VoIP/IPT Financial DecisionsVoIP/IPT Financial Decisions
What communications equipment should you buy, and what should you lease?
March 20, 2009
What communications equipment should you buy, and what should you lease?
IT technologies turn over, are refreshed about every 3 to 4 years. The same is happening to communications technologies. Is it worth buying or leasing the communications technologies?I want to look at four areas of communications technology: the server, phone gateway, trunk gateway and IP phone. Each will have a separate thought process in the buy vs. lease decision. The NoJitter article "Buy vs. Lease for Communications Technology" is a source for information about the benefits and financial consideration when leasing communication technologies.
Server Many IT organizations lease their servers for the data applications. Server products keep improving with more compute power, lower energy costs and smaller data center footprints. Virtualization of server based applications is quite common.
The VoIP/IPT servers are different story so far. The major IPT vendors use modified servers running modified operating systems. Linux in these IPT servers in NOT the same as the off the shelf Linux, thereby excluding virtualization for the call manager software. Even though most call manager servers are relatively idle, generally less than 10% busy, virtualization is uncommon. I therefore suggest the call manager server be purchased UNLESS the call manager software can be virtualized. If virtualization is used, then leasing the server as is done for other data applications is a better idea.
Phone Gateway The phone gateway is required to support legacy devices. Besides analog and digital phones, this gateway may also support fax machines, alarm systems, modems, and security devices. A long term goal is to reduce and eventually eliminate the legacy analog and digital phones. Some gateway connections will continue to be required for the non phone devices and connections. I suggest that the enterprise buy the gateway connections for the non phone devices. The gateway for the legacy phones should be leased so that as IP phones and softphones are introduced, the phone gateways can be retired on the lease.
Trunk Gateway The trunk gateway connects to the PSTN and to other enterprise sites via T1and PRI connections. Many enterprises will or are connecting their IPT sites together with IP trunks, negating the need for a trunk gateway for this purpose. If legacy trunking is in use with the goal to move to IP trunking, then the inter-site trunk gateways should be leased.
SIP trunking is growing in popularity and availability. Although most SIP trunking installations are unique to each IPT vendor, the major carriers and ISPs support multiple SIP trunk interfaces. SIP trunking also negates the need for trunk gateways. Although SIP trunking may not be available everywhere, it will be soon at a lower cost than legacy trunks. This is the second reason for leasing the trunk gateway. The primary reason for retaining and therefore buying any trunk gateways are for resiliency, as backup to the SIP trunks.
IP Phones Traditionally, enterprises kept analog phones in use even when changing PBX vendors. Everyone supported the classic analog phone. Digital phones on the other hand are unique to each vendor. The legacy phones remained rather stable in their operation over the last decade or two. This is NOT true of the IP phone.
If you purchased H.323 or proprietary phones because of the IPT feature set, you chose to make this decision because the SIP phone support was less attractive or not available. But as the IP phones mature and new models are introduced, then the older IP phones become obsolete. This obsolescence can occur every two to three years. It is now common that to gain the UC advantages using SIP, the IP phone has to be replaced.
If the enterprise is convinced that the initial IP phone purchases will be useful for more than four years, then the phones should be purchased. If however, the enterprise vision is to add more features and functionality in three years, the IP phones will be replaced. If this is the case, the IP phone should be leased.
Another factor is the softphone, especially as offered by Microsoft. As features and functions are added to OCS that work best with Office Communicator, then the IP phone will become obsolete unless that IP phone can emulate the Office Communicator operation. The planned move to softphones is another reason to lease the IP phones.
The final reason for leasing is cash flow and credit. Although leasing may appear to more expensive, with today's credit limitations, buying may not be possible. Leasing allows the enterprise to move forward with technology without having to produce the capital for the purchase. Ask your CFO to help analyze leasing vs. buy arrangements when considering VoIP and IP telephony.
My panel at VoiceCon Orlando, "Assessing Your Financing Options: Buy vs. Lease" on Wednesday at 8AM will discuss more of these issues. Here is the panel description:
We all know that budgets are tight and capital is constrained at most enterprises. So how do you continue to make the investments you need to make in order to keep your communications systems up to date and cost efficient? In this session, we'll examine the different options for procuring communications systems, and describe which are likely to be best for various circumstances.
What communications equipment should you buy, and what should you lease?
