The True Cost of Legacy Voice Mail. Why Move to Microsoft Exchange Unified Messaging. Sponsored by Microsoft. By Blair Pleasant

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1 The True Cost of Legacy Voice Mail Why Move to Microsoft Exchange Unified Messaging Sponsored by Microsoft By Blair Pleasant President & Principal Analyst COMMfusion LLC

2 Introduction We ve all heard the refrain, if it ain t broke, don t fix it. For many enterprises, this is their philosophy towards communication and technology investments. When asked why they have not yet migrated to the new world of Unified Messaging (UM), many enterprises state that their existing voice mail systems work just fine, and the systems were purchased many years ago and are fully depreciated, making it relatively inexpensive and more cost effective to stick with what they ve got. However, this is not necessarily the case. In an effort to understand the costs of maintaining and supporting legacy voice mail systems, COMMfusion LLC conducted a study to identify the quantifiable costs of maintaining and supporting legacy voice mail systems. The results are surprising. What the Research Uncovered COMMfusion interviewed a number of enterprise customers and resellers to identify the costs associated with maintaining and supporting legacy voice mail systems. In some cases, these costs were negligible, and in others they were significant. There is a group of enterprise customers that is not impacted by the cost of maintaining their legacy voice mail systems, and it makes the most economical sense to hang on to these systems as long as they provide the capabilities needed. For some of these customers, the cost of maintaining their voice mail systems are tied in with the costs of their PBX systems and are not deemed an issue. During the recent economic downturn, many customers elected to let their maintenance contracts lapse and rely on Time and Maintenance contracts, or pay as they go for maintenance. In addition, a number of clients pushed back on vendors to reduce the cost of maintenance. For a larger group of enterprise customers, the maintenance costs of legacy voice mail systems are significant, and may be costing these companies tens of thousands of dollars each year. Enterprises that will want to consider replacing their old voice mail systems with unified messaging systems based on Microsoft Exchange include those companies with systems that are more than five years old, especially companies with systems that have been or will soon be declared end of life by their manufacturers, and companies currently paying their vendors for maintenance contracts. Companies that are still using old Centigram, Audix, and Octel systems will find it difficult, if not impossible, to find the support personnel and parts needed to keep their systems up and running. End-of-life issues are on the rise. In 2011 Avaya will end all support for the Octel and Audix platforms, making it more challenging for enterprises to not only support these systems, but to expand or grow them when needed, as it becomes more difficult to find the necessary replacement parts and components. COMMfusion LLC 1

3 Overview of Support Costs Based on the study findings, costs for maintenance and support will vary by vendor, reseller (some resellers get bigger discounts from the vendors), size of the system, age of the system, and other variables. Systems that have been end of life d and are no longer supported will ultimately cost more in both parts and labor. When analyzing the costs of maintaining your legacy systems, take into account the costs for maintenance and support for hardware and software, labor, replacement parts, downtime, and other related costs. There is no set price for maintenance, and it is therefore impossible to identify an exact standard cost. Based on the enterprises and resellers we interviewed, support and maintenance costs range from $4,000 per year at the low end (12-15 port system) up to $35,000 per year or more at the high end (over 60 ports). This generally includes maintenance, moves/adds/changes (MACs) on the system, 24-hour support, parts and labor. The rates may be approximately 15-20% lower for 8x5 maintenance, rather than 24x7. Rates are very variable. For example, one reseller/system integrator charges $5,000-$6,000 per year for a port Octel system, $20,000-$25,000 for a port mid-size system, and $24,000 for above 60 ports. These charges cover the costs for doing system administration for the legacy equipment, including hardware and software, and in some cases specifies the use of used and refurbished parts. Similarly, one AVST reseller One reseller noted that if their engineers can t provide the needed support to their customers, they must turn to the manufacturers, which in some cases charge $600 per hour. Yes, $600 per hour! noted that they charge an average of $7,000-$9,000 for support and maintenance for small systems, and charge $30,000 per year for larger systems. Another large reseller charges $6 to $42 per user/per year for Avaya Modular Messaging system support. There are often other related expenses as well. For example, if using a gateway to connect a legacy TDM voice mail or UM system and an IP PBX, the servers need to be replaced after three years. Gateways have a yearly cost of $1,000-$1,500 for support and hardware replacement. In some cases, resellers have to go to the manufacturer for support, especially for older systems for which the reseller may no longer have support staff. In many cases, engineers and support staff may no longer support an older system and only the manufacturer has the necessary expertise for a particular model. In these cases, the manufacturers charge the reseller for the support provided to the end-user customer. The support costs that the manufacturer charges vary based on the size of the reseller (larger resellers with higher sales volumes are charged less). One reseller noted that if their engineers can t provide the needed support to their customers, they must turn to the manufacturers, which in some cases charge $600 per hour. Yes, $600 per hour! And of course these costs are passed on to the customer, and some resellers even charge an additional fee on top of that. Staffing is also an issue. One sporting goods manufacturer has one and a half full-time employees (FTEs) dedicated to their Siemens Xpressions system, which costs the company $105,000 per year. A mid-size manufacturing company reduced IT support required for its legacy voice mail system by more than 1000 hours providing an additional $28,000 savings. COMMfusion LLC 2

