If you haven't yet heard of VoIP--voice over Internet protocol--you're probably still using a rotary phone. The phenomenon of running phone calls over an Internet connection, through upstart telecom providers such as Vonage, Skype, and Packet8, is growing like mad. There were more than 4.5 million VoIP users in the U.S. last year, and that number will double this year, according to International Data Corp. But while VoIP is a lot less expensive than old-fashioned phone calls, the service hasn't always been so good, and there's been a paucity of features designed specifically for small businesses. Fortunately, VoIP is growing up. Many long-standing concerns--having to do with reliability, sound quality, convenience--have finally been addressed. And scores of new products now make Internet phone systems more powerful than landlines. Here are the six we like best.
Best for… The paranoid
Cool features: VoIP calls are routed over the Internet, which means they can be hacked just like e-mails. That's not a huge problem yet, but such mischief is inevitable, says e-mail encryption pioneer Phil Zimmermann, creator of Zfone. The software, which is available for free download, encrypts and secures your VoIP communications; the only catch is that the person you're calling also has to have it.
In action: Dan Kohn runs FlyDash.com, a website for frequent fliers, without a regular phone, opting instead for his cell phone and a VoIP service on his laptop. Kohn says he's not paranoid, but he hates the idea of some hacker being able to eavesdrop on his conversations. So when he heard about Zfone, he knew he had to have it. He got it up and running in 10 minutes and has convinced a number of business associates to download it so that his conversations with them will be unhackable.
Best for… Road warriors
Cool features: With BroadSoft, the office is never far away. The system can ring up to 10 numbers simultaneously; in other words, if someone calls your office and you're not there, the system will ring your home, cell, car, and any other number you have. It also enables your cell phone to work like an office phone--you can transfer calls to colleagues and connect to co-workers just by dialing their extensions.
In action: Business trips were always a hassle for Cash Doye, mostly because Doye, the CEO of Denver-based NewPrime Home Loans, hates being out of the loop. Checking voice mail a few times an hour was a pain, as was ensuring that everyone knew to call his mobile rather than his office phone. He recently ditched his traditional office phone system for BroadSoft's Mobile PBX. He felt the difference immediately. He was on a business trip in Florida, for example, when a potential investor rang his office; instead of putting the call into voice mail, the system rang his other numbers. Doye took the call and answered the investor's questions on the spot. "He was operating with me as if I was still in the office," Doye says.
Price: About $40 per user per month (includes local and long-distance calls)
Best for… Replacing the receptionist
Cool features: Iotum's software lets your phone know which calls you want to take and which you don't. It also takes the pain out of setting up conference calls by ringing all participants automatically.
In action: Ray Vilis was in a sales meeting when his cell phone started ringing. Damn, he thought to himself, as he mumbled an embarrassed apology. Vilis, vice president of product management and business development for Versatel Networks, doesn't have that problem anymore. Vilis uses Iotum to manage his calls. It monitors his calendar and automatically knows not to ring any of his six phone numbers if he's in a meeting--except for callers he specifies. "Iotum gives me back the switchboard operator, only it costs a lot less," he says.
Price: $5 to $10 per user per month
Best for… Toll-free numbers
Cool features: RingCentral provides toll-free numbers that can easily be tied into your VoIP, cell phone, and fax line. The easy-to-use service, which is hosted on the Web, also provides a range of call-management features.
In action: Charlie Ruddy is CEO of TennisConnect.org, which provides Web-based marketing services to the Tennis Industry Association. Ruddy wanted a toll-free number to better serve his clients. But he was dismayed to learn that an 800 line from an old-school telecom provider wouldn't work with his company's VoIP system. With RingCentral, he got a toll-free number that can be set to ring his office or cell phones and all missed calls go into a single mailbox. He also gets a host of other services, like multiple lines for different departments. The price? "Less than $100 a month, for both VoIP and RingCentral," Ruddy says.
Price: Starts at $9.99 per user per month
Best for… Boosting sales
Cool features: eStara uses VoIP to offer "click-to-call" services. Businesses put a phone number on their online advertising or websites; when potential customers click on the ad, they are connected directly to the company via VoIP. EStara also provides the same feature to customer support centers. Plus, it keeps a record of all incoming calls, creating a database of sales leads.
In action: Todd Walrath, executive vice president of Leads.com, specializes in using the Web to generate business leads for clients. He uses eStara's call-tracking service to track calls generated from clients' ads on sites such as Yahoo and Google. Not only is it cheaper than purchasing a new toll-free number for each promotion, but customers can also check their logs in real time to see who has called in and from where--and not just the calls they got but the calls they missed. "What's really cool is that we can use the Internet to drive consumer demand through the existing phone network, which everyone has," says Walrath.
Price: $2,500 to $10,000 a month, depending on call volume and sales conversion rates
Best for… Growing businesses
Cool features: It's a fully functioning VoIP system designed specifically for small companies. And it comes in one easy-to-use package--with VoIP phones plus all the back-end networking equipment.
In action: Michael DenBlaker's outsourcing consulting firm, Graypeak Partners, had grown to more than 10 employees, one VoIP phone line at a time. But while routing calls over the Web was cheap, it was increasingly inconvenient. Not only did the firm lack a main number, but employees weren't connected to one another and transferring calls was impossible. "We looked like a schlock organization," DenBlaker says. So when Linksys introduced the System 9000 in March, DenBlaker jumped. Now he has his main line, people can transfer calls or forward them to their cell phones, and it's easy to add numbers as he adds employees. "It makes us seem like a bigger organization than we are, and it's easy to manage," he says.
Price: $580 to $3,700, depending on the number of lines and phones