The Best Business VoIP Providers and Cloud PBX Services of 2017

We test and compare four business-class, hosted voice over IP (VoIP) solutions that bring the features and reliability of enterprise-level Private Branch Exchanges (PBX) to small to midsize businesses.

Cloud-based applications have upended the way we used to do business and the multitude of ways in which we can interact with customers. Online collaboration toolsand4 social media platforms give users a direct line to your company and can be immensely helpful in quickly communicating with customers and resolving issues. However, no matter how many apps and new technologies you throw at a problem, nothing beats a good 'ol fashioned conversation.

Where business interactions are concerned, several conversations are even better. Especially when data from those calls is saved, analyzed, and then parsed to any front- or back-end business application that can use it. The only way to do that is to integrate a flexible voice-over-IP (VoIP) telephony system with your customer-facing, back-end systems, especially customer relationship management (CRM). Having an IP-enabled and feature-filled telephone system is still highly important for any business, particularly one that's capable of being fully integrated into your sales, marketing, and general business initiatives at a software level.

A key indicator that the phone is still a must-have is the helpdesk industry. According to multiple vendors of helpdesk and IT service desk software, their customers report that the telephone is still the most popular method for their users to reach out for support even when email, social media, and live chat options are enabled. They also report that this trend isn't likely to change anytime soon, as shown in the infographic below.

But even with this realization, you have a multitude of choices. Larger businesses need to select between on-premises Private Branch Exchange (PBX) hardware and hosted solutions, weighing their potential benefits (i.e., advanced functionality and total customizability) against associated costs. Small to midsize businesses (SMBs) need to make that same choice, but also weigh their current needs and budget against what they expect those needs to become in the future. As telephony technology continues to evolve and integrate with other types of software, especially cloud services, CRM and marketing automation solutions in particular will become key. For many, the cost of a traditional PBX system may not only be beyond the reach of their current operating budget, but may also not make much long-term sense.

Furthermore, when you're starting or running a small business, you need to be devoting the majority of your time and efforts into your core business in order to succeed. Wasting time on purchasing, implementing, and managing infrastructure can be extremely costly, both in capital outlay and time removed from building the business.

Traditionally, small businesses would rely on a local telco for basic business phone needs, using something like a CENTREX system. But today, those systems have become antiquated and do not mesh well with the needs of a modern business—especially for emerging trends such as integrating mobile phones, enterprise social networking, texting, leveraging call center and call queuing software, web video conferencing or dozens of other features that can streamline processes, promote collaboration, and accelerate growth.

Fortunately, there are many more options available today in hosted PBX solutions that bring the features and reliability of an enterprise-level PBX to SMBs. In order to provide a guide to these solutions, we've pulled together eight of the leading hosted PBX solutions representing a range of features and types: 8x8 Virtual Office Pro, Citrix Grasshopper, Dialpad, Fonality Hosted PBX, Microsoft Skype for Business Online, RingCentral Office (for Business), ShoreTel Connect Cloud, and Vonage Business.

We also attempted to include VoIP solution provider Nextiva in this roundup, but oddly, the company didn't respond to any of several attempts at contact. This was more than a little puzzling for a company that ostensibly specializes in business communications.

Modern Features of Business Phone Systems

The eight VoIP solutions we did test cover a wide range of features and options. Some, such as Fonality Hosted PBX and RingCentral Office (for Business), are geared towards larger businesses, and offer high-end enterprise features, but they offer rates that fit into SMB budgets. Others, such as Citrix Grasshopper, are very much geared towards the smaller end of the SMB market and provide the basics of a modern phone system—without the need for any on-premises equipment or even fixed phone lines and, though limited in features, are extremely cost-effective.

On the higher end of this space, hosted PBX providers such as RingCentral Office and Fonality Hosted PBX will generally require some on-premises hardware such as specific desk and cordless VoIP phones preconfigured to work with the hosted PBX service. These phones connect to the provider over the Internet and function exactly as you would imagine a business phone should, but the phone system running those phones is located in the cloud rather than the telco closet in the basement. Self-service management and configuration of these systems generally occurs through a web-based portal, and can include a long list of potential features. For SMBs, the most commonly important features you should be considering include:

Interactive Voice Response (IVR) systems, "Press 1 for accounting, press 2 for the White House..."

Call queuing, generally used in call centers, where systems like this distribute incoming calls to specific recipients based on what the caller wants, extensions dialed, or other criteria.

