere in the U.S., with additional calling time costing 3.9 cents per minute. For $24.99 per month, users get an unlimited number of minutes. As far as the phone hardware itself, RingCentral allows customers to use a soft-client with a headset attached to the computer, to use their regular phones with a digital convert that costs about $10, or to buy a Linksys VoIP phone for $59.

With these plans, customers can adopt VoIP at their own pace, while minimizing the risks, says RingCentral vice president of business development Jay Blazensky. "We don't force our customs to jump off that VoIP cliff and start buying new hardware and changing routers and other things before they even determine if it's going to meet their needs," he says.

Blazensky says RingCentral offers cost advantages to the 25 million very small businesses in the United States that popular VoIP providers, like Vonage and Skype, just can't match.

"Even if it's a hosted PBX, you still have to replace your phone, you have to replace your routers, you even need a T1 in most cases," he says. "The beauty of what we're offering is that we take a solution that starts out as a virtual, very rapidly deployable model, and we gradually introduce the customer to VoIP at a pace that they're comfortable with, that culminates with them choosing to actually take an adapter and convert their analog phone at home to VoIP or actually purchase a Linksys SIP phone. So we're addressing the 25 million customer target base with a model that takes them to VoIP at their pace."

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