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Traditional IP Telephony / PBX solutions are siloed, single-vendor stacks that extend from proprietary hardware/software infrastructure elements to proprietary end user devices.  Most vendors require end user devices to be sourced from the same vendor as the PBX.  These device sales are a significant source of profit for companies that pursue proprietary device hardware approaches, with the profits from phones alone sometimes representing more than 50% of the profit for an entire telephony system.

Microsoft can facilitate a 41% or greater reduction in device cost, based on two approaches:


Vendor Choice:  Microsoft’s approach, consistent with its approach to the PC industry, has been to foster an ecosystem in which multiple vendors deliver handsets and devices that connect with Microsoft Communications Server, facilitating reduced cost and more rapid innovation.  With Microsoft Communications Server “14,” this vendor ecosystem delivers a full range of devices, including high-end IP telephone handsets for executive or sales functions, mid-range IP telephone handsets for typical Information Workers, mid-range USB telephone handsets, and low-end IP-phone handsets for common area phones.    


User Experience: Deployments of Microsoft Communications Server have shown that the user experience of Communicator decreases requirements for standalone IP Phones, allowing the use of high quality, significantly less expensive USB-based periperals.  We estimate2 that the use of USB devices instead of IP phones can reduce Capital Expenses for communications by 19% if just half the user based adopts USB devices.  For video, Microsoft’s rich desktop user experience combined with integrated or inexpensive USB video cams deliver an integrated video experience at a fraction of the cost of desktop phone devices with video capabilities.3  


Hardware consists of infrastructure in the datacenter and in the branch office.   Hardware such as servers, storage devices, gateways, PBX chassis, gateways, and survivable branch appliances generally account for 4-6% of the three-year communications TCO, and sometimes significantly more.

Datacenter hardware costs in a Microsoft environment are typically a tiny fraction of IP Telephony- or legacy TDM-based solutions.  Lower datacenter spend is partially due to Microsoft enabling customer choice among industry standard server hardware platforms running Microsoft Windows Server and the very high scale of the Microsoft solution relative to others in the market.   For example, in a 50,000 user enterprise, Microsoft’s approach results in a 77%

2 See page 53 of the linked RFP response.

3 For instance, one IP Telephony vendor recently introduced a video capable phone that lists for $795 before the purchase of a $265 USB video camera designed specifically to be mounted on the phone ($1,060 for video on a 5.6-inch screen).  For comparison, the Microsoft Life Cam Cinema (one of many tested and supported webcams) lists at $79.95 and offers 720p video quality.

© 2010 Microsoft Corporation.7

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