Popularity of the virtual office gains momentum

March 10, 2010 11:21:09 AM PST
Working from home is nothing new, but managing a business with employees scattered across the country has only recently become possible with new software and management techniques.

A sip of water and Dan Guillory is ready for the short commute to his office -- a commute that covers the few steps from his kitchen to his laptop on the dining room table. Telecommuting is nothing new, but that means doing work you normally do in the office at home. However, some businesses are doing away with the office altogether.

"We were realizing we spend a lot of time out at our client sites, but not necessarily a lot of time in our physical offices," said Guillory.

Guillory is CEO of Innovations International, a consulting firm that conducts seminars on diversity, leadership and creativity for business. A few years back, he traded in his expensive office space in San Francisco for a virtual office in his home. Now, a laptop, Internet connection and cell phone allow him to manage staff in the Bay Area and Utah as well as independent contractors all over the country, for a fraction of the cost of a brick and mortar office.

"Rent alone was $60,000 a year. In addition to that we also had hard line phones that we used; we also had servers that we used. There are a lot of hidden costs that you don't necessarily think about," said Guillory.

Hard numbers about the number of virtual offices are difficult to come by. However, the Labor Department reports that between 13 million and 19 million Americans do most of their work at home. That has been made possible by software that enables video conferencing, e-mail and Internet faxing. But many virtual offices still want to sound like they have a staff and office suite. That is where a phone service like San Mateo-based RingCentral comes in.

"Small business wants to appear like a large enterprise. They like the idea that if someone calls their office, it's got the feel and sound and ambience of a larger company," said tech analyst Rob Enderle.

Obviously some businesses, like manufacturing, can't go virtual. But for many small to medium-sized businesses it is a growing trend.

"The benefit is that you have more flexibility, but at the same time our expectations are a little bit different so there's a price for that freedom to some extent," said Guillory.

Translation: There is no one looking over your shoulder, and no time card to punch. But since you can set your own hours, failing to produce is not an option.

The innovation of cloud computing has been a big help with virtual offices since they don't have to buy servers, routers and other hardware. Businesses only pay for the services and bandwidth they use.


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