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reduction in datacenter hardware relative to alternative approaches.

In legacy TDM voice environments, each site often has its own local PBX infrastructure, with its own deployment footprint, administration, support, and maintenance contracts.   Any organization with multiple sites can find this approach extremely expensive, with the pain being felt even more so as organizations grow and become more physically diverse.  Modern IP Telephony deployments consolidate hardware into many clusters, though each cluster still has associated hardware, deployment, and operational costs replicated across clusters rather than one highly consolidated environment.  Many IP telephony-focused vendors also require their own high priced “appliances” on which to run their software, versus enabling an ecosystem of partners to deliver competitively priced hardware/software bundles.

The Microsoft communications approach can facilitate a reduction of hardware costs to just 2% of total TCO under expected-case assumptions.  However, the hardware can range up to 9% under unlikely assumptions, such as full on-site redundancy for even the smallest of sites with a high ratio of sites to users, that require the highest possible levels of resiliency at a very large number of sites.

Hardware TCO in a Microsoft environment is correlated with customer requirements for branch resilience and corresponding investments in survivable branch appliances.   Under high-end assumptions in which an enterprise with a very large number of branch offices4 desires failover capability in every branch office regardless of size, the customer would deploy a basic branch office appliance at each branch office, driving overall hardware TCO up to 9% of total 3 year TCO.   However, most customers do not require this level of resiliency in every branch, and under expected scenarios, the hardware spend drops to 7.5% of total TCO.   This assumes a gateway appliance for PSTN connectivity in every branch that does not have a branch office appliance for resiliency.

Additional reductions in hardware cost are facilitated by SIP Trunking, allowing an organization to connect with the PSTN directly via IP rather than via a PSTN gateway appliance.   Major carriers are offering SIP Trunking services qualified for Communications Server, which allow customers to reduce the number of deployed hardware gateways by centralizing PSTN connectivity via SIP trunks to datacenters.   Expected SIP Trunking penetration assumptions over the next three years drive the total hardware cost for a large customer to only 2% of the TCO of the overall enterprise communications environment.


Software licensing and maintenance costs can represent 20-30% of the TCO of an enterprise communications environment.   These costs include server licenses, client licenses, and software maintenance fees.  Customers that elect to use multiple vendors to provide different capabilities will often see higher costs for software licensing.

The total software cost for a Microsoft-based environment is about 10% lower than the total software cost for an IP Telephony-based communications solution.  This lower spend includes all capabilities for every user in the

4 Over 700 branch offices in a large 50,000 user enterprise

© 2010 Microsoft Corporation.8

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