© m parker unicomm consulting & eb kelly kelcor 2014

Marty ParkerUniComm Consulting [email protected]

Microsoft Lync TCO

BVAL200

E. Brent KellyKelCor Inc.

[email protected]

An Independent Analysis to Support Your Planning

• Review the TCO of Microsoft Lync • Discuss how this information may inform

decisions

Objectives

© M Parker UniComm Consulting & EB Kelly KelCor 2014

• Who we are; what we do• Why a TCO study?• Approach to the study• TCO components• TCO comparisons• What this means for you

Agenda


• KelCor Inc. and UniComm Consulting• Analyst and independent consultants

• www.kelcor.com• www.unicommconsulting.com

• Many client requests for comparisons• Authored Enterprise Connect RFP Reports in 2011, 2012, 2013

Who we are


http://www.kelcor.com/

http://www.unicommconsulting.com/


Agenda


Sample RFPs for 2000 employee company• 20 vendor responses across 3 options: cloud, on-premises IP-PBX, “UC overlay”

What we found:• Cloud solutions were 2X on-premises TCO • Overlay solutions were .5X on-premises TCO

TCO Report Highlights from Enterprise Connect 2012-13

Internet

MPLS VPNs

PSTN

HQ – 1750 Stations

RO #1 - 200 Stations

RO #2 – 50 Stations

Home OfficeWorkers

Customers &Field Workers

Mobile Workers

MPLS WAN

SIP Trunk

Internet

Cell/PSTN

LEGEND

Networ

k #1

Net

wor

k #2

Net

wor

k #1

Netw

ork #1

Netw

ork #2

Networ

k #2

Option 1: On-Premise IP Tel and UC

InternetMPLS VPNs

PSTN

HQ – 1750 Stations

RO #1 - 200 Stations

RO #2 – 50 Stations

Home OfficeWorkers

Customers &Field Workers

Mobile Workers

MPLS WAN

SIP Trunk

Internet

Cell/PSTN

LEGEND

Networ

k #1

Net

wor

k #2

Net

wor

k #1

Netw

ork #1

Netw

ork #2

Networ

k #2

Cloud IP Tel & UC Provider

Option 2: Cloud-based IP Telephony and UC


TCO Comparisons from Enterprise Connect 2012

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

Normalized Versus Original Bid TCO Comparison for All Solutions over 5-years

Original Bid Normalized

Source: © KelCor , Inc. ; Stein Technology Consulting Group; Unicomm Consulting, LLC

Microsoft Responsesin 2012


Changing industry landscape• UC capabilities added to IP PBXs, collaboration software,

business applications• Need to compare premises vs. cloud solutions• Divergent sources, surveys and opinions

Done at Microsoft’s request

Why a Lync TCO study?

And, independently – for unbiased results…



Agenda


Different users require different workloads• Defining the workloads is key to a proper TCO analysis• Usually 5 to 7 user categories define the workloads for an enterprise

The Importance of Profiles

ManufacturingExecutive Highly Mobile Collaborative Worker Support Worker Task Worker Total

Percent by Category 3% 20% 30% 17% 30% 100%IM/Presence 100% 100% 100% 100% 100%Federation 100% 100% 100% 100% 0%Deskphone 100% 15% 50% 70% 15%Softphone 100% 100% 100% 50% 30%Executive Video Unit 50% 0% 0% 0% 0%Mobile Smartphone Client 100% 100% 100% 50% 30%Mobile Tablet Client 100% 100% 100% 50% 30%Conferencing Hosts 50% 100% 100% 10% 10%

Phone TypeMulti-L, Speak,

Touch Multi-L, Speak Multi-L, Speak 2-Line or Multi-Line Single-Line

Profile example for Manufacturing


Used standard sizes and workloads• 500; 5,000; 50,000 – Three orders of magnitude• Modular workloads:

• IM/Presence plus increments for: conferencing; enterprise voice; contact center; video room systems

• Usage Profiles define requirements by user categories

Configured systems and licensing• Used vendors’ tools with vendor and VAR validation• Considered both premises and cloud options• Calculated or estimated installation and operational costs

Applied discounts based on company size

TCO Analysis Assumptions



Agenda


TCO components One time costs

Total server software

Total software CALs

Total hardware

Total contact center

Total videoconferencing hardware

Total implementation costs

Grand total one time costs

Recurringsystem costs

Hosted

Solutions

Initial purchase costs

Licensing

RecurringOperatingCosts

Essential for Comparison ofPremises vs. Hosted!