Hold music or audio, which should have not only a good list of options offered by the service, but also the ability for you to upload custom music or audio.

Extension assignments, meaning an administrator on your side of the relationship should be able to assign internal extensions as desired.

Number porting so you can use your current business phone number with the new service (important for folks who pay for 800, 888 or similar lines).

Call recording so you can use phone experiences for training, sales, and marketing intelligence purposes.

Voicemail to email transcription so your employees can read or play their voicemail from wherever they receive email.

and a whole lot more, read on.

In some cases, providers will offer on-premises Public Switched Telephone Network (PSTN) connectivity through hardware that is connected to analog or digital phone lines from the local telco, and connected to the business network. This allows a business to continue to use local phone lines with their hosted PBX solution and may be of significant benefit to businesses that have a requirement to maintain local wired lines.

Furthermore, most (if not all) providers also offer smartphone integration with custom and third-party apps, like CRM systems that can extend the phone system beyond just basic voice communication. Such integrations can also allow users to transfer calls to and from their mobile phone, place and receive calls from their personal phone (that appear to be coming from the business), and interact with colleagues and customers via voice and text.

The Right Internet Connection

Most of these VoIP solutions will require stable and consistent internet connectivity at every location where the wired phones are to be used. In many cases, standard business-class Internet service with suitable bandwidth will suffice, though the use of Quality of Service (QoS) configuration on a business-class Internet router may be necessary to prioritize voice traffic over other Internet traffic in order to maintain good call quality. Some hosted PBX providers offer assistance with this type of configuration on existing customer hardware, assuming that hardware can support QoS configuration. Other providers will sell a specific piece of network hardware with the proper QoS configuration for the business to install that will ensure that call quality is prioritized.

Either way, the quality and functionality of a hosted PBX with VoIP service will only be as good as the internet service at the business location. If this service is not sufficient, a VoIP solution may not be possible. Some hosted PBX providers do offer dedicated circuits that can be installed to directly connect the business to the provider, but those are generally quite costly. Fortunately, there are other ways to use hosted PBX solutions without requiring internet-connected phones.

Some providers, such as Citrix Grasshopper, offer a solution that doesn't use VoIP at all. They are essentially just simple PBXes that consider existing phone lines to be extensions and route calls that way. For instance, you might have a main number that delivers callers to an IVR system and, when the caller dials an extension or selects a destination such as "Sales" or "Support," the hosted PBX calls an existing landline or mobile number and connects the two calls. The caller is unaware that they have connected to a completely different phone number, as the system looks and functions like an in-house PBX with call forwarding, transfer, hold music, IVR, and so forth.

The extensions in this case could be Plain Old Telephone System (POTS) lines, mobile phones, or even VoIP phones through a different provider. All the hosted PBX cares about is that, when a certain extension is selected, a call is placed to the phone number assigned to that extension. This sounds basic, but it's a tried-and-true technology that can make businesses of any size and budget look as if they are using enterprise-grade phone software—without the need to invest in heavy-duty PBX solutions or dedicated desktop phone hardware.

Placing outbound calls with a system like this is typically done by first registering a specific phone with the provider for outbound calling, and then dialing a specific number to then place an outbound call to the desired number. This method is made far simpler by using a smartphone with the provider app to place outbound calls.

Optimize Your Network

In addition to making sure your Internet service can handle your VoIP traffic, you also need to make sure your local area network (LAN) can handle it. What makes it tricky is that if you simply drop VoIP onto your network, that traffic will get processed the same as any other traffic running across your LAN, like your shared accounting application or those 20 gigabytes worth of files your assistant just stored in the cloud. The problem there is that VoIP traffic is much more sensitive to network bumps and potholes than most general office traffic. That translates to the sound breaking up or cutting out entirely, difficulty connecting over WiFi, or (worst case) dropped and lost calls.

Fortunately, most of the providers reviewed here have engineering staff that will contact you as part of your setup process to help your IT staffers test and optimize your network prior to deploying their solutions. That's definitely something we recommend, but there are steps you can take now to prep your LAN for VoIP and make the deployment process that much easier.

Understand QoS: Quality of Service is the primary mechanism for keeping VoIP traffic flowing smoothly. It prioritizes specific traffic on your LAN ensuring that certain streams (in this case the VoIP traffic) get priority and always have a certain percentage of the overall pipe available to them.Codecs: Have your IT staff familiarize themselves with the codecs being used by the VoIP system you're considering purchasing. Usually you'll have options, meaning multiple codecs to choose from. Testing these out during your evaluation period will let you pick the best codec for your environment.

