Lower Total Cost of Ownership (TCO)

The term TCO refers to total cost of ownership. Various solutions have components that are cheaper than others, but what is really important is TCO. Just because one software license is cheaper doesn’t mean that the overall cost to purchase and run a solution is cheaper. For some time, Microsoft has claimed a lower TCO than the competition. At VoiceCon in 2010, Microsoft was able to provide some truth to this statement. VoiceCon held an RFP competition titled “Who Delivers the Goods?” This competition requested that all major UC vendors provide an RFP response. In the end, the responses were used to provide a TCO comparison between vendors. The results showed Microsoft being nearly 50% cheaper than all other vendors in the competition. Additionally, the Microsoft solution included the full UC stack, whereas other vendors’ solutions were IP Telephony only.

As was mentioned before, TCO is the entire picture. In some of these cases and in my experience, Microsoft and the competition can be similar in costs when it comes to licensing. Microsoft licensing can even be more expensive depending on discount levels to the customer. However, Microsoft offers key advantages that contribute to a lower TCO:

• Hardware Flexibility—Lync allows organizations to choose the server platform as well as the endpoints to be used. This allows organizations to deploy whatever server hardware is right for them, at the right price. This includes the capability to virtualize across the different platforms available to organizations. Traditional “UC” systems will leverage IP phones as the primary endpoint. Not only does Microsoft offer an IP phone solution that is cheaper than the competition, but there are high-quality headsets available at low prices. Many Lync Optimized wired headsets are under $50, and that does not include a bulk purchase discount.

• Leveraging Microsoft Investments—In the RFP competition and in most organizations, Active Directory and Exchange Server are deployed. Lync leverages Exchange for Unified Messaging features, which helps drive a lower cost. In addition to Exchange Server, many organizations are under enterprise agreements with Microsoft that include Lync core functionality (IM/Presence, Peer-to-Peer A/V and Sharing, and Conferencing Join). Because the Lync client also comes with Microsoft Office, organizations that have deployed Office benefit from their investment. This results in clients only needing to purchase conferencing and enterprise voice client access licenses, which is much cheaper than the total licensing cost from the competition.

• Reduced Complexity—Lync is based on other Microsoft technologies that IT Professionals are used to. This often results in a smaller learning curve for existing staff to ramp up on the solution. Additionally, the deployment and management of Lync is greatly simplified compared to other UC solutions in the industry. With this reduced complexity comes reduced maintenance and support costs when compared to other UC solutions.

• Conferencing Cost Savings—In my experience, no other UC solution in the industry is able to provide as great a level of cost savings on audio conferencing as Lync. When directly compared, the architecture and, sometimes, the additional licensing required will make Microsoft up to 50% cheaper than the competition in this area.

• Rapid ROI—Based on what was described earlier in this section, the Microsoft solution delivers a much more rapid ROI. The fact that Lync is a single system as opposed to multiple systems, providing all functionality to users, allows organizations to realize ROI much faster than when deploying a competing UC solution.

The factors just described contribute to Lync having a lower TCO when compared to the competition.