One time costs


Total software CALs

Total hardware





5-year total of annual support costs

Server software maintenance / support

Total CAL maintenance / support

Total hardware support

Total videoconferencing maintenance / support

Total contact center annual support

Grand total support costs

Subtotal before support costs

One time costs


Total software CALs

Total hardware






Server software maintenance / support

Total CAL maintenance / support

Total hardware support

Total videoconferencing maintenance / support

Total contact center annual support

Grand total support costs

Subtotal before operating costs

Operating costs

Total rack space costs

Total personnel costs

Total power costs

Total annual bandwidth cost

Total SIP trunking cost

Total operating costs © M Parker UniComm Consulting & EB Kelly KelCor 2014

Discounts• Analysis uses Microsoft SA or Microsoft EAS (subscription) for on-

Premises TCO• EAS: Microsoft software licensing as an OPEX model, including support

(SA)• Standard and Enterprise CALs and SA (support) included in master EAS agreement• Lync ‘Plus’ CAL and SA for Enterprise Voice is charged at annual recurring EAS rate

• Representative IP-PBX solution is discounted progressively by enterprise size

Servers• Configured using vendors’ configuration and pricing tools for on-

premises TCO

Operating Costs• Allocated per 1000 employees, per year

• System Operation: $214,000/1000 employees per year*

• Help Desk: Lync: $50,000/1000 employees; IP-PBX: $62,500/1000 employees.

Major assumptions

*Aberdeen Research, January 2012© M Parker UniComm Consulting & EB Kelly KelCor 2014

One time costs Premise Percent Percent

MS Lync

Total server software $ 109,595 2.3%

Total software CALs $ 1,559,754 32.0%

Total hardware $ 511,579 10.5%

Total contact center - -

Total videoconferencing hardware - -

Total implementation costs $ 327,139 6.7%

Grand total one time costs $ 2,508,067 51.5%

Server software maintenance / support $ 147,648 3.0%

Total CAL maintenance / support (EAS) $ 2,101,335 43.2%

Total hardware support $ 109,957 2.3%

Total videoconferencing maintenance / support - 0%

Total contact center annual support - 0%

Grand total annual support costs

$ 2,358,941 48.5%


$ 4,867,008 100.0%

Total rack space costs $ 28,125

Total personnel costs $ 6,600,000

Total power costs $ 21,771

Total annual bandwidth cost $ 472,016

Total SIP trunking cost $ 388,125

Total operating costs $ 7,510,037

Grand total$

12,377,045

Lync on-premises CAL/SA list prices less discount

Example:5 year TCO5,000 usersOn-PremisesNo contact centerNo group videoNo EAS licensing