Network Monitoring Tools: If you've got a LAN with more than 10 users, then you've likely hired at least one IT staffer and that person is using some kind of tool to monitor that network, including not just the health of connected devices, but also the kinds of traffic flowing over it. Prior to deploying your VoIP system, it's a good idea to make sure the tools currently being employed can also effectively monitor and manage VoIP traffic using common management protocols like SNMP or outright packet sniffing.

Once you've engaged with a VoIP provider, their engineers will help you determine the overall service grade of your network (look at that as your network's basic "VoIP readiness factor") and how to tweak their service to run effectively over your infrastructure. If it turns out you need to upgrade some of your local networking infrastructure, this process will determine that, too, so wait for it to complete before dropping any dollars on new routers or switches.

What Is SIP?

SIP stands for Session Initiated Protocol, and you'll bump into it a lot when evaluating solutions or testing your network for VoIP readiness. It's important because, for the most part, it's the de facto standard you'll be using every time you have a VoIP conversation. When VoIP first entered the scene, equipment manufacturers and software developers, especially for the largest enterprise players like Cisco or Nortel, developed their own proprietary protocol standards. They did this in part because it was easier, but also partly to keep customers "trapped" on their systems.

Once you were up and running on a proprietary VoIP protocol, switching providers meant a complete "rip and replace" where both hardware and software would have to be switched out. This not only drove up costs, but also meant customers would lose their investment in the previous solution. As VoIP grew in popularity, small vendors building cheaper and more easily managed solutions began settling on SIP as the most oft-used protocol allowing easier communication between systems. Still other VoIP protocols still exist, with perhaps the second-most popular being H.232.

What makes SIP so popular is not only that it's deep and flexible, but also because it was purpose-built to engage in multimedia (meaning not just audio but also video and even text) communications over TCP/IP networks. For VoIP calls, SIP can set up calls using a number of IP-related protocols, including the Stream Control Transmission Protocol (SCTP), the Transmission Control Protocol (TCP), and the User Datagram Protocol (UDP), among others. But it can also handle other functions, including session setup (initiating a call at the target endpoint—the phone you're calling), presence management (giving an indicator of whether a user is "available," "away," etc.), location management (target registration), call monitoring, and more. Despite all that capability, SIP is simple compared to others VoIP protocols primarily because it's text-based and built on a simple request/response model, and is over very similar to both HTTP and SNMP. Yet, it's still capable of handling the most complex operations of business-grade PBXes.

SIP is built to work on a peer-to-peer (meaning computer to computer) basis. In SIP-speak, the two points are called the "user-agent client" and the "user-agent server." Remember that those are swappable, meaning that unlike other client-server protocols where the client is always the client and the server is always the server. In SIP, the endpoint making the call is the user-agent client initiating the traffic and endpoint receiving the call is the user-agent server receiving the call. If the call order is reversed, the client-server nomenclature is reversed as well. That adds a lot of flexibility, but it also means every endpoint needs to be able to perform both roles – server and client.

There's a long list of additional network elements to a full SIP solution, but two important ones are the proxy server and the gateway. The proxy sever helps lighten the functional requirements of SIP endpoints. It also acts as both client and server, but it adds functionality around call routing and policy-based management. SIP gateways are the closest analogy to an old-style PBX network in that they can handle the routing and connectivity requirements for connecting SIP calls to other networks. Typically, the advanced features of the VoIP vendors we review here are largely based on the proprietary management technology they build into their proxy servers and gateways. By offering VoIP solutions where these (and more) elements of a SIP solution are hosted in the cloud, the providers reviewed here have more flexibility in building advanced features since they have more control over deployment and reliability.

Look for Extended Functionality

Some hosted PBX providers, such as Fonality, also offer extended services such as call center features. These can be used to design intricate and complex call routing and call management scenarios for important queues, such as sales and support with extensive queue and time-to-answer service level agreement (SLA) monitoring and reporting capabilities. Some also offer voicemail transcription, fax services, and other communication integrations such as the ability to integrate a CRM application with the PBX to enable one-click outbound calling and retrieval of customer records or other information when a call comes into the system.

Just about anything you can picture a business needing from a phone system can be delivered by a hosted PBX solution—and generally at a cheaper price than purchasing and maintaining your own on-premises PBX. It's just a matter of selecting the right solution for your business

The Best Business VoIP Providers and Cloud PBX Services of 2017