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Multi-service gateways booming for small businesses and branch offices

Multi-service business gateways (MSBGs) can ease remote IT management tasks and help small and medium businesses (SMBs) shave costs.

More and more businesses of all sizes are turning to multi-service gateways, particularly as enterprises look to reduce the costs of managing IT at branch offices.

Fifty percent of businesses with more than 20 employees now use multi-service gateways, according to a recent survey by analysis firm In-Stat. Also known as multi-service routers, gateways typically combine a variety of functions, including IP telephony, firewall, routing and wireless access, onto a single device.

"One of the things that has happened is that organizations are much more dispersed: There are lots of branch offices; there are people working from home; there are knowledge workers based all over the place," said Keith Nissen, principal analyst for In-Stat. "They all need secure communications back to the core business."

Multi-service gateways, which Nissen said are in their third generation, can provide branches a more convenient, economical way of linking securely to central offices. Consolidation onto a single device means their IT organizations have fewer devices to maintain. These routers also provide them with a single remote management platform to deal with, instead of multiple interfaces.

"For the greenfield customers who are just now migrating to IP telephony, a [multi-service gateway] makes more sense than buying a simple, straightforward gateway," said Imran Khan, an industry analyst with market research firm Frost & Sullivan.

IP voice services are the primary driver of branch multi-service gateway adoption, primarily in enterprises that are looking to consolidate IT support services, Khan said.

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"One catch," he said, "is you're going to have to look at the large enterprises and see how willing they are to go out and replace their existing gateways."

Cisco Systems' market dominance makes its line of integrated services routers (ISRs) a top choice for many companies, but Khan said that smaller, niche players like AudioCodes could make inroads by touting specialized features that fit a particular enterprise's need.

"[Competitors] don't say [their] router functionality is the best in the industry," he said. "They go out and market features Cisco is not addressing or not marketing as much." He cited improved session border control and specialized telephony applications as examples of niche offerings from the competition.

Joe Vukson, product manager for 3Com's multi-service router line, said IT consolidation has driven demand for the device since its launch a year ago.

"With an MSR, we can put the configuration that's needed on a disk from central IT staff, ship it off to [someone at] the branch office," Vukson said. Future configuration and updates on the MSR can be done remotely. "What we're seeing is more and more IT being done centrally," he said.

That ease of remote administration, as well as a greater interest in third-party managed services from service providers leasing the devices, has spurred device adoption over the past three years.

In 2005, two-thirds of businesses managed their own branch office equipment on site, Nissen said. Now, only a third do, thanks in large part to the simplicity multi-service gateways offer. Others have turned to managed services to run their remote offices.

"The economics has always favored owning your own equipment," Nissen said. But with [multi-service gateways], the economics have shifted: Fewer devices are needed even as more duties can be done from across town or across the world, cutting out costly on-site visits. "You get the best of both worlds," he said.

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