One time costs Premise Percent Percent

MS Lync

Total server software $ 109,595 2.3% 0.9%

Total software CALs $ 1,559,754 32.0% 12.6%

Total hardware $ 511,579 10.5% 4.1%

Total contact center - - 0%

Total videoconferencing hardware - - 0%

Total implementation costs $ 327,139 6.7% 2.6%

Grand total one time costs $ 2,508,067 51.5% 20.3%


Server software maintenance / support $ 147,648 3.0% 1.2%

Total CAL maintenance / support (EAS) $ 2,101,335 43.2% 17.0%

Total hardware support $ 109,957 2.3% 0.9%

Total videoconferencing maintenance / support - 0% 0%

Total contact center annual support - 0% 0%


$ 2,358,941 48.5% 19.1%


$ 4,867,008 100.0% 39.3%

Operating costs

Total rack space costs $ 28,125 0.2%

Total personnel costs $ 6,600,000 53.3%

Total power costs $ 21,771 0.2%

Total annual bandwidth cost $ 472,016 3.8%

Total SIP trunking cost $ 388,125 3.1%

Total operating costs $ 7,510,037 60.7%

Grand total$

12,377,045100.0%

One time costs Premise Percent

MS Lync















$ 2,358,941 48.5%


$ 4,867,008 100.0%

Operating costs

Total rack space costs $ 28,125

Total personnel costs $ 6,600,000

Total power costs $ 21,771

Total annual bandwidth cost $ 472,016

Total SIP trunking cost $ 388,125

Total operating costs $ 7,510,037

Grand total$

12,377,045

One time costs On-Premises Percent

MS Lync















$ 2,358,941 48.5%


$ 4,867,008 100.0%

#1

#2

Licenses and license

maintenance are 80% of system TCO

#1

#2

#3

IT personnel costs are more than 50% of complete TCO


Lync on-premises with EAS (Subscription)

Example:5 year TCO5,000 usersOn-PremisesNo contact centerNo group videoEAS licensing

One time costs On-Premises Percent Percent

MS Lync

Total server software - 0.0% 0.0%

Total software CALs - 0.0% 0.0%

Total hardware $ 511,579 24.7% 5.3%

Total contact center - - 0.0%

Total videoconferencing hardware - - 0.0%

Total implementation costs $357,547 17.3% 3.7%

Grand total one time costs $ 869,126 42.0% 9.1%


Server software maintenance / support $ 243,953 11.4% 2.5%

Total CAL maintenance / support (EAS) $855,600 41.3% 8.9%

Total hardware support $ 109,957 5.3% 1.1%

Total videoconferencing maintenance / support - 0.0% 0.0%

Total contact center annual support - 0.0% 0.0%


$ 1,200,510 58.0% 12.5%


$ 2,069,636 100.0% 21.6%

Operating costs

Total rack space costs $ 28,125 0.3%

Total personnel costs $ 6,600,000 68.9%

Total power costs $ 21,771 0.2%

Total annual bandwidth cost $ 472,016 4.9%

Total SIP trunking cost $ 388,125 4.1%

Total operating costs $ 7,510,037 78.4%

Grand total $ 9,579,673 100.0%

#1

IT personnel costs are now ~69%

of complete TCO

EAS licensing reduced 5-year system TCO by ~$2.8 million


• Who we are; what we do• Why a TCO study?• Our approach to the study• TCO components• TCO comparisons• What this means for you

Agenda


TCO Case: Conferencing & Enterprise Voice w/EAS5,000 usersIM/P2P; conferencing; enterprise voice; Microsoft EASNo contact center; no group video

On-Premises vs. IP-PBX: Lync 15% favorable

On-Premises vs. Cloud: Lync On-Prem 26% favorable to Lync Cloud


TCO Case: IM & Conferencing Only w/EAS5,000 UsersIM/P2P; Conferencing; Microsoft EAS

Lync On-Premises vs. IP-PBX: Lync 20% favorable

Lync On-Premises vs. O365 Cloud: Lync on-Prem 103% unfavorable


• A heat map gives a quick visual of the percent of cloud TCOadvantage or disadvantage compared to on-premise TCO

On-Premises vs. Cloud Comparison – without including operating costs

Lync Cloud vs. Lync On-Premises Without Operating Costs

Core UC with Enterprise Telephony, EAS Licensing. No Contact Center or Video

EV & Conferencing 108% 225% 340% 393% 401% 539% 604%

Conferencing Only -61% -27% 26% 98% 74% 247% 419%

Employees 500 1,000 2,500 5,000 10,000

25,000

50,000

In this heat map, no operating costs are included;

the cloud solution appears to be a poor choice.


