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Robin Gareiss
Robin Gareiss is Executive VP/Senior Founding Partner of Nemertes Research, where she oversees research product development, conducts primary research, develops...
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Robin Gareiss | March 13, 2013 |

 
   

Considering Lync for Telephony? Plan for Rising Opex

Considering Lync for Telephony? Plan for Rising Opex IT leaders believe going into a Lync telephony deployment that they will save money, which they may on the initial capital costs and licensing. The problem, though, is Lync is an expensive operational proposition.

IT leaders believe going into a Lync telephony deployment that they will save money, which they may on the initial capital costs and licensing. The problem, though, is Lync is an expensive operational proposition.

As companies embrace the unified-communications capabilities of Microsoft Lync, the bean counters are furiously examining the financial benefits of adding voice as an option.

After all, Microsoft makes it easy and financially appealing to add voice to Lync's already-popular instant messaging, presence, and video capabilities. What may not be apparent, though, is Lync's operational costs can be significantly higher than competitors'.

Nemertes recently conducted an independent study on the IP telephony and UC implementations of 211 companies, gathering data on the following vendors: Alcatel-Lucent, Avaya, Cisco, Microsoft, NEC, ShoreTel, and Siemens. When it comes to telephony, Microsoft is the newcomer in that list and is garnering significant interest among telecom leaders.

Lync, and its predecessor Office Communications Server (OCS), provide a tightly integrated desktop communications system for IM, presence, video, and Web conferencing. Adding voice is a natural extension, a fact not lost on Microsoft licensing experts. In our research, the capital costs, including licensing, servers, and other related endpoint hardware, for Microsoft customers are only $480 per end unit, vs. $540 median. (See Figure below.)

IT leaders believe going into a Lync telephony deployment that they will save money, which they may on the initial capital costs and licensing. The problem, though, is Lync is an expensive operational proposition, particularly for those integrating it with other telephony products. The median annual operational costs across the vendors we studied, including internal staff, third party partners, annual maintenance, and training, are $704 per end unit. Microsoft customers in our benchmark, however, spend $1,912.

In all areas of operational costs we benchmarked, Microsoft's are higher than the median. For example, IT professionals in our research who use Microsoft spend more than three times the median on internal staff per endpoint, attributing the figure to muti-vendor integration challenges and sound quality issues.

Considering that many companies do not have internal Microsoft telephony experts, they often turn to third-party experts. Microsoft customers spend more on third-party partners than any other vendor's customers--with $86.32 per end unit, compared with $25 per end unit for Avaya. This makes sense, given the staffs at Avaya shops tend to be experienced telecom experts, typically with years operating Avaya systems. In Microsoft environments, on the other hand, telephony is a new application and internal staff expertise still is lacking, which also explains why they spend the most for training.

During our interviews in this project and in previous years of conducting TCO research, we have found that operational costs tend to be highest during the first two years of usage of a new technology, as staffs gain expertise. For example, companies using Cisco in its early days of IP telephony saw higher operational costs, as well. After about two years of using the technology, the operational costs drop by about 20%.

Bottom line for now: Though Microsoft telephony costs for capital are attractive, ongoing operational costs are not, particularly for those trying to integrate it with existing IP telephony systems.

Building an accurate business case, including capital, implementation, and operational costs, is crucial to selecting the best vendor and architecture for your organization. It's tough to get accurate operational costs before actually incurring those costs, which is one reason we conducted this research.

Join me next week as I review further details on IP telephony and UC costs at the Enterprise Connect session: Building the UC Business Case Monday, March 18, at 2 pm. For more information on the session, visit: http://www.enterpriseconnect.com/orlando/conference/overview.php?session_id=9



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