4 Average Support and Maintenance Costs for Legacy Voice Mail Systems: Per Year ports ports Above 60 ports Maintenance Charges: Maintenance (includes 24x7 support, $4,000-$9,000 $20,000-$25,000 $24,000-$35,000 MACs, labor, parts may be refurbished/used parts) Miscellaneous Charges: Gateway support $1,000-$1,500 Manufacturer support (charged to VAR, $600/hour passed on to customer Additional hardware needed $1,000/board Source: COMMfusion LLC Here are select examples of legacy voice mail maintenance costs according to customers interviewed: An international footwear manufacturer pays its reseller/system integrator $20,800 per year for Avaya Modular Messaging support, which includes 24x7 support. A financial services and mortgage company pays its reseller/si $14,900 per year for support of its Octel system. This price does not include any parts or boards that may be needed. A consumer goods manufacturing company was paying $43,000 annually for its Siemens Xpressions voice mail maintenance contract. A large outsourcing company pays $14,900 per year for its Octel maintenance contract, which includes 8x5 support maintenance, and does not include any hardware such as boards and ports that may be needed. Intel was paying $1 million in direct costs for its support contracts for its older voice mail systems from a variety of suppliers. Georgia Tech Research Institute (GTRI) was paying $100 per phone for voice mail licensing and $10,000 per year for maintenance for its third-party unified messaging system. A British firm is paying approximately $45 US per person, or $4,000 US per year for support of its Nortel CallPilot platform, which includes very passive maintenance. In summary, enterprises with legacy voice mail systems may be paying for: Maintenance contracts, ranging from $4,000 to $35,000 per year, or an average of $1.25 per user per month, or $15 per user per year on average for support, Additional vendor support costs to provide expertise that the reseller lacks for products that have reached end of life/end of support, which may cost over $600 per hour, Potential parts replacements, including refurbished or used parts, Incidental costs related hardware and software, gateways, etc., Downtime and lost productivity, and impact on business continuity, Unnecessary licensing costs (for Microsoft Exchange users with Enterprise CALs that may be paying for third-party voice mail/um licenses). In addition, for those companies with Microsoft Exchange Enterprise CAL, migrating to Microsoft UM is extremely cost effective, as they already have the voice mail component and don t need to purchase additional software, and unnecessary fax machines. A large lawn and garden supply company was able to eliminate 300 fax machines and all of the lines associated with it, for an annual savings of $600,000. COMMfusion LLC 3