On-Premises vs. Cloud Comparison – including operating costs

Lync Cloud vs. Lync On-Premises With Operating Costs

Core UC with Enterprise Telephony, EAS Licensing. No Contact Center or Video

EV & Conferencing -1% 19% 27% 34% 26% 33% 36%

Conferencing Only -72% -62% -56% -51% -54% -50% -48%

Employees 500 1,000 2,500 5,000 10,000

25,000

50,000

When operating costs are included, Lync cloud-based solutions are favorable for conferencing across the board

and equivalent to on-premises for small enterprises

• A heat map gives a quick visual of the percent of cloud TCOadvantage or disadvantage compared to on-premise TCO


TCO Case: Conferencing, EV, Contact Center w/EAS5,000 users

IM/P2P; conferencing; enterprise voice; Microsoft EAS Contact center (Interactive Intelligence)No group video




TCO Case: Conf., EV, CC, Video Rooms w/EAS5,000 Users

IM/P2P; Conferencing; Enterprise VoiceContact Center (Interactive Intelligence)With Group Video RoomsMicrosoft EAS




• Who we are; what we do• Why a TCO study?• Our approach to the study• TCO components• TCO comparisons• What this means for you

Agenda


• Prepare usage profiles*

• Be on the best licensing plan!!!!• Modular approaches, UC applications favor

Lync**

• Hybrid or blended solutions may be optimal• Take control of operational costs• Lync: Office communications, not IP-PBX• Think of Lync as an application platform*

What this means for you

* See Top UC Applications – Now and Future

** See Lync Business Cases: What’s Hot – What’s Not© M Parker UniComm Consulting & EB Kelly KelCor

2014

IM / PresenceP2P V&V

On-Premises or O365

On-Premises or Hosted

Consider a Modular Approach Over Time

Conferencing

Mobility

Ap

p

Ap

p

Ap

p

IPTel

Ap

p

IPTel

Microsoft Outlook

Microsoft Office© M Parker UniComm Consulting & EB Kelly KelCor 2014

• Office 365 – Optimal for:• IM/Presence • Conferencing• Simple client-based apps

• Premises or Dedicated Hosted – Optimal for:• Enterprise Voice• Contact Center• CEBP and server-based apps

A Hybrid Approach May Be Best


• If you are not moving to Enterprise Voice soon• A cloud-based Lync conferencing and IM solution has the lowest TCO

• If you are moving to Enterprise Voice• A cloud-based Lync solution that includes enterprise voice shows a

higher TCO than an on-premises solution

A Perspective for Cloud


• Getting a handle on operating costs is difficult• Survey data from analyst firms show widely varying operating costs

• Analyst firm A: $ 214 per user per year for ongoing operational costs• Analyst firm B: $ 714 to $1,912 per user for first year VoIP or IPT & UC operational

costs* * Reports note that UC&C increases the scope of services provided, thus initial integration costs

• Sanity check against required staff roles• Operating staff or infrastructure outsourcing usually reflects:

• Ratio of staff to number of software server instances (whether on discrete or virtual machines)• The number of servers driven by workloads; Lync and IP-PBX server counts are roughly

equivalent• Plus staff positions for network and QoS management and on-going system

architect/manager• Smaller enterprises see higher cost per user, based on system

configurations

Take Control of Operating Costs - 1


• On-Premises or Cloud• Measure existing costs for a viable baseline• Automate and instrument system management• Use self-service and self-care options• Track help desk usage; use UC tools• Integrate simply with desktop/device support

• Promote user self-sufficiency • Evolve your organization for UC

• Converge with Desktop/Device Support organization• Evolve to UC as a software app on IT networks & servers (or in cloud)

Take Control of Operating Costs - 2


Organizing for UC*

* Gartner Research ID Number G00158462 Aug. 2008

• Only native UC solution for Office™• Business communications is a blend

• Text and documents are the leading modality (E-Mail, Presence, IM, social, shared workspaces, document sharing, pictures, video streaming)

• Real-time voice and video serve particular purposes• Varies by processes and by demographic groups

• UC usage profiles guide optimal mix

Lync: Designed for Office Communications


• New UC value from optimizing processes*

• Change how business works• Go faster; use less; be different• Match trends for user expectations

