RingCentral recently announced that it is adding VOIP to its line-up, signalling more movement in the hot telephony market for small businesses. RingCentral's main offering up to now has been a virtual switchboard for small businesses.\u00a0 That means they provide a software-based auto attendant to answer calls, phone extensions that can be administered from a computer dashboard, Internet fax and similar features. The virtual switchboard is a service that overlays on top of your existing phone service -- the point being, you still needed to have basic phone service from your phone company. Now RingCentral offers a low-cost VOIP service, called DigitalLine. According to Jay Blazensky, Vice President, RingCentral's voice over IP uses your broadband connection to allow you to make phone calls over data lines instead of traditional phone lines. They offer several plans, including an unlimited call plan for the U.S. and Canada. For phone equipment, you have three options with DigitalLine. (1) You can download software from RingCentral and use a headset with your computer to make calls.\u00a0 (2) You can get an adapter for your existing analog phones. Or (3) you can buy Linksys VOIP phone sets by Cisco. With this VOIP offering the company says it is positioning itself between low-end VOIP providers such as Vonage that provide cheap long distance but few advanced call-management features that businesses need, and other virtual switchboard providers that give an advanced business phone presence. Now one company offers both the virtual switchboard services and underlying VOIP phone service. I\u00a0don't think this combo is a category killer (as it entails switching from your current phone company, which some businesses will be disinclined to do because switching anything involves extra effort), but it offers another option for those intent on cutting long distance costs. During the late 90s RingCentral was owned by Motorola.\u00a0 Fast forward to September 2007, where\u00a0Motorola is out of the picture and RingCentral closed $12 million in series A funding from two of Silicon Valley's top venture capital firms, Sequoia and Khosla Ventures.\u00a0\u00a0That move alone should give some idea of how heated up the telephony market is.