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Considering Lync for Telephony? Plan for Rising OpexConsidering 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.

Robin Gareiss

March 13, 2013

3 Min Read
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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

About the Author

Robin Gareiss

Robin Gareiss is CEO and Principal Analyst at Metrigy, where she oversees research product development, conducts primary research, and advises leading enterprises, vendors, and carriers.

 

For 25+ years, Ms. Gareiss has advised hundreds of senior IT executives, ranging in size from Fortune 100 to Fortune 1000, developing technology strategies and analyzing how they can transform their businesses. She has developed industry-leading, interactive cost models for some of the world’s largest enterprises and vendors.

 

Ms. Gareiss leads Metrigy’s Digital Transformation and Digital Customer Experience research. She also is a widely recognized expert in the communications field, with specialty areas of contact center, AI-enabled customer engagement, customer success analytics, and UCC. She is a sought-after speaker at conferences and trade shows, presenting at events such as Enterprise Connect, ICMI, IDG’s FutureIT, Interop, Mobile Business Expo, and CeBit. She also writes a blog for No Jitter.

 

Additional entrepreneurial experience includes co-founding and overseeing marketing and business development for The OnBoard Group, a water-purification and general contracting business in Illinois. She also served as president and treasurer of Living Hope Lutheran Church, led youth mission trips, and ran successful fundraisers for children’s cancer research. She serves on the University of Illinois College of Media Advisory Council, as well.

 

Before starting Metrigy, Ms. Gareiss was President and Co-Founder of Nemertes Research. Prior to that, she shaped technology and business coverage as Senior News Editor of InformationWeek, a leading business-technology publication with 440,000 readers. She also served in a variety of capacities at Data Communications and CommunicationsWeek magazines, where helped set strategic direction, oversaw reader surveys, and provided quantitative and statistical analysis. In addition to publishing hundreds of research reports, she has won several prestigious awards for her in-depth analyses of business-technology issues. Ms. Gareiss also taught ethics at the Poynter Institute for Advanced Media Studies. Her work has appeared in the New York Times, Chicago Tribune, Newsweek, and American Medical News.

 

She earned a bachelor of science degree in journalism from the University of Illinois and lives in Illinois.