5 You May Be Taking More Risks Than You Realize In addition to these hard costs, there are also additional risks that legacy customers face. There are fewer companies and engineering resources available to support the legacy equipment. For example, the number of support engineers at Avaya that can support the Octel systems has greatly diminished, as most have moved on to new positions and responsibilities after the equipment became end of life d. Several resellers noted that they no longer have legacy product skill sets and would need to find subcontractors for any support work. This is especially true for older Avaya products such as Serenade and Aria, and will become an increasing problem as vendors continue to focus on their new products and platforms. For example, Avaya has said it will end manufacturer support for the Octel 200, 250 and 350 beginning June 30, Manufacturers are also adding more caveats to the support provided, ensuring that customers are clearly aware that the vendors cannot guarantee support after a certain time. Many of the service agreements are exceptions and best Many of the service agreements are exceptions and best effort agreements when the customer uses an application or service that the manufacturer no longer supports. effort agreements when the customer uses an application or service that the manufacturer no longer supports. Beware of incidental costs that the reseller can t guarantee, such as related hardware and software, gateways, etc. Alternatively, some enterprises corporate policies mandate that equipment no longer supported by the manufacturer must be removed from the network, as they can t afford for something to break that they can t fix. A common theme from many of the survey participants is concern about business continuity. Often times, applications have been developed on hardware that is no longer supported. For example, the Octel suite includes applications such as Worx that run on hard drives, but what happens when the hard drive fails? The business is clearly impacted, and messages will not get through in a timely manner. When an enterprise s systems become discontinued, there s a risk to the enterprise s business if there s not a proper migration strategy in place. One manufacturing company noted that its Siemens voice mail product runs on Windows NT, and the IT or telecom department finds it difficult to get the expertise and support needed for the NT systems since every other system in the company runs on more recent Windows versions. Enterprises must consider business continuity and the impact legacy systems will have on the network and the business, and determine the true cost and impact of these systems. It s become more difficult for resellers and vendors to keep an inventory of quality parts, and there are fewer and fewer cards and drives available for legacy systems. Most vendors no longer manufacture the necessary cards, and in most cases only refurbished products are available, meaning questionable reliability, and lengthier repairs, as it takes longer to find the scarce parts. While some resellers have stockpiled used parts, used or refurbished parts don t always work. The director of telecommunications strategy and support for a health care organization noted that it took 13 tries to find one functional refurbished disk for an Octel 350. COMMfusion LLC 4

6 Why Move to Unified Messaging By now you realize that there are significant costs associated with maintaining legacy voice mail systems, and you have several options. 1. Do nothing stick with your legacy system (and pay the associated support and maintenance costs) and hope that it keeps working and you can get the parts you need when needed. 2. Migrate to another voice mail system 3. Migrate to a unified messaging solution The clear choice is option #3 migrate to a unified messaging (UM) solution, such as Microsoft Exchange UM. Unified Messaging has significant benefits over stand-alone voice mail systems in terms of functionality, and when using the Microsoft Exchange server for both and voice mail, maintenance and support are simplified. The clear choice is to migrate to a unified messaging (UM) solution, such as Microsoft Exchange UM. Unified Messaging has been around for many years, and has proven benefits to enterprises and end users. Based on research previously conducted with unified messaging end users, COMMfusion LLC found that the primary benefits provided by UM systems include: Message retrieval - all voice, fax, and messages can be retrieved from a single place. Mobile access workers who are frequently out of the office or traveling appreciate the ability to access and respond to messages remotely. Multimodal messaging - enables users to utilize the communication mode or medium that best suits their needs. Message management making it simpler to view, access, sort, prioritize, and forward messages. Message storage and archiving retaining a record of the voice messages is important for government, financial, health care, and other regulated organizations, and UM makes it possible to store and retrieve voice messages as easily as messages. Personal fax inbox - in addition to eliminating the need to wait at the fax machine for an incoming fax, this ensures privacy and confidentiality. The value proposition for Unified Messaging is clear: Simplification making messaging easier; Improving productivity by making it easier for people to communicate and effectively deal with the all the different communication methods; Dramatically lowering the cost of communicating with internal staff, customers, suppliers, and partners; Improving customer service -- increased access to information for quick turnaround of information leads to shorter sales cycle, while increased customer service leads to higher customer loyalty and retention; Reducing communication costs for mobile and remote workforce or agents based on enhanced communications with mobile staff; and Reducing long distance costs by more effectively communicating with colleagues. COMMfusion LLC 5

