Cloud Services Hasten The Rise of The Virtual Company

Rimon Law Group calls itself a Web 2.0 legal firm. It employs 28 senior lawyers in seven U.S. states but has no offices, thanks to cloud computing services from companies like RingCentral that are helping to change the face of businesses across the globe.

For Rimon, the choice to go virtual was easy.  The average price per office per associate in downtown San Francisco is $10,000 annually, a waste of money since most of lawyers never see clients in their offices anyway, says Yaacov Silberman, the California-based co-founder of Rimon Law Group. What’s more, it is easier to attract the best people if employers can promise a better quality of life by allowing people to work from home and easily pick up and move from place to place without fear of losing their job, if, for example, their spouse is transferred, he says.

Since its creation in 2008 the virtual law firm has sucessfully lured high-profile lawyers such as Dov Grunschlag, a 30-year-veteran specializing in labor and employment who worked as a professor of law at the University of California’s Davis campus and served as law clerk to Chief Justice Roger Traynor of the California Supreme Court, before entering law practice.   Other Rimon Law attorneys include seasoned Silicon Valley attorney Fred Tsien and  Martin Goodman, a  lawyer with 40 years experience specializing in creditor’s rights, who has worked for banks such as Citibank and credit unions.

Rimon and other professional services companies, such as Innovations International, a 25-year-old U.S. consulting firm, are using a combination of cloud computing technologies to slash costs,  put on a professional face for clients and transform themselves into virtual organizations. 

Distributing computing tasks and storage to remote servers across the Internet, rather than to desktop computers or an organization’s own servers, is referred to as moving to the cloud.  In the case of communications services, it means replacing electronic switching systems hardware known as private branch exchanges, which can range in price from several thousand up to hundreds of thousands of dollars , with software that can be easily controlled by any company employee over the Internet, without any training.

Both Rimon Law Group and Innovations International are among tens of thousands of companies now using technology from RingCentral, a seven-year-old San Mateo, California-based company  which was named a 2010 Technology Pioneer by the World Economic Forum and has raised $25 million from the likes of venerable Silicon Valley venture capital firms Sequoia Capital and Khosla Ventures.  RingCentral’s software is changing the cost structure for business phone systems  to as low as $10 a month and is delivering those services in the U.S., Canada and the U.K.

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RingCentral’s pitch is resonating with clients who are eager to slash costs and ensure that they don’t lose business when executives are on the move. The company’s cloud-based technology “is a great equalizer that allows very small companies to come across as a fully professional entity to their customers and similarly companies of any size can just be more accessible to their customers anywhere in the world,” says RingCentral chief executive Vlad Shmunis, a native of the Ukraine who now lives in the U.S.

The market for this type of cloud- based unified communications services is projected to be worth $1.6 billion by 2016 in Europe alone, says Dorota Oviedo, a research analyst in the Warsaw office of Frost & Sullivan. It is no surprise then that a number of newcomers are targeting the space, including Poland’s Edge Solutions. Edge has a cloud-based offering called IntraOut which provides mobile phone  synchorization, email, business grade instant messaging, high definition VoIP, groupware , teleconferencing and videoconferencing.

Unified communications are only one of a number of software services that are being delivered by the cloud. Other services include email, customer relationship management, human resources and executive search, application development, storage and security. Innovations International, for example, says it is using RingCentral instead of a private branch exchange, Google apps for email and calender functions and technology from Egnyte for cloud-based data management.  Combined, cloud based services are projected to grow globally from $14 billion in 2009 to $33 billion in 2013, according to research firm IDC.

A 2009 IDC survey  of 75 British companies with 250 0r more full-time employees found that 47% of  companies are already using some cloud services in two or more areas and 16% are using them in seven or more areas.  Expect that number to mushroom as more and more services move to the cloud, says David Bradshaw, IDC’s research manager for cloud services in Europe.

Both small businesses and large enterprises are interested in unified communications being delivered as a cloud service, since it represents a cost savings and eliminates the headache of managing and integrating multiple applications and vendors,  says Frost & Sullivan’s Oviedo.

RingCentral’s services include multi-extension business phone systems with an auto-receptionist that professionally answers, greets and directs callers to the right department or person. Each employee can define how they want to automatically route calls to their home office or mobile phones, based on the time of day and availability. Users can also make calls from their iPhone while on vacation and make it look like the call was placed from their office. And, Internet fax capabilities convert incoming faxes to PDFs, making them immediately available to distribute to team members to view, forward and file electronically.

Click here to see a video explaining how RingCentral’s service works.

Phone companies see such services as a compliment, rather than  competition. That is why AT&T and ClearWire have both partnered with RingCentral to distribute the service in the U.S., says Shmunis.  In Britain, RingCentral worked with BT in 2008 to offer services to BT’s small business customers with cloud based phone systems. RingCentral said the partnership was disbanded due to strategy and other changes at BT.  In a written reply to a question from Informilo BT said it “did indeed have a commercial partnership with RingCentral however, after a performance review, we decided to discontinue the relationship.”  RingCentral is now directly servicing the UK small business market via its own local web site,
 
Shmunis, a seasoned entrepreneur who sold a telecommunications company he co-founded called RingZero Systems to Motorola in the late 1990s, remains optimistic about RingCentral’s international expansion and says he also sees huge growth opportunities for the company in the U.S.. Since one half of the work force in the U.S. is employed at businesses with 100 people or less Shmunis believes there are well over 10 million potential businesses that could be customers of such services in the U.S. alone.

 

 

 

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