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enterprise5.  However, because the overall TCO of a Microsoft solution is significantly lower than the TCO of alternative solutions, the software cost as a percent of three year solution TCO rises a few percentage points relative to total spend, ranging from 20-30% of total TCO.

In the near term, organizations that have Enterprise Agreements with Microsoft can take advantage of special terms associated with the introduction of a new voice client access license for Microsoft Communications Server “14”, which can reduce the total software spend by a factor of 30%.

Network Bandwidth6

Network bandwidth costs can represent 13-17% of the three year TCO in a typical enterprise communications environment.  These include the incremental bandwidth to connect branch sites with headquarters or datacenter sites, as well as the cost of voice trunks.  If incurred across site-specific Network Service Providers or carriers (e.g. if network connectivity and/or PSTN connectivity is a function delegated out to each site, as opposed to centrally negotiated) these costs can be significantly higher.

The Microsoft approach to these costs results in a significant reduction of at least 30-35% relative to alternative IP Telephony solutions.

Unlike traditional solutions, Microsoft relies on a Quality of Experience approach to leverage endpoint computing power and achieve significant reductions in the bandwidth required for audio and video using the adaptive RTAudio and RTVideo codecs.  The associated reduction in network bandwidth charges can be significant – several million US$ in expense for large organizations (50,000 users or more).  Other vendors are beginning to use an adaptive codec-based approach as well, using codecs such as iSAC that adapt to network conditions.

Organizations that require a high degree of control for bandwidth management purposes can enable Call Admission Control (CAC) in Communications Server “14” to enable further reductions in bandwidth where required.

Centralized SIP Trunking, in conjunction with a centralized datacenter topology enabled by Microsoft’s approach to communications, allows an organization to consolidate a large fraction of its existing PSTN trunks into centralized SIP Trunks.  By consolidating capacity across a large number of branch offices, the organization can often accomplish a significant (50% or more) reduction in enterprise-wide PSTN trunk charges.


5  IM/Presence, Audio/Video/Web/IM Conferencing, LiveMeeting, Roundtable, IP Phone licensing, Voice, and Voice-related functions such as Response Groups

6 This figure does not include additional network capital spend to upgrade the network infrastructure to handle rich media communications (voice, video), which can be very significant and can alone exceed 25% of the TCO.

© 2010 Microsoft Corporation.9

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