Best VoIP Solutions For The Remote Office

A sleek set of IP Phone systems and services promises to better serve remote office workers. Find out which is right for you.

December 1, 2004

16 Min Read
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Most of us believe VoIP can reduce the telephony costs of remote branch offices. What's harder to determine is which kind of VoIP we're talking about. Is this the VoIP that's built around a remote gateway? The VoIP that involves only IP phones in the branch office? Or is it a combination of both? Making an informed choice is difficult because there are so many ways VoIP can be implemented.

To help sort through those branch office telephony options, we asked six VoIP vendors to price out a 20-user branch office with a T1 connection to the main site for voice and data, and two analog lines for local faxing and emergency calling. We collected their responses based on list pricing, analyzed the results, and extracted some hard bottom-line figures

What we found was that no single vendor today offers the ideal branch office solution, though each approach has some of the right elements. ShoreTel offers a distributed architecture that allows remote sites to continue to function together even if a main office fails. Cisco Systems builds VoIP into routers, providing an economical package that's tightly integrated with the data infrastructure. Zultys Technologies' Session Initiation Protocol (SIP)-based architecture allows enterprises to use any SIP-compliant product. Avaya offers a unique approach to ensuring high-quality voice that's well-suited to gracefully transitioning existing environments to VoIP. Nortel Networks and Alcatel's solutions also fare well in this last respect.

Choosing the right architecture requires boning up on the basic branch office VoIP architectures. The differences have less to do with specific protocols and more to do with the amount--and cost--of equipment needed in the remote office. The easiest and cheapest solution for rolling out VoIP to the branch is registering remote phones or softphones with a telephony server in the main office. Fault tolerance can be provided by pulling dual-access lines to the remote premises. Where redundant access lines aren't necessary, too expensive, or just insufficient, network architects can locate a gateway in the branch.Ultimately, emerging hosted services from the likes of MCI will help address the troublesome problem of remote site telephony without losing tight integration with the corporate VoIP architecture. When that happens, network architects will be able to tie the hosted VoIP services at the remote sites to the telephony services at the central office.


One of the best uses for VoIP is in supporting the smallest offices. A few phones can be located at any site without additional CPE. The phones register with a telephony server in the main site over a DSL or cable Internet connection, much as is done with consumer VoIP services such as Vonage.

Admittedly, a similar approach is possible in the TDM world, but it's expensive. Voice architects can tie remote phones back to the main PBX through Off Premises Extension (OPX) circuits provided by the carriers. Those circuits turn the remote phone into just another extension, but at a price. OPX circuits from BellSouth, for example, run $72 per month per location, plus $60.48 for the first mile between the locations and an additional $3.89 for each subsequent mile. It's little wonder that BellSouth now recommends users connect back over DSL.

By avoiding the cost of remote CPE, network architects can shave their per-user costs by hundreds of dollars. Here, SIP-based architectures such as that from Zultys have a big advantage. Today, most major networking vendors offer nominal SIP support, typically with proprietary extensions for advanced functions. The problem is that while third-party SIP phones may work with the telephony server, they'll either do so at reduced functionality, or require a server upgrade to get full SIP functionality.Not so with Zultys' MX250. As an all-SIP-based solution, it lets network architects choose any SIP endpoint. Its own ZIP 4x5 phones bundle in a firewall, router, NAT, VPN, and built-in Ethernet switch for $400. Third-party SIP phones can also be purchased at just about any price point, depending on the feature set desired. This can dramatically reduce the cost of a remote site installation. Instead of spending $300 for a proprietary IP phone, customers can purchase a SIP version for a third of that price.

Attendant consoles can drop those costs even further. Attendant consoles generally cost about a hundred dollars more than a regular phone. Avaya still charges $500 for its software-based attendant console used with its key system replacement, IP Office. However, many IP telephony vendors now build this functionality into the phone, or, as is the case with ShoreTel, bundle it as an application with the phone.

The difference is particularly acute when it comes to high-end phones. Today's third-party SIP-based softphones, such as Xten Networks' EyeBeam, run around $60, equipped with integrated video, presence, and IM capabilities. A comparable hard client would cost hundreds of dollars, and even Avaya's SIP-based softphone costs twice that amount.

"Telephony vendors make 35 percent of their revenue off the handset," says a marketing manager at one of the major telephony vendors. "A VoIP handset with a color screen will run you $600 to $900. Why would you pay that for a phone? You could buy three Dell PCs for that price." Unfortunately, there's no getting around the software licenses with some phone systems. Half of Avaya's phone-related charges, for example, come from such licenses.

Softphone adoption may sound unlikely at first. To some extent, this is part cultural and perhaps part generational. The likelihood that calls will be missed or interrupted because of a system reboot is far lower now given the relative stability of Windows XP. Today, typical college graduates expect that sort of stability. They're also used to communicating through IM and Webcams and using all the functionality of mobile phones. Using softphones comes naturally to them. Even many of today's traveling workforce and call center agents use softphones for specific applications, so why not the general knowledge worker in the office? No doubt some users will balk at the idea and demand a standard handset, but over time that will be the exception, not the rule.Still, registering remote phones with a central telephony server has its limitations. There's no way to connect those phones to the local PSTN in the event of a failure, so lose the DSL connection and telephone service is lost, too. Depending on customer requirements, this might not be a significant problem. If remote workers have cell phones, the temporary loss of their desk phone may not be a big deal.

