We take a rather complex term and break it down into its feature components using the example of the Virtual Office.

As we mentioned in a previous post on cloud computing, the term itself is hotly debated and its definitions are segmented. So let’s use the example of how Cloud Computing has allowed for the “Virtual Office.”

Cloud computing, at its core, is the ability for someone to take a service like a business phone system and “rent” its usage to a wide variety of customers . Because it’s cheaper and more resource efficient for a single vendor to offer services this way, it means that the end consumers have to pay far less than traditional, non-cloud based services of a similar nature.

RingCentral Office is a perfect example. Let’s say a 20 employee company is growing and wants to expand in a new location cost effectively – one that will also have remote satellite offices where employees will work from home.

Traditionally, this would mean that this company has to:

1. Order a new punch-key PBX (phone system) from a traditional hardware vendor who would charge about $1,000 per phone/desk.
2. Call the local telecommunications company to install a T1 line which contains 24 working phone lines. While the cost of this T1 could range from $300 to $700 per month, the real pain is the installation time.
3. After the hardware has been configured and installed, the same vendor that sold the phone system offers training to the company employees (for additional training fees).
4. After the phone system is bought, the T1 lines from the phone company have been installed and the employees trained on the new phone system, then it’s time for the remote offices and on-the-road sales staff to “integrate” into the new office phone system. And how do they do that? By learning how to forward phone calls on their new office desk phones, of course!
5. Any new moves, adds, or changes (known as MACs) to the phone system often require that the vendor who initially sold the phone system come out (referred to in the industry as “the white van”) and make the changes to the phone system itself.

If this company subscribed to a Business Phone System that runs “in the cloud”, the benefits are compelling:

1. Since the hardware & software that controls a business-class phone system is now delivered over the Internet as a service, this company gets fully-configured VoIP phones delivered without having to buy anything else. The only left to do is connect the phones to the Internet.
2. Since the VoIP phones also have a web interface that controls the phone and call-flow, there’s no training of employees on the new phone system required. It’s very easy to master a VoIP phone. One can even take an interactive demo to see just how easy it is.
3. These Business Phone Systems can be added to your smartphones as well. Remote office workers and road warriors can now truly “integrate” with their office desk phones. Apps like RingCentral Mobile for iPhone can be downloaded and set to show the business Caller ID, even from a personal phone.

Now that’s a simple example of how cloud computing is allowing the virtual office to be “virtual.” Because with cloud computing for business phone systems, every phone whether it’s in the headquarters or living on a smart-phone are all virtual phone systems.

The revolution has begun!

A fascinating survey conducted by RingCentral shows an emerging trend in the way America’s small businesses are operating. Here’s the scoop.

When I first started writing for RingCentral, one of the ideas thrown around in our early brainstorming sessions was to open up the data that customers were supplying the company in order to help small- and medium-sized business owners make better-informed decisions about their communications and work-flow strategies. To their credit, the folks at RingCentral wanted to not only supply their customers with a communications platform, but they wanted them to also be more successful at running their day to day operations.

I’m proud to announce that they’ve recently conducted a study that shows an emerging trend in how America’s businesses in the SMB (small- to medium-sized business) sector are operating in today’s challenging economic climate. In a nutshell – business owners plan to expand their business operations next year, but will heavily leverage VoIP technology to grow their offices “virtually”. While this may sound self-serving, in my experience this is a bold move for any company to “open up their veil” like this in an effort to help entrepreneurs.

They have some nice pie charts and breakdowns in the RingCentral survey (located in the first link above), but the summary upshot is that more businesses are hiring employees that do not necessarily work from the office or even in the company’s location. And while most businesses want to give their customers the impression that all are working from one geographic location, more than half of the expected new hires in 2010 will be working from a “virtual office”.

While the cost savings in infrastructure overhead are obvious (as can be evidenced by another independent study conducted by officebroker.com), what some don’t state are the benefits of being able to hire equally skilled employees that work in less expensive areas of the country – and the willingness of employees to take less salary for the ability to avoid rush-hour or daily parking expenses. In essence, people will take less if it means that their workplace lifestyle is better.

Having worked in both San Francisco as well as Austin, I can say for certain that rent is almost triple here in “the city” as opposed to anywhere in Texas. The ability for a business to be able to grow in a metropolitan area in San Francisco or New York, while being able to attract talent in a highly educated talent pool that surrounds such “University-towns” is a significant competitive advantage. This is a generalization of sorts (San Francisco versus Austin), but an SMB can hire 1.5 virtual employees for every 1 physical employee. That’s not a comment about which place is better to live, it’s just an economic fact of the cost-of-living index respective to each city.

OK, so I know some are saying “John, people have been effectively working remotely for years by telephone.” And yes, that’s true, but what’s really the driving force behind being able to do this in a large scale is the ability to be able to quickly ramp up a remote virtual office with the entire suite of features that, formerly, only an enterprise-level IT department would be able to setup.

Example: In the 1990’s (has it been that long already?), innovative companies such as Cisco Systems offered the ability for large-businesses to deploy virtual offices for remote workers that encompassed fax, virtual DIDs (local numbers) and unified messaging on one platform. But the costs were high and the interfaces still in their “1.0″ stage. Now that’s not an insult to Cisco because since then they have invested in major new enterprise-level collaboration tools for big businesses. However, what “Business Phones as a Service“companies have done is created the ability to allow such formerly pricey features to be had so that:

1. Any business could afford it and be tiered to a pricing structure that allowed even a micro-business (read: 1 person) to pay per usage as their business grew to multiple employees over time.
2. SMBs could adopt such technologies on a singular platform. That meant that a new employee leveraging a virtual VoIP business service could get signed up for, and trained on, a suite of features such as: intelligent call-routing, a local DID so that their area codes appeared to their customers as coming from the same as headquarters, visual voicemail, internet faxing, auto-attendants, office-to-mobile call handling and conference calling ability – all in one afternoon.
3. It was easy to use. I remember starting a VoIP company with engineers from Webline, one of the pioneers of web collaboration that came out of MIT’s annual entrepreneurial competition. It was inventive and useful, but the training it required was an order of magnitude greater than the services offered today. Now when we hire a new employee, it takes very little training to get them on the “office communications platform” because the user interface is self-explanatory. It’s akin to the iPhone versus the old punch-key PBX phones – they can both do amazing things as far as communications go, but one doesn’t come with a training manual. Know what I mean?

More exciting – and useful – stats to come. Stay tuned!

Photos by deborah jaffe & Silent700