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including high-end, mid-range, and low-end devices.  

Hardware

The hardware category includes centralized servers and other infrastructure such as load balancers, PSTN gateways, or Survivable Branch Appliances.  Some vendors require all hardware, even general purpose data center servers, to be purchased from a single vendor or small set of certified vendors.  Some communications platforms may also require additional specific security hardware for VPN services in the datacenter, headquarters, branch, and telecommuters’ home offices.

Software

Software includes both license and maintenance costs for server software, client software, and embedded software.  There are many approaches that vendors take to licensing software for communications.  Microsoft, for example, delivers an all-in-one license model, while some vendors favor an a la carte approach, licensing many individual components separately.  

Network

All communications platforms require connectivity to a service provider(s) to facilitate communications among customer sites, federated companies, remote, anonymous, and PSTN users.  These costs can become significant, especially when the chosen solution requires a high degree of traffic engineering support from the carrier or high provisioned bandwidth thresholds to compensate for codecs that perform poorly under constrained network conditions.

Services

Services costs are primarily fees paid to systems integrators or resellers who assist with planning, build-out, piloting, and deployment of communications solutions.  As complexity increases, these fees typically increase as well.

Support and Operations

Support and operations costs include the cost of administration (all tiers), helpdesk & end-user provisioning costs, and hardware maintenance contracts.

TCO of an IP Telephony-centric Communications Platform

For many organizations, the TCO of the communications platform based on traditional approaches breaks down along these lines

© 2010 Microsoft Corporation.4

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