A bigger concern can be the lack of a local telephone number on centrally trunked remote office phones. A call to the local pizza parlor must first be sent to the central telephony server, put onto the PSTN, then delivered back to the local dialing area, possibly as a long distance call. What's more, E-911 calling may not function properly. Carriers also have a problem delivering local phone numbers across the WAN. If an office in New Jersey receives a dial tone from the main office in San Francisco, New Jersey Direct Inward Dialing (DID) phone numbers can't be provided through the San Francisco office's phone system.


As branches grow in size and importance, IT must provide a more fault-tolerant local telephony solution. One IT architect contacted for this story addressed the problem by adding dual T1s to a remote office. While more expensive than the capital costs of adding remote CPE, redundant access lines improve the availability of data, as well as the voice infrastructure. It's worth noting that dual-access lines don't necessarily incur twice the price of a single line. MCI's Internet Dedicated T1 Shadow service, for example, adds a dormant T1 that's only activated when the primary T1 fails. (The Shadow T1 can also be diversely routed to the site, further increasing reliability.) The service is priced at a lower rate, typically another $525 per month assuming a local loop charge of $240 and a port charge of $285. There's also a $50 installation charge. In contrast, a regular T1 usually costs $970 per month, with a $700 installation fee.

Where local survivability is critical, most organizations will opt for locating a gateway at the remote office. The gateway connects to the PSTN, the LAN, and, depending on the configuration, the incoming access line. The phones within the office register with the gateway, but all the call processing happens back at the telephony server in the main office. In the event of a data network failure, the gateway redirects calls to the PSTN, thus providing backup calling functionality.

Of course, locating additional CPE boosts equipment costs and introduces remote site management issues while delivering different degrees of telephony functionality. The most expensive approach was taken by Avaya, Nortel, and Zultys. Avaya's G350 Media Gateway, for example, comes with the S8300 Media Server, a backup telephony sever that Avaya refers to as a Local Survivable Processor (LSP). The server prices in at $5,800, about the same as Cisco's 2811 router with integrated voice capability. When the main line fails, the LSP functions as a mini-PBX, providing full telephony functionality. Nortel takes a similar approach with its Survivable Remote Gateway (SRG), as does Zultys with its MX25. However, the MX25 can't accept local voice mail or auto-attendant.

Using a gateway in the remote office can also provide improved voice quality. Avaya's G350, for example, can separate the channel carrying data between the phones (called the bearer channel) from the signaling used to set up the telephone connection. The data portion moves across the PSTN, while the signaling necessary for setting up phone calls or performing various telephony functions travels on the WAN. This split arrangement gives remote users on a poor DSL connection the voice quality of the PSTN, with access to all the telephony functions of the office phone system.Cisco's survivability solution takes a middle-of-the-road approach to pricing and functionality. Although it costs about the same as Avaya, Nortel, and Zultys' solutions, Cisco's includes routing and Ethernet switching (worth about $4,200), as well as local voice mail. (Avaya says its product can perform remote routing, but few enterprises rely on the company for routing.) When the main link fails, Cisco's 2811 with Survivable Remote Site Telephony (SRST) code provides the PBX functionality, but only to a limited number of phones and without any of the policy and calling intelligence of the core site. Nothing, for example, would prevent users from dialing a 1-900 number when in survivable mode.

IT architects have long been reluctant to load remote site routers with new applications because of the impact they may have on routing performance. As part of Cisco's new line of routers announced last fall, the 2811 can be equipped with enough additional Digital Signal Processing (DIP) resources to run the codes needed to convert between VoIP and analog data. With Cisco's SRST technology activated in the router, the 2811 can act as a backup telephony server for the Cisco Call Manager (CCM) servers located in the main office.

With a single device containing the core remote office connectivity, IT can cut shipping costs and installation time, as well as simplify ongoing management. At the same time, however, there are administrative issues to consider. For one thing, there's "one neck to choke" if something goes wrong, notes a major Cisco customer. For another, there's now a shared device between the voice and data infrastructure. If you've outsourced your remote voice and data maintenance to different providers, that common element will pose a problem. Finding an organization with credible experience managing both voice and data is possible, but not easy.

The next step down in pricing and functionality for remote site survivability falls to Alcatel. The Alcatel IP Remote Unit X-IP now includes an additional processor. The gateway at the main office calls all the branch sites and re-establishes the signaling connection, providing full telephony functionality. The problem is that an analog trunk is consumed in the process, which in our case would leave the remote office with a single trunk for calling. Alcatel is developing a gateway with a backup processor due to be released in 2005.

NETWORKED SERVERSWhen remote branch calls need to be localized and there's a number of branches to manage, some vendors, such as Avaya, can equip the branch with a low-end telephony server. All the call processing and voice mail is kept locally at the branch, while administration can still be centralized at the main office. Avaya's IP Office 403 DS runs just over $12,000 for 20 users, excluding any additional applications such as unified messaging.

