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Virtual Offices' Rise in Popularity is a Sign of the Times

Ring Central Blog


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Dec 01, 2009

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 providing the company in order to help business owners make better-informed decisions about their communications strategies. To their credit, the folks at RingCentral wanted to not only supply their customers with a communications platform but help them be more successful at running their companies.

So I’m proud to announce that RingCentral has conducted a study that shows an emerging trend in how America’s SMBs 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.”

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

While the cost savings in overhead are obvious (as can be evidenced by another independent study conducted by, hiring remotely also enables companies to bring on skilled employees from less expensive areas of the country. In addition, many remote workers are willing to take less salary for the ability to avoid rush-hour traffic 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 and Austin, I can say that rent in the former is almost triple what it would be anywhere in Texas. Having the ability to grow in metropolitan areas while being able to attract talent in “college towns” like Austin 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 each city’s cost-of-living index.

OK, so I know some are saying “John, people have been effectively working remotely for years by telephone.” And yes, that’s true, but the real driving force behind the growth of telework is the ability to open a virtual office with the entire suite of features that, previously, only an enterprise-level IT department would be able to set up.

Example: In the 1990s, innovative companies such as Cisco Systems made it possible 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 collaboration tools for big businesses. However, what “Business Phones as a Service” companies have done is made enterprise-level features available to firms of all sizes. Thus:

  1. Any business can afford a full-featured phone system and be tiered to a pricing structure that allows even a micro-business to pay for the services it uses.
  2. SMBs can adopt such technologies on a singular platform. That means that a new employee leveraging a virtual VoIP business service can get signed up for, and trained on, a suite of features such as: intelligent call-routing, a local DID, visual voicemail, internet faxing, auto-attendants, office-to-mobile call handling and conference calling ability – all in one afternoon.
  3. Business phone systems are now 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 that needed for today’s services. Now when we hire a new employee, it takes very little training to get him/her 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, 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

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