Best Business Phone Systems of 2020

Update: This page has been updated with information on 8x8's new API capabilities.

Business phone systems no longer serve as a tool for simply making and receiving calls. Today's unified communications systems allow employees to communicate by phone, video, and text, which is giving businesses the flexibility to connect with customers and clients in any way they prefer. The business phone system market has grown by leaps and bounds in recent years, with dozens of options to choose from, which makes finding the solution that's right for your business a difficult task. To help in the search process, we researched and analyzed more than 75 providers. Our best picks are below, as well as a comprehensive list of phone system and unified communications providers in case our choices don't fit your needs. To learn more, read our guide on choosing a business phone system.

Today's business phone systems offer much more than just a way to make and receive phone calls. Many of today's solutions, including some of our best picks, are considered unified communications systems.

Instead of focusing solely on a business's calling needs, unified communications systems support all of the ways employees now communicate with customers, clients and co-workers. This means not only traditional phone calls, but audio conferencing, video conferencing, instant messaging, online faxing and text messaging.

While many organizations offer these services to their employees, each component used to be provided by a different vendor. A business might have had one provider for its phone system, another for its conference calling and a third for its video conferencing. Unified communications systems tie all of that into one platform.

These are the main components of a unified communications system:

• Phone calls: This is traditional phone service that allows employees to make and receive calls. Most providers offer a local and toll-free number.
• Conference calling: Unified communications systems include a conference bridge that allows each user to host their own conference calls. The number of people who can be on a call at one time depends on the provider. Some systems allow conference calls with 5-10 people, while others allow for hundreds of people at one time.
• Video/web conferencing: This allows employees to host video meetings with video conferencing hardware, or through a computer equipped with a camera and microphone. Employees can host meetings and see others' faces on the call. In addition, most of these services allow screen sharing, which lets everyone in the meeting view documents or presentations together. The number of participants who can be on a video call at one time varies by provider. It could be just a handful or as many as 100.
• Instant messaging: Many unified communications systems provide the ability for employees to instant message each other. By logging in to the system, they can send messages back and forth to ask questions and collaborate on projects.
• Text messaging: Since texting has become so popular, some solutions allow you to send text messages from your business line. This allows you and your employees to send text messages to customers without them seeing your personal numbers.
• Faxing: These systems allow you to send online faxes rather than using a dedicated fax machine. You can send a fax to a recipient's email or fax machine from the platform.

Having all of these tools on one platform can make communication much easier for employees, making them more productive in turn.

Cloud-hosted systems have really driven the expansion of unified communications systems. Instead of paying tens of thousands of dollars for an on-premises system that houses all of these features, you can get all of this through a cloud-hosted service for a low monthly, per-user fee.

There are multiple factors to consider when choosing a business phone system provider. First and foremost, you want to ensure the system has all of the functions and features your business needs. Can it support the number of employees who need the service? Does it have all of the features your business relies on or would benefit from?

While some businesses only want standard calling features like caller ID and voicemail, others want added functions like ring groups, automated attendants and on-hold music. Also consider any other communication tools your business needs. Are you strictly looking for a system that allows you to talk over the phone, or are you in the market for more of a unified communications system that adds functions like video conferencing and instant messaging? Your answer to this question will guide you in your search for a new business phone system.

Another factor to consider is a business phone system's reliability. A phone system is of no use if it isn't always up and running when you need it. This is especially important for a cloud-hosted solution. Be sure to ask each provider what its annual uptime percentage is. If it isn't 99.999%, find out what the company is doing to correct the issues. In addition, be sure to ask about its service-level agreements and if it has any uptime-related clauses. Many business phone system providers will give users money back if the system doesn't hit a certain uptime percentage.

If cloud-hosted systems aren't a fit for your business, you need to find a phone provider that offers on-premises systems. With an on-premises system, instead of all of the PBX equipment being hosted in the cloud, your business houses all the equipment. These systems have more upfront costs but not many of the ongoing monthly fees that cloud-based systems do.

Very small businesses may want to consider whether they need a true phone system with onsite desk phones. Businesses that can get by with just mobile phones will want to look into a virtual phone system. These systems connect a main business number to mobile phones. When someone calls the main business number, they are greeted by an automated attendant that can transfer them to different employees or departments. Those calls are then transferred to the employee's mobile phone instead of a traditional office phone. Virtual systems are a good fit for very small businesses, businesses with a large remote workforce and solopreneurs.

