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Alcatel-Lucent is Giving it Away for Free

I recently received a consultant update from Alcatel-Lucent that directed me to one of its current promotions:We Help You Transition With 'IP for Free' *

Take advantage of our migration offer which includes Internet Protocol (IP) user licenses and Power over Ethernet for Free. With the purchase of an Alcatel-Lucent OmniPCX Enterprise communication system, you will received [sic] (i) one free IP user license for each IP end-point, and (ii) free Alcatel-Lucent OmniSwitch 6200 or 6400 LAN switches with one Power over Ethernet port for each IP Touch 4028, 4038 and 4068 phone purchased.

*Offer requires buy-back or certificate of destruction of existing replaced equipment. Offer applies to new system purchases installed prior to December 31, 2009.

Not only is Alcatel-Lucent giving away software licenses that are usually optionally priced, but it is also offering free PoE switches as part of the deal. As I wrote in my last No Jitter feature story, system suppliers are eliminating a variety of software option costs to customers as a marketing and sales incentive. Alcatel-Lucent has gone the extra step by also including free hardware equipment in support of the IP telephony system. It's like the Gillette strategy of giving away the razor for an ongoing stream of blade revenues. Although the OmniSwitch LAN switches are not totally free, because dealers will still be able to charge an installation fee, Alcatel-Lucent likely initiated the financial-incentive promotion as a means to motivate market demand for its enterprise communications offerings in a down economy.

If Alcatel-Lucent is smart it will totally eliminate the IP user license fee after the December 31, 2009, deadline, because few competitors still have a similar price element in a market where the majority of new station endpoints are IP-based. Avaya was the first of the traditional PBX suppliers to go this route, and most others have followed suit. Installing IP telephones is no longer an option, but the accepted standard for most customers. Customers should expect to pay a license fee for the generic software, but not be penalized for IP licenses when the system is designed for IP telephony.