If the rapid growth of Ring Central is any indication, small business owners are rapidly moving away from traditional phone companies and moving towards hosted VoIP systems, which piggyback on the internet for carrying phone calls.
Ring Central (NYSE: RNG) is one of the leading companies is this space, and went public in September of 2013. Its growth has been nothing less than spectacular. In 2010, it had revenue of only $50 million. Three years later, revenue had over tripled to $160.5 million.
What’s behind this growth?
- Busines VoIP has greatly improved as a product. While the service has been around for more than a decade, the public perception was the quality of VoIP phone calls wasn’t good enough for business. Better technology and faster broadband access has improved call quality. Ring Central gets great reviews from clients.
- VoIP is a great deal for businesses. For under $30 per user per month, a company can have phone service.
- Lots of spending on marketing. While taking in over $160 million in revenue last year, the company did not make a profit.
Would you like to learn more about the pro and cons of business VoIP? Start Here