An Introduction To Virtual Phone Systems

Small business owners, mobile professionals and people who work from home have more options than ever for communicating with customers and parnters. New virtual phone systems like RingCentral and Phone.com provide some exciting new ways to project a professional image for small business owners like realtors, contractors and independent consultants.

Buying a PBX is Old School

photo credit: Seattle Municipal Archives

In the past, small business owners who wanted to present a professional appearance had to purchase a small business phone system or “PBX.” PBX is an acronym for private branch exchange, which makes connections among the internal telephones of a private organization, and connects them to the public switched telephone network. The PBX allows a company to have an “extension” for each of its employees, fax machines, etc.

Purchasing a PBX was a complicated and expensive decision for small business owners. With the advent of “hosted PBX” or “virtual phone services”, projecting a professional presence for your business has become incredibly easy and cost effective.

Going “Virtual” With Your Phone System

While I worked at Microsoft on the Office Live initiative, I had the opportunity to meet with many small business owners to hear their challenges and concerns. Most small business owners I talked to had very limited time and budget, yet still wanted to project a professional appearance to their current and prospective customers.

During this time I learned about virtual phone systems and how they provided small businesses a more flexible and cost-effective approach to managing their phone and fax services. One of the partners I met during this time was a company called RingCentral. RingCentral has a very strong virtual phone service offering that is used by tens of thousands of individuals and small businesses for things like 800 numbers, call forwarding, and internet fax. The people there are also very good to work with, and we build a successful partnership for offering these services to Office Live customers.

At first I didn’t quite get the concept. I was asking myself - what exactly is a “virtual phone service?” And how is it different from VoIP - voice over ip services or a PBX public branch exchange, or even the public phone system? Well, in this series of articles, I want to break this down for you based on what I’ve learned. First let’s start with some definitions.

Small Business Phone System Terminology

When talking about phone systems for small businesses, there are three rapidly growing areas:

• Virtual Phone Systems - These phone services provide a web interface that allows you to easily control and set up call forwarding, multiple extensions, voice-mail, directories, hold music and other capabilities. They can route incoming calls to your cell phone or land line, or use VoIP - voice over IP.
• Voice Over Internet protocol (VoIP) - Voice over IP is the ability to make and recieve phone calls from your computer, using the Internet. Many Instant Messenger clients provide the ability to talk using your broadband internet service using VoIP, and some services can also connect you to the PSTN - public switched telephone network - so that you can call out and connect to people not using a VoIP services system as well. Microsoft, Cisco and other large companies have recognized the opportunity and have developed entire Unified Communications strategies to leverage this technology for businesses and individuals.
• Internet Fax - This is the ability to send and receive faxes using your computer and the Internet rather than having a physical FAX machine.

There are many other terms used to describe these features, such as “hosted PBX”, “virtual PBX”, “hosted phone service” and “Internet phone service.” There is an abundance of terms, so I’ll try to simplify things in a series of articles designed to explain how real businesses are using these types of systems to interact with their customers and partners. Subsequent articles in this series will go into more depth on the benefits of these systems, and how real businesses are using them to cut costs and communicate with their customers and partners better.

Here is the link to the main page for this article series on Small Business Phone Systems. And if you want to give a virtual phone system a test drive for your business right away I recommend RingCentral. They have plans as low as $9.95/month and offer a free trial as well.

If you have a story to share about this, please leave a note in the comments or contact us so I can include it!