WHITE PAPER. Taking a Strategic Approach to Unified Communications: Best of Breed vs. Single Vendor Solutions SPON. Published February 2013

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1 WHITE PAPER sponsored by Unified Communications: Best of Breed vs. Single Vendor An Osterman Research White Paper Published February 2013 SPON sponsored by Osterman Research, Inc. P.O. Box 1058 Black Diamond, Washington USA Tel: Fax: twitter.com/mosterman

2 EXECUTIVE SUMMARY Unified communications provides a number of benefits to any organization: The ability for users to have an integrated experience that combines their , voice, Web conferencing, mobile and real time communications and collaboration into a single, cohesive experience. The ability to have available a consistent interface on any platform, from any location. This enables employees to work from home or while traveling and remain as productive as they are while in the office. The ability for employees to make decisions more quickly by having all of the information and other tools necessary to communicate and collaborate, regardless of their location. Significantly reduced IT and telephony costs by integrating various modes of communication into a single and consistent communications platform. THE MIGRATION TO UNIFIED COMMUNICATIONS Organizations are migrating toward unified communications because of two key issues with conventional communication systems: Integration of data In a conventional communications scenario, users employ an system on a desktop computer, laptop or mobile device; make telephone calls and access on a desktop telephone or on their mobile device; participate in instant messaging conversations with a standalone client on their computing platform(s); participate in Web conferencing sessions with yet another standalone client, and so on. These tools allow users to be productive, but the standalone nature of these applications negatively impacts productivity when users try to share data between the various communication modes or when they are out of the office. Further, messaging and telephony are often managed by separate groups, creating additional problems. Organizational flexibility and agility Conventional communications tend to limit the flexibility that organizations have in allowing employees to work remotely. For example, while employees can access corporate from virtually any Web browser, accessing telephony, fax, Web conferencing and other systems is not as easily accomplished when users are working remotely. This limits the ability of organizations to enable telework and thereby drives up overall IT and telephony costs. KEY TAKEAWAYS While unified communications can clearly enable more efficient and more consistent communications across any platform, for users in any location, there are different approaches to implementing a unified communications system. A single-vendor approach, such as Exchange in combination with Lync, can provide a robust unified communications experience and can make users more productive. However, an open approach that leverages cloud-based productivity applications, such as Google Apps integrated with a software and hardware agnostic unified communication platform like Esna Office-LinX, permits the re-use of existing PBXs and other systems, and provides the necessary flexibility to allow organizations to adopt a wider variety of less expensive on-premise and cloud-based applications. Moreover, the use of best-of-breed solutions provides more flexibility and lower overall costs over the long term. An open approach to unified communications permits the re-use of existing PBXs and other systems, and provides the necessary flexibility to allow organizations to adopt a wider variety of less expensive onpremise and cloudbased applications. Moreover, the use of open solutions provides more flexibility and lower overall costs over the long term Osterman Research, Inc. 1

3 WHY UNIFIED COMMUNICATIONS? The term unified communications is what its name implies a set of communication tools that are assembled into a single interface and integrated into a single management system. Unified communications includes a variety of communications and collaboration tools: , calendaring and scheduling, voice/telephony and realtime communications capabilities that are presented to a user through a thick client and/or a browser-based interface. Other functions that may be included in a unified communications system include text messaging/sms capabilities, fax services, mobility services and Web conferencing. Many unified communications systems also integrate security capabilities like intrusion prevention, anti-spam services and antivirus capabilities. COMMUNICATION SILOES LIMIT EMPLOYEE PRODUCTIVITY In a conventional communications system in the typical workplace each computer user normally has: An client that includes calendaring and scheduling (usually Outlook) Customer relationship management (CRM) software to manage and communicate with customers and prospects A desktop telephone An instant messaging client A mobile phone that, among other things, offers text messaging/sms services Availability of a departmental fax machine NON-UNIFIED COMMUNICATIONS CREATES PROBLEMS This configuration of separate communications tools and interfaces works reasonably well while the user is in the office, but there are some significant limitations. For example, messages are accessed in an client on the computer, calls are made and voic messages are accessed through the telephone, and instant messaging conversations are conducted in a separate client. When faxes are sent or received, users must walk to the fax machine and process individual pieces of paper. However, when users need to work remotely, their desktop telephone cannot be used, and faxes are largely inaccessible without the assistance of someone else in the office who can re-send or read the faxed information. The only communication mode that works more or less like that of the in-office experience is , normally accessed through a Webmail interface. Although this conventional and widely used approach to communications allows users to be productive to a point, consider the benefits of a unified communications system: Users can send or receive , make calls, access voic , conduct instant messaging conversations, and send or receive faxes from a single interface. Moreover, data can be shared digitally between all of these communication modes. All of these capabilities are accessible on any platform, regardless of location a desktop computer, a laptop or a mobile device and also using a thick client or a Web browser. CASE STUDY The City of Westerville, Ohio migrated to Google Apps and needed a new phone system that would provide full unified communications services within Google Apps. The city selected a Mitel phone system that was SIP integrated to the Esna UC&C application server. This extended Mitel dialing, presence and messaging services directly into Gmail and Google Apps, enabling employees to access voice and fax messages from Gmail and initiate calls off the Mitel phone system directly from Google Apps. UNIFIED COMMUNICATIONS MAKES PEOPLE AND COMPANIES MORE EFFICIENT Obviously, the unified communications scenario is preferable for users who need to work more efficiently, particularly when traveling or when they must work from home. However, such a unified communications system is also preferable for the IT and telephony groups in a company because they are not managing individual communication silos, but instead are managing a single, integrated system. This 2013 Osterman Research, Inc. 2

