Canadian SMBs save big with hosted VoIP services

Toronto lawyer Zak Muscovitch can take calls wherever he is, on a desk phone, mobile phone or computer. Incoming faxes show up in his e-mail. “I get voice mail without having to log into anywhere,” he says. His secretary can even transfer a call that comes into his Toronto office to his laptop in an overseas hotel room.

And the equipment this requires in the office of Muscovitch Law Firm? None. It runs on RingCentral, a service that marries Voice over Internet Protocol (VoIP) and cloud computing. Instead of an IP private branch exchange (IPBX), the law firm subscribes to a service that runs on San Mateo, Calif.-based RingCentral Inc.’s servers, to which its phones connect via the office internet connection.

Muscovitch removed three Bell Canada lines (keeping one as a backup though he says he hasn’t used it) when he switched to RingCentral last February. He says the change saves money – RingCentral starts at $25 (U.S.) per user per month with discounts for larger installations — and gives him a host of new features. Besides routing calls anywhere, one of Muscovitch’s favourite features is the voice greetings and prompts recorded by professional actors. “It projects a much larger company image than I would otherwise have if I did it or my wife did it,” he says.

RingCentral, which formally started marketing its service in Canada in August, joined a growing list of providers of cloud VoIP or hosted VoIP services.

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Among its various internet and telephony services, Primus Telecommunications Canada Inc. offers Hosted PBX. Starting at around $40 per user per month, it can support from a handful of seats to a couple of hundred, says Jeff Lorenz, vice-president of sales and marketing for Primus Business Services.

NetVoice Communications, a Vancouver firm recently acquired by telecom provider Glentel Inc. of Burnaby, B.C., offers its Managed IP PBX Service to customers of all sizes, also at about $40 per user per month, dropping to around $20 per user in large installations, says George Pajari, project manager for IP voice services.

Victoria Treyger, chief marketing officer at RingCentral, says the key advantage of cloud VOIP is simplicity. Installing an IP PBX means selecting a system then having someone install it, configure it and keep it running, she says. For small businesses, that can be a significant burden.

“There’s a convenience element to the hosted model that makes a lot of sense for the small-business guys,” agrees Jon Arnold, a Toronto consultant specializing in IP communications and president of J Arnold & Associates.

A hosted service also means greater reliability, Pajari says of NetVoice. The company runs its servers from a data centre with power backup and 24-hour monitoring. Even if a customer’s office is shut down by some disaster, calls can be routed to any phone. An internet outage can affect phone service, but calls can be routed to other numbers.

Paying for an office phone system by monthly subscription rather than up front is often an incentive too. In the present tough economy, Arnold says, this may even be a consideration for larger businesses.

In the days before VoIP, small offices that didn’t want the hassles of running their own PBXs could use the phone-company’s Centrex service, which essentially provides basic multi-line capabilities managed from the carrier’s central office. Cloud VoIP could be called the new Centrex, except that it’s available from multiple providers.

But it has advantages over Centrex, Lorenz points out, major ones being the ease of reconfiguring a hosted PBX system via a web interface and the ability to support remote extensions and multiple locations.

That’s a big plus for Nannies on Call, which has grown from a local Vancouver business to a cross-country operation since adopting NetVoice about five years ago. “We can talk to all of our staff by just calling an extension instead of calling a phone company,” says Michelle Kelsey, founder of the nanny referral service. Some employees also work from home.

A hosted service also scales easily. “It’s been really easy for me,” Kelsey says. “Every time we grow, literally, I just call George and he sends me another phone for the system.”

While hosted VoIP is a good choice for many small businesses, Arnold says, one concern is that many providers are small companies with limited track records. He urges would-be customers to try to make sure they are dealing with a company that will last. And voice quality may be a question, especially if a service operates over the public internet, though some use private IP networks. Muscovitch and Kelsey says the services have occasional hiccups, but usually work well.

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