Functionally, this approach is similar to having a set of autonomous PBXs networked together. The problem with this implementation is that each IP Office must be managed separately, and functions such as paging between phones won't operate between offices. By contrast, Avaya's Communication Manager allows architects to affect changes globally across the entire network, rather than having to manage each site discretely.

Over the long term, that's likely to change. Avaya is working on enabling functions such as call processing to be distributed across gateways, with the aim of giving architects the manageability of Communication Manager, combined with the distributed capabilities of IP Office. Sources close to the company expect that functionality to be introduced some time next year.

Meanwhile, network architects will find a similar approach available today from ShoreTel in the form of ShoreGear, a distributed PBX. With ShoreGear, call processing occurs locally at each site, but all sites are treated as a whole for the purposes of management and administration. As a result, less traffic needs to travel back to the central telephony server, improving scalability and reducing the amount of WAN bandwidth consumed at the remote site. On the other hand, network architects will want to be sure that the update traffic needed to keep the ShoreTel servers current doesn't outweigh those bandwidth savings. The ShoreTel solution is also among the midtier, coming in at $17,760 for 20 users when adjusted for Ethernet switching and routing costs.


Alternatively, the problem of managing remote office users may be offloaded onto hosted service providers. The widespread deployment of SIP trunking will allow IT architects to tie central telephony servers into a service provider's hosted voice service offering. IT could retain control of telephony operations and let service providers manage the small offices that are too costly to serve in other ways.

By March of next year, MCI says it will provide such integration with its MCI Advantage service. Depending on the existing IT environment, remote office management costs could be reduced significantly, while still maintaining a single corporate-wide telephony service.

MCI must keep in mind, however, that simply providing the IP equivalent of OPX lines won't be sufficient. MCI must also provide full presence and convergence integration, along with basic telephony support--a tall order indeed.

Executive Editor David Greenfield can be reached at [email protected].

VoIP: The Business Case

When pitching VoIP for the branch office, justifying the expense of the project can be just as important as the implementation itself. So what's the best way to approach such as delicate subject? We posed that question to several network architects who have made the transition to VoIP.

One major theme that emerged was that while VoIP cuts costs, its biggest benefit is in the functionality it delivers. "At a comparable price point to a key system, Avaya's IP Office enabled us to give our branch offices PBX functionality," says Jack Nelson, manager of network services and operations at appliance manufacturer Sunbeam Products. "We can now provide auto-attendant and call routing, create small ACD groups, and in general bring a lot more flexibility to addressing individual requirements."

Conferencing was another big savings for Sunbeam. Nelson says the company spent up to $130,000 annually on AT&T's conferencing services. By deploying Avaya's IP Office at branch sites, users were given the ability to set up ad hoc conferences at just $40,000, resulting in a first-year savings of $90,000. Similarly, adding unified messaging can double the cost of a PBX or key system, whereas that feature is often included in VoIP solutions.Beyond the specific costs, lower maintenance is another big motivator. With TDM sets, technicians are needed to change the paper labels on phones or physically move the handsets. An engineer at a banking-related company estimated that this added another $100 per user move, not to mention the cost associated with fixing any additional problems created by the technician. With VoIP, the phones automatically reconfigure themselves once plugged into the network, so users can move their own phones.

VoIP also allows companies to consolidate certain services. "VoIP has allowed us to centralize our live receptionists into a call center across regions, producing a net savings of $100,000 annually," says Ryan Colbert, director of IT at Rissman, Weisberg, Barrett, Hurt, Donahue & McLain, a law firm based in Orlando, FL. Instead of calls coming into each office, calls are now answered out of one office and then transferred as necessary either within the office or across the Internet to the firm's other offices. Colbert could have eliminated those positions using an auto-attendant at each office, but that would have meant missing the personal touch that the firm's customers require.

Risk Assessment: Voip for Remote Offices

Branch office VoIP technology has gone through the early trial, early adopter phase. The phones are stable, and the gateways are deployable. However, many phone systems still lose some functionality when operating in backup mode. In addition, presence technology and integration with other media--the raison d'etre of VoIP--is still spotty.While VoIP phones are out there, architecting a mixed voice-data network isn't easy. Network architects need to invest the time to engineer the WAN and LAN correctly for optimum voice quality and availability. Using third-party SIP products obviously complicates interoperability and deployment, but all the vendors today provide end-to-end solutions.

Branch office VoIP systems already provide significant benefits in some companies by helping them cut operating costs and reduce capital expenditures in new offices. With a common telephony system, customer calls to one office can be transferred to another. Users can call from any phone as if they were calling from the one on their desk, and mobile workers can gain the full functionality of their corporate phone system while on the road.

The risks of rolling out VoIP in a new branch office are fairly low. The bigger challenge comes in justifying and deploying VoIP corporate-wide, or in replacing an existing, functional PBX. Once a decision has been made, engineering the network is also a challenge. Perhaps the biggest issue is getting buy-in from line-of-business managers. Involving them in the decision process will go a long way toward managing expectations down the road.

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