Finally, what type of customer support does the company offer? If you don't have a full-time IT staff that can handle any issues, you want a business phone system provider that will be available to answer questions when you have them, preferably through multiple channels and online resources.

Today's business phone systems offer dozens of valuable features for small businesses. This is one of the true benefits of the cloud-hosted system. Cloud-based phone systems have opened the door for small businesses to access all of these features without spending a ton of money. Previously, only larger businesses could afford feature-rich systems because of the capital required to install all of the necessary equipment.  

Some of the features that small businesses may benefit from are unlimited calling, automated attendants, ring groups, voicemail, voicemail-to-email, call recording, extension dialing, call forwarding, call queues and integrations with services like Microsoft Office.

These systems also offer features that can boost a business's collaboration abilities, such as video conferencing, instant messaging, presence indicators and online meetings. 

In no short order, the number of businesses opting for a cloud-hosted business phone system has grown tremendously. While many businesses were previously skeptical of moving their communications platform to the cloud, those fears of bad connections and spotty service seem to have gone by the wayside. 

New research from Statista shows that the market for VoIP cloud-hosted systems is projected to outpace on-premises systems for the second straight year in 2020. The gap between the two is only expected to widen over the next five years. By 2024, the study projects the VoIP hosted market to surpass $13 billion, compared to only $9 billion for on-premises solutions.   

As more businesses turn to cloud-hosted systems, making sure these unified communications solutions are properly secured will continue to be a priority in 2020. Mitel is one company that put a renewed effort into its security practices in 2019. To ensure their systems are HIPPA and SOC 2 compliant, the unified communications provider has begun hosting its cloud VoIP system on Google Cloud. Knowing the importance today's consumers put on online security, we expect other business phone system providers to work to make sure their solutions are free from prying eyes.  

Another trend we expect to see more of in 2020 is an increase in the number of business phone system providers offering built-in customer relationship management (CRM) solutions. Many phone systems already integrate with other CRM software, but some unified communications systems have begun including CRM functionality as part of their core offering. Nextiva is one example. Its business communications suite gives all users, regardless of the service level they select, the ability to tap into a number of CRM features, such as call pops, sales pipeline management tools, contact management and account history information. 

With many businesses looking to consolidate the number of programs they are using, it will be a surprise to us if more providers don't follow suit and start adding their own built-in CRMS solutions.

Q: What kinds of businesses benefit most from a good phone system?

A: All businesses can benefit from a good phone system. That doesn't mean that all businesses benefit from the same type of system, however. Communicating with your customers and clients in a professional manner is critical for businesses today. That's why relying strictly on mobile devices can cause problems for some businesses. You want to give your customers a great impression of your business. A greeting from an automated attendant is a great first step; it shows that your business is a legitimate operation.

That's why businesses that don't need a traditional office phone system should consider investing in a virtual phone system. These systems allow businesses to present that professional image while still relying on their mobile devices as their main communication tool. Virtual systems include automated attendants and a host of other valuable features. In addition, when you make outbound calls, your business number, not your mobile number, is displayed to the person you are calling.

For larger businesses, business phone systems not only allow you to present a professional image to your customers, but also give your employees all of the communication tools they need to get their job done. Access to mobile apps, which allow them to take their business lines with them wherever they go, and video conferencing services ensure your staff can connect with anyone, regardless of where they are and how they want to communicate.

Q: What is unified communications?

A: Unified communications is the ability to access all of your communication tools from one platform. Many of today's business phone systems are unified communications systems. While these systems still offer traditional phone service, they also include other communication tools that professionals now rely on.

The additional features in unified communications services include audio conferencing, video and web conferencing, instant messaging, and text messaging. Previously, in order to use all of these communication tools, organizations had to use a different service provider for each. Unified communications streamlines the process by allowing you to access all of these tools from the same provider. This not only boosts production among employees, but can also be a significant cost-saver for businesses.

Q: What is the best business phone system?

A: Since every business is different, it is hard to say that one business phone system can fill everyone's needs. That's why our recommendations for the best business phone systems are based on different use cases, like best for small businesses, best for remote employees and best for call centers.

For each use case, we looked at the functions and tools those types of businesses would need from a business phone system. We then compared and contrasted the various phone system providers based on those criteria.