7 In addition, by using a single UM message store where all the voice mail and messages are stored in one location namely, the Microsoft Exchange server - there is a single directory for both the voice mail and systems, meaning only one directory to provision and manage. With a single message store, enterprises can leverage the voice/data network, and simplify tasks for the IT staff, such as moves, adds, and changes, while administration and support is needed for only a single mailbox, rather than two. As enterprises become increasingly virtual with larger numbers of mobile professionals, time wasted by calling to check for messages is no longer an option. All workers, especially mobile workers, cannot afford to waste time or lose opportunities when important messages, including faxes, cannot reach them in a timely manner. While impossible to quantify, opportunity lost is a tremendous issue that unified messaging helps to overcome. From a legal perspective, organizations with legacy voice mail or voice mail-only systems are not able to archive and retain voice messages, which may be necessary for compliance issues. Voice mail messages are considered Electronically stored information and have the same archiving and discoverability requirements as and other documents for compliance issues. Legacy voice mail systems don t have the means to make the voice messages discoverable, while UM systems provide the capabilities needed to meet compliance regulations. Various Options for Exchange Users Microsoft Exchange users have several options when it comes to their UM solutions they can implement Microsoft Exchange Server UM, which was designed specifically for Exchange Server, or opt for a third-party solution. Most third-party solutions were developed by PBX vendors to optimize their switches and are generally tied into vendor-specific PBX solutions and strategies and built around their own message store platforms with integration with Exchange as an afterthought, requiring the use of protocols such as IMAP to integrate with Exchange. Exchange UM, on the other hand, was developed to leverage and optimize the messaging infrastructure companies already own - Microsoft Exchange. By using Exchange UM rather than a third-party messaging solution, enterprises can eliminate redundant equipment, staffing and all associated costs, while providing access to all messaging from the device of choice, be it phone, desktop, or mobile device. While most enterprises have several PBXs, including both TDM and IP, they generally have only one infrastructure. Having the provider as the single unified messaging provider offers management simplicity. By using Exchange Server UM, Exchange administers don t need to learn anything new to manage and administer the UM system if you can manage an Exchange system, you can manage an Exchange UM system. Unified Messaging is an integrated solution in conjunction with Microsoft Exchange Server 2010 server roles, and uses standard Microsoft tools, in particular Active Directory, to manage all messaging in the enterprise. As opposed to third-party solutions, Exchange Server 2010 Unified Messaging reduces the need to manage a separate infrastructure component for voic . Administrators manage voic from within Exchange Server, just as they manage . Using Exchange Server 2010 for voic helps you streamline your IT infrastructure and reduce the workload of IT staff. According to Marty Parker of UniComm Consulting, a single-vendor UM solution can have a TCO that is 40% or more below the TCO of dual-vendor or dual system options. A single solution also makes the learning curve easier for end users, who don t have to learn anything new to use Exchange UM, as it delivers voic messages directly to the users inboxes and enables them to manage these messages using COMMfusion LLC 6

