The Frugal Branch Office System

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Colin here…

We have numerous branch offices, and each of them has a lot of autonomy. While HQ provides some direction and support, the reality is that things vary a lot in each office. We just haven’t found the need to over-standardize on technology like phone systems, nor have we centralized it.

A few decades ago there was value to a centralized network and there were considerable savings by having private lines and a private network to bypass the local companies and their outrageous toll charges. Voice traffic and voice-mail messaging are on a steep decline (and have been for years.) The overhead of over-centralization just wasn’t cost effective. And, above all else our company is frugal.

Sometimes we need to step in and assist a branch office. These can largely be a group of a few dozen sales and service people who aren’t very technical. They depend on HQ for some things. They always complain that our internal charge-back prices are too high and that we have preferred “Cadillac” solutions. I see their point.

What our branches need is simplicity, reliability, and stability. Their life revolves around their local functions and thinking about their PBX isn’t one of those functions. If they spend one day a year thinking about their phone system they begrudge that day.

In our search for reliable and cheap phone systems we felt it worthwhile to look at cloud based PBX systems. The concept is very attractive. You just buy some phone sets and you are done. Everything is in the cloud.

These systems have looked to be very feature rich, with voice mail and all of the business features. They are certainly simple, and that met our first criteria. We looked at Vonage extensively.

Our business is global, so the immediate problem with Vonage was that they are a US national provider. But we were still intrigued.

The first real problem we ran into with the cloud PBX companies is that they are all very opaque in their offerings and especially with their pricing. The experience immediately felt like being on a used-car lot where none of the cars had prices in the windows.

I have never understood why companies don’t show their pricing on their web-sites. Not showing pricing means you may be wasting your time reading anything else because they may not be priced reasonably. It means you have to contact them, and then wait for an answer. That answer usually still doesn’t answer your pricing question, but just means you have to answer a lot of “qualifying” questions. My feeling about these questions is that they are less about matching you with the right solution and much more about wasting your time and wearing you down so that you can’t shop very many companies.

So, back to Vonage. They don’t publish their pricing. OK, they do list $40 per month per extension. But nobody should be paying that and they know it. So they ask you to contact them for discounts and details. Very quickly the sales process begins and your salesman is going to go to bat for you and wants to be your best friend, fighting his upper management on your behalf to get you the very best deal because you are his very best friend. Voyage ends up really costing $20 to $25 per extension, or else $10 to $15 per extension plus 3-cents per minute incoming and outgoing.

The average prices after dickering them down seems to be (per-line) $20 a month or else $10 a month and 3-cents a minute. Add $5 a month per line if you have under 5 extensions.

The quote we had for a 20-extension branch office was $400~$500 a month.

I love the idea of PBX-in-the-cloud. It seems simple and elegant. But right now for some reason it is like buying a used car (or a used horse.) It is just not straightforward to purchase. The sales strategy is in direct contradiction to the primary sales pitch.

So, we keep looking for a good branch-office solution…

We also looked at a number of appliance PBX systems. One of those stood out as the perfect solution. It was the Grandstream UCM6100 series. I may sound like a commercial here, but this one switch was a bright shining star. We love them.

When my staff came into my office and told me we could put PBXs in for an installed cost of $80 per extension my jaw dropped. “Including the telset?” I asked. Yup. Everything. How is that possible? PBX: $300. Ten phones at $40 each. Total cost: $700. That’s $70 per extension, including the PBX.

The staff set down a POE (Power-Over-Ethernet) network switch, a small box (the PBX) and three multi-line feature phones. The entire PBX is powered through the Ethernet cable via POE.” I plugged in a credential I had for a SIP account and entered an outbound dialing plan. I also entered a wildcard inbound dialing plan, pointing all calls to extension 1000. I called the SIP trunk and the phone rang. I picked up another SIP phone and dialed my cell phone and it rang.

I sat quiet for a moment. Then, I said: What am I missing? They said that there were some default settings that would improve the experience, but we could standardize those. How long does this take? Answer: About 15 minutes. And, we can make a backup and clone that to new switches.

You mean we can configure and install PBX in under an hour? “Yes.”

And, that is how we built our branch-office PBX-in-a-box program.

Now our branch offices have IVR, Voice Mail, Fax Mail, paging, conferencing, and company-wide networking and speed dialing.

The switch backs itself up to an SFTP site every evening, so if it fails we can ship them a replacement and restore the backup in an hour. Or, we can load their backup into a PBX here at headquarters and do testing.

At $70 per extension it’s a killer proposition. But the cost goes down to $52 per extension on a 50-phone branch and down to less than $50 on a 100-extension branch.

Our company prides itself on frugality, and the Grandstream UCM6100 PBX is the sort of product that in in line with our corporate philosophy.

Colin Berkshire