SHARE



ABOUT THE AUTHOR


Robin Gareiss
Robin Gareiss is president and founder of Nemertes Research, where she oversees research product development, conducts primary research, and advises...
Read Full Bio >>
SHARE



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





COMMENTS



August 16, 2017

Contact centers have long been at the leading edge of innovation in communications technology, given their promise of measurable ROI and the continual need to optimize customer interactions and sta

July 12, 2017

Enterprises have been migrating Unified Communications & Collaboration applications to datacenters - private clouds - for the past few years. With this move comes the opportunity to leverage da

May 31, 2017

In the days of old, people in suits used to meet at a boardroom table to update each other on their work. Including a remote colleague meant setting a conference phone on the table for in-person pa

August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular BlogGeek.me blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.