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Many small businesses share a common problem: they need to hide just how small they are from their big customers. One of the easiest ways to conceal your small operation is to use a professional phone service, but between hardware installation and monthly fees, a good phone system can cost thousands of dollars. Internet-based phone systems are coming to the rescue of small and medium-sized businesses, giving them a low-cost alternative to traditional systems.

One service comes from Redwood City, CA based RingCentral, which was started with venture capital investments. The features they offer include dial by name, toll-free numbers for phone and fax, voice mail, online call logs, cell phone routing, hold music/marketing messages, and dial by number for different departments. This allows a business with only two or three employees to seem like a larger operation; even if you don’t have a receptionist, clients will be greeted in a professional manner. They have plans starting as low as $9.99 a month, a price almost any business owner could afford to pay. The difference between RingCentral and a traditional phone system is that all the services are delivered through an internet connection, not through expensive hardware that must be maintained. This also means that you can track call times, contacts, and phone activity through a desktop widget.

Another popular internet phone service is 8×8 Inc., based in Santa Clara, CA, which has a product called Packet8 Virtual Office. Their service is priced similarly to that of RingCentral, and they also offer unlimited, outbound calling plans using special phones which can route calls through an internet connection. Virtual Office, like competitors, is scalable for the size of the business, with different pricing options for different office needs. This can also be applied to businesses with more than one location As a customer testimonial says, “We have several regional offices and could not justify the expense of separate phone systems for each site. Virtual Office allows us to have a single solution for all of our sites and makes it easier for our customers to reach us.”

M5 Networks links their service directly to the Software As A Service market. They have marketed their product as “Voice As A Serivce,” even using Salesforce.com’s “on demand” language in their website messaging. This is a valid comparison, and a smart one, since SAAS companies are seeing huge growth. The old traditional phone hardware is a good comparison to boxed software; both are expensive for smaller businesses and both require constant attention from IT teams for maintenance and upgrades. When it comes to phone service, businesses do not want to have to think about it. Internet-based phone services not only help the little guys seem more professional, but they also help the big guys free up their IT workers for more important projects.

As 8×8’s vice president for marketing and sales Huw Rees told the Wall Street Journal, “I think the world is moving away from buying boxes of anything.” Indeed, small businesses are leading the way in this software-free (and eventually hardware-free) world, and it’s only natural for phone service providers to follow the lead of innovators like Salesforce. Professional phone service is now in the realm of possibility for small business owners, and they are leveling the playing field one call at a time.

Thursday, March 6th, 2008 You can skip to the end and leave a response. Pinging is currently not allowed.

By Haley January Eckels