• Lync leads in this category• Growing base of apps packages and sample code• Client and server APIs and SDKs• Part of the suite, e.g. AD, IIS, et al. • Large developer Partner community

Lync: A UC Applications Platform

* See Lync Business Cases: What’s Hot – What’s Not © M Parker UniComm Consulting & EB Kelly KelCor 2014

• Lync TCO comparisons will vary widely by required workloads

• Lync TCO is competitive with leading IP PBX TCO• Operational costs demand attention for best TCO• Cloud offerings have an attractive TCO for some

workloads• Consider modular and hybrid approaches to TCO

Recap and Summary


Total Cost of Ownership for Lync 2013

Marty ParkerUniComm Consulting [email protected]

E. Brent KellyKelCor Inc.

[email protected]!!

Monday, February 17th

Exhibit Hall Hours 6:00pm – 8:00pm

6:00pm – 8:00pm Welcome Reception

Tuesday, February 18th

Exhibit Hall Hours 8:00am – 9:00am (Breakfast), 10:30am – 5:00pm

8:00am – 9:00am Breakfast (Exhibit Hall) 9:00am –10:30am General Session10:30am – 5:00pm Expo Hall Hours11:00am – 12:15pm Sessions & Hands-on Labs12:15pm – 2:00pm Lunch2:00pm – 5:00pm Sessions & Hands-on Labs5:00pm – 7:00pm Ask the Experts

Wednesday, February 19th

Exhibit Hall Hours 10:30am – 4:30pm

7:30am – 8:30am Breakfast8:30am – 11:30am Sessions & Hands-on Labs10:30am – 4:30pm Expo Hall Hours11:30am – 1:00pm Lunch1:00pm – 5:45pm Sessions & Hands-on Labs6:30pm – 9:30pm Attendee Party

Thursday, February 20th

Exhibit Hall Hours 9:00am – 12:00pm

8:00am – 9:00am Breakfast9:00am – 12:00pm Expo Hall Hours9:00am – 12:15pm Sessions & Hands-on Labs12:15pm – 1:30pm Lunch and Departures

Ask the ExpertsLocation: Meal Hall located on Level 1 in Pinyon Ballroom 4-8 Tuesday, February 18

TABLE TOPICS:Best Practices, Business Value, Clients & Mobility, Lync Meetings and Video, Lync Online, Networking, Platform, Server & Manageability, Voice, Lync Feedback Sessions

Meet face-to-face with the foremost experts in the Lync field and ask them the questions that have you stumped.

Location: Breakout rooms located on Level 1 5:00pm-7:00pm

GROUPS INCLUDE:Manageability – Pinyon 2Meetings & Web Experiences – Bluethorn 4-6Mobility – Bluethorn 7-9Presence & Chat – Pinyon 1Voice & Video – Bluethorn 1-3

Come participate in targeted Feedback Sessions to hear about the high-priority feature asks and help us improve the next release!

Lync Feedback

These sessions are meant to be informational, providing an understanding of the workload and conversational, to discuss your user scenarios and desired improvements.

Birds of a FeatherBirds of a Feather flock together! Join daily breakfast discussions of relevant topics by sitting in the separately designated areas of the Meal Hall. Seating will be sorted in a different way for each Birds of a Feather breakfast:Wednesday, February 19:Where are you from? Asia/Pacific, Eastern & Central Europe, Latin America, Middle East & Africa, US (West, Central & East) and Canada, Western Europe

Thursday, February 20:What is your interest?Best Practices, Business Value, Clients & Mobility, Lync Meetings and Video, Lync Online, Networking, Platform, Server & Manageability, Voice

#LyncConf14

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/microsoft-lync

/MSFTLync

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Fill out evaluations to win prizesFill out evaluations on MyLync or MyLync Mobile.Prizes awarded daily.

© 2014 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

© m parker unicomm consulting & eb kelly kelcor 2014

Documents

total annual bandwidth

time costs essential

mobile tablet client100

mobile smartphone client100

phone type multi

unbiased results

microsoft responses

executive video unit50