After our research, we recommend 8x8 as the best business phone system for small businesses, Ooma Office as the best business phone system for very small businesses, RingCentral as the best business phone service and Grasshopper as the best virtual business phone system.

You can read specifics on each selection in our in-depth reviews, and you can see more details on how we selected them below in our Methodology section.

Q: When is the best time to invest in a good phone system for your business?

A: In today's highly competitive market, there isn't a bad time to invest in a business phone system. There are so many providers out there trying to land customers that they are always offering some sort of discount or incentive to sign up. This could be a few months of free service, free phones or discounted rates.

That being said, we have noticed a lot of providers seem to ramp up their incentives near the end of each quarter. As they close their books on each quarter, most providers want the best numbers possible, so they look to anything they can to add some more clients before the month flips over. You might want to consider that timing before you start talking to providers.

Q: What is the difference between a business phone service and a business phone system?

A: There aren't many differences between a business phone service and a business phone system. Both provide you with all the tools you need to effectively communicate with those inside and outside of your office. 

To judge business phone service, you are looking at how well the system runs. Is the phone service reliable? This is especially important for cloud-hosted PBX systems. Traditionally, business phone services were all based on landlines. Reliability was rock-solid because everything was hardwired, and you weren't dealing with the internet. Today, as cloud-hosted PBX business phone systems have become increasingly popular, finding a business phone service that offers the same level of reliability as a landline system has become crucial.  

One of the key factors in determining reliability is uptime statistics. Uptime refers to how often a cloud-based phone system is down. One of the most important elements of a business phone system is that you can pick up the phone and make a call whenever you need to and that whenever someone is calling you, they are able to get through. The best business phones services and systems have uptimes of 99.999%. This means that service is down for just a handful of minutes each year. Some business phone service providers go as far as to guarantee their uptime – if it ever falls below a certain threshold, they will reimburse you.

At Business News Daily, we are dedicated to finding the best products and services for small businesses. We know that your time is limited, and we invest hours into research and testing so you feel confident about our recommendations. 

Each year we update our best picks and use cases, and when we do, we investigate new changes and companies in the industry, and we thoroughly scrutinize both new and existing products and services. Our process also involves revisiting companies we previously selected as best picks to evaluate whether they still are the best in their category. 

In addition to our business phone system recommendations this year, we have reviews of companies we previously selected as best picks:

• Mitel: Best for Call Centers

To help you find the right business phone system, we researched and analyzed dozens of options. Here is a roundup of our 2020 best picks for business phone systems and an explanation of how we chose them.

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Locating the Best Services

To determine the best business phone systems, we started by listing all of the vendors that have good reputations online (i.e., services that other websites favorably and consistently reviewed). Next, we interviewed small business owners to learn which systems they use and like. If they named a new system not on our list, we then added that company to our preliminary list. Overall, we considered nearly 80 different phone system providers. (See our full list of business phone systems and their websites below.)

Choosing the Best Services

We settled on these 23 phone systems to consider as best picks: 8x8, AT&T, Avaya, Cisco, Comcast, Dialpad, Digium, ESI, eVoice, FluentStream, FreedomVoice, Grasshopper, Intermedia, Jive, Mitel, Nextiva, OnSIP, Ooma Office, Phone.com, RingByName, RingCentral and Vonage.

Researching Each Service

Next, we researched each provider by investigating its services, watching tutorials and how-to videos, and reading user comments. We also contacted each company's customer service department posing as business owners to gauge the support each provider offers. Finally, we considered the pricing that was viewable on these services' websites or what they quoted to us during customer service calls. We analyzed each system based on these factors: deployment options, level of service, reliability, customer service, calling features, collaboration tools, mobility options, cost, and Better Business Bureau accreditation, ratings and complaints.

Want to learn more about choosing the best business phone system? Check out our full coverage here:

• Business Phone Systems Buying Guide
• What Is SIP Trunking?
• What Is PBX? 
• What Is a Virtual Phone Number? 
• What Is Cloud PBX?
• VoIP vs. Landline: Which Is Best for Your Business? 
• How to Choose a Softphone App
• Should You Get a Cloud-Based Phone System? 
• Which Multiline Phone System Is Right for Your Business?
• How to Choose a Four-Line Phone System
• Which Cloud-Based Phone System Is Best for You?