The $50-billion global business communications market is ripe for disruption from the cloud. Older on-premise phone communications systems no longer meet the needs of a highly mobile and distributed workforce. People simply aren’t tethered to their desks anymore, so organizations need to adapt by changing the way they enable workers to communicate.

Desktop phones in the workplace are just now starting to give way to more cloud-based apps installed on smartphones and tablets. Today, it’s all about enabling communication via any device, anywhere. The growth opportunity in this segment is vast because less than 5% of all businesses today have switched over to cloud-based phone systems. In the U.S. alone, the replacement market for legacy PBX systems is estimated to be worth $15 billion.

In addition to better enabling mobility, there are several other advantages to switching over to a cloud-based communications system. First off, the cloud is cheaper. Large organizations typically save anywhere from 30% to 60% by getting rid of their PBX systems, which are expensive to purchase (costing anywhere from $5,000 to several hundred thousand dollars depending on the size of the deployment) and maintain. Second, cloud-based systems are easy to install and operate. Third, integration with outside applications via the cloud increases worker productivity. In addition, it’s easier (and less costly) to send out system updates through the cloud, as opposed to organizations having to purchase pricey PBX upgrades.

RingCentral (RNG) is one business communications disrupter I am keeping an eye on. Its flagship RingCentral Office product (representing about 75% of the company’s recurring subscription revenue) is seeing solid success when it comes to replacing on-premise phone systems (from competitors including Cisco Systems, Avaya and ShoreTel) because it easily and efficiently moves business communications to the cloud—offering everything from screen sharing to collaboration and video conferencing over all types of mobile devices.

RingCentral is constantly innovating to keep its platform fresh. One feature allows an assistant or manager to tap into an active call and relay a message to one party without the other person on the call hearing anything. The so-called whisper feature is useful for relaying important developments, on-the-fly directions/suggestions, constructive ideas and sales tips. For example, with this feature a sales manager can remotely monitor a live call between a customer and a sales rep, coaching a rep through a tricky deal closure or complaint.

RingCentral uses acquisitions to help bolster its technology toolbox. The company just completed the purchase of Glip, a team messaging and collaboration tool that works with many third-party business applications—including Box, Dropbox, Evernote, Google Drive and Zendesk. Glip features built-in task and project management capabilities. IBM, CBS Interactive and Harvard University are included among Glip’s customer base. By the end of this year, Glip will be fully integrated into RingCentral Office, providing the first complete cloud-based business communication/collaboration solution across all communication modes.

RingCentral has more than 300,000 customers, including Subway, Box, Lyft, New Relic, Twitter, Intuit and Century 21. Customers pay on a monthly basis, giving RingCentral steady and predictable cash flows. More than 90% of each quarter’s revenue comes from existing subscribers, with a 99% net monthly subscription dollar retention rate. RingCentral ended the second quarter with annualized recurring subscription revenue of $274.6 million, up 35% from the year-ago level. Growth in subscription revenue is being driven by a combination of user expansion and increases in average revenue per user (ARPU).

One big positive trend behind ARPU growth is RingCentral’s move up-market to serve a greater number of larger enterprise accounts. In the June quarter, annualized monthly recurring subscription revenue from customers with at least 50 users more than doubled year over year for the fifth quarter in a row. Large deals now represent about 20% of RingCentral Office bookings.

Enterprises are attracted to the fact that RingCentral is an open platform, meaning it’s easy to integrate outside apps (covering sales, support and analytics) into the communications system.  RingCentral’s integration with the Salesforce CRM and Google for Work offerings has been behind several large customer wins. Just announced this summer, complete integration with Microsoft Office 365, the leading cloud-based productivity suite, is already a major factor driving new customer wins. The lack of Office 365 integration had been a gating factor for securing larger accounts, so the new capability should be a major positive from a marketing perspective going forward.

One important win in the second quarter was an 800-seat deal with a leading enterprise mobile infrastructure vendor. It was a complete replacement of a large legacy on-premise deployment across multiple locations and geographies. Integration with Office 365 was a major contributor to the win.

Expanded carrier relationships are also behind RingCentral’s up-market move. The company has co-branded solutions with AT&T (a 10% customer), BT and Telus. AT&T has become a major partner driving new deals, according to RingCentral CEO Vlad Shmunis. In the second quarter, AT&T secured a key win with a large transportation company based in North America covering 5,000 employees in more than 100 locations worldwide; RingCentral is now about 10% to 15% through the deployment process on this account, with completion expected over the next few quarters.

RingCentral is seeing good traction with its new BT and Telus partnerships, both of which launched earlier this year. BT in the latest quarter won a 200-seat contract with a leading recruitment company in the U.K. The deal, which leveraged RingCentral’s integration with Google for Work, could eventually expand to 1,000+ seats over time.

In the second quarter, RingCentral revenue rose 34% year over year to $70.7 million, above the consensus estimate of $68.7 million. Subscription revenue of $64.4 million advanced 35%. Subscription gross margin hit a record 75.1% (up from 74.2% in the first quarter and 69.8% in the year-ago period), putting it in the company’s target range of 75% to 80% for the first time. For the third quarter, RingCentral sees revenue of $74 million to $75 million, representing growth of 30% to 32%.

The company’s latest 2015 revenue guidance range of $288 million to $292 million (growth of 31% to 33%) is up from previous guidance of $283 million to $289 million. With a market cap of $1.33 billion, RingCentral trades at 4.6 times the 2015 consensus revenue estimate of $290.2 million (growth of 32%) and 3.7 times the 2016 consensus of $361.5 million (growth of 24.6%). For 2015, analysts on average look for RingCentral to lose 18 cents a share, with a move into profitability expected next year.

RingCentral went public in September 2013 at $13 a share. While down from the 52-week high of $20.94 reached in August, the shares, recently trading at $18.93, are still up nearly 27% so far this year. During the recent market correction, the stock dipped to a low of $16.65.