March 12, 2013

Study: Operational Costs Drive Stark Differences in First-Year Telephony, UC

  • Nemertes Research on behalf of Avaya

Though IP telephony has existed for more than 15 years, fewer than 20% of companies have fully deployed it. Even fewer have fully deployed unified communications (the integration of text chat, voice, video, and conferencing into a seamless set of integrated applications). So we expect to continue seeing new and expanded deployments for many years to come - with variability in the prices and business models. The vendors, product offerings, and delivery channels continue to change - as does the pricing in certain areas. Most vendors remain quite competitive when it comes to capital costs (and they're all ready to negotiate to get the deal). Basic implementation costs do not vary significantly, but ongoing operational costs do. And costs vary based on rollout size, vendor, and product, meaning there is not one vendor that is the most cost‐effective for every rollout and every size. For example, NEC and ShoreTel generally are the low-cost providers as measured by first year costs, but Avaya and ShoreTel have the lowest operational costs - meaning subsequent years should be most affordable with them.

One of the big changes in our annual cost assessments is the entry of Microsoft in the IP telephony space. Though Microsoft provides a compelling value proposition for its integrated collaboration product, Lync, ongoing operational costs - particularly when used for voice - are significantly higher than competitors. Organizations typically buy IP telephony based on RFPs that include list costs and technical evaluations but not real‐world data on implementation and operational costs. This report provides that data, based on real‐world experiences of 211 companies. Though Microsoft touts the ability of its solution to cut costs, companies in this benchmark are spending more on operational costs than those who use other vendors.

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