8 familiar methods and tools. Why You Should Consider Microsoft Exchange UM Microsoft s Exchange 2010 UM product is part of (included with) Microsoft Exchange, and very tightly integrated with Outlook and Active Directory. Users can access voice mail, , fax messages (via partner solutions that integrated directly into Exchange 2010), and calendar information that is located in their Exchange mailbox from an client such as Microsoft Outlook or Outlook Web App, from a mobile device that has Microsoft Exchange ActiveSync enabled, or from a telephone. Using Exchange ActiveSync, Microsoft s mobile push support, voice mail and fax messages appear instantly on mobile devices, and users can play the message on the phone. UM features include: The ability to play a voice message from either the Reading Pane, any integrated media player (on any phone/os/application) that supports MP3 files, or the message list. The Play on Phone feature lets UMenabled users play voice messages over a telephone when it s inconvenient to use computer speakers Voice mail Form, providing an interface for playing, stopping, or pausing voice messages, playing voice messages on a telephone, and adding and editing notes Personal Call Answering Rules, based on If then logic, time of day, etc., let end users dictate how incoming calls should be handled, such send the caller to voice mail, transfer to someone else, use the Find-Me feature, etc. Multiple browser support, including Apple's Safari and Mozilla's Firefox Additional language support in Outlook Voice Access Missed call and voice mail notifications using text messaging/sms Voice Mail Preview providing voice mail transcription to transcribe an audio voice mail into text as part of the voice mail body, allowing users to add text in an Audio Notes field Based on the Microsoft Exchange Speech Engine s speech capabilities, users can use Outlook Voice Access to call in and manage calendars, contacts, , voice mail, and directory. Using speech, users can accept or decline meetings, send notifications to meeting participants that they will be late to a meeting, or in the case of an emergency, clear their calendars for a given period of time. This is crucial as a feature for driving. Exchange Unified Messaging supports standard VoIP protocols such as SIP, Real-Time Protocol (RTP), and T.38, and works natively using these protocols with IP-PBX systems. Exchange Unified Messaging also can interoperate with a wide array of circuit-switched PBXs through media gateways. In keeping with the theme of this paper maintenance costs - one benefit of Microsoft Exchange UM is that support costs are likely to be lower than on other UM systems. One reseller stated that their support costs are lower for Exchange UM than other systems, noting that they charge 18-20% of the cost of the purchase price of a third-party system for support, but only 7%-10% of the license fee for Microsoft Exchange UM. A Cisco reseller in South America charges $ per hour for Cisco Unity support, while a Microsoft reseller only charges $20-25 per hour for Exchange UM support. This isn t the main reason to consider a Microsoft solution, but it s an often-overlooked cost savings. COMMfusion LLC 7

9 Conclusion While it may be simpler for some organizations to continue leveraging their existing legacy voice mail systems until no longer possible, there are substantial costs associated with these systems in terms of support and maintenance, flexibility, and business continuity. Enterprise organizations need to carefully evaluate and understand these costs and what they are actually paying to keep aging and outdated voice mail systems alive. Ask yourself: Is my legacy voice mail product still supported by the vendor, and if so, for how much longer? Am I paying more to maintain an older solution than what it would cost to get a new Exchange UM system? Can I still get new and reliable replacement parts? Does my reseller have the staff and expertise to support my older system? Is worker productivity impacted by relying on a legacy system? By migrating to Microsoft Exchange 2010 UM, enterprises eliminate the costs associated with their legacy systems For the majority of companies, it will make more sense to migrate to the newer generation of Unified Messaging systems, providing enhanced capabilities that allow for anywhere, anytime, any device messaging, while leveraging converged networks and simplified management and administration. By migrating to Microsoft Exchange 2010 UM, enterprises eliminate the costs associated with their legacy systems, while taking advantage of the cost savings and productivity benefits of unified messaging. About the Author Blair Pleasant is president and principal analyst of COMMfusion LLC and Co-Founder of UCStrategies.com. With 20 years experience, Blair has authored many highly-acclaimed market studies, and provides market research analysis and consulting services to both end user and vendor clients in the areas of Unified Communications, unified messaging, voice processing, contact center, and enterprise telephony. She is a featured blogger on and Blair can be reached at COMMfusion LLC 8

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