4 results in synergies that would not be possible in a conventional communications scenario. Organizations that deploy unified communications systems also benefit in several other important ways: Users with access to all of their communication tools from a single interface can be just as productive when on the road or when working from home (e.g., during periods of inclement weather) as when they are in the office. This gives decision makers the flexibility to allow their employees to work from anywhere, resulting in an enhanced user experience and potentially greater retention of employees. From a more strategic perspective, however, because employees who have access to all of their communication modes from a single interface can be highly productive, this allows organizations to operate with much less office space than would otherwise be required if an office or cubicle must be made available for every employee. Osterman Research estimates that the typical organization can save $600 per employee per year in just facilities costs when employees can work from home just one day per week the hoteling concept used by many companies, including Boeing and IBM. TOTAL COST OF OWNERSHIP CAN BE DRAMATICALLY LOWER WITH AN OPEN SOLUTION More important, however, are the costs associated with the particular unified communications solutions that will be deployed. For example, an organization of 5,000 users that deploys a combination of on-premise Exchange and Lync will spend roughly $4.8 million for basic unified communications functionality, but could spend up to $9.5 million for a fully configured system that includes compliance-focused archiving, Lync Online Voice and voic . This translates to a per user cost, assuming a three-year lifecycle, of $27 to $53 per month. However, using an open approach such as Google Apps in combination with Esna solutions the annual cost would be $65 to $120 per year, or $5.40 to $10.00 per user per month. TAKING A STRATEGIC APPROACH TO UNIFIED COMMUNICATIONS Once the decision has been made to adopt unified communications and to realize the cost and efficiency benefits that it can provide, the next decision comes down to what type of unified communications system should be deployed. While there are a number of unified communications vendors offering a variety of solutions, the decision really comes down to whether a single vendor or open approach should be followed. USE OF A SINGLE VENDOR APPROACH The use of a single vendor unified communications system does offer some advantages. For example, Lync s unified communications platform integrates instant messaging, voice, audio, video and Web conferencing services via a single interface. Lync also integrates presence management so that ad hoc voice calls and video meetings can be initiated quickly between team members and others on Lync. Lync integrates with non- services as well, such as AOL Instant Messenger and Yahoo! Messenger. Although Lync provides solid functionality, perhaps its most important benefit is that it comes from a leading vendor. Given s position in the communications, THE HOTELING CONCEPT If a 500-employee company has a teleworking plan, it can reduce its office space by 20% if each employee works at home just one day per week. This reduces office space by an average of 150 square feet per teleworker (cubicle, common space, etc.). If office space is $20 per square foot per year (typical cost in an urban area), the cost savings are $600 per employee: Without telework: Space for 500 employees x 150sf each x $20/sf = $1.5 million With telework: Space for 400 employees x 150sf each x $20/sf = $1.2 million Savings: $300,000 or $600 per employee ($300, employees = $600) 2013 Osterman Research, Inc. 3

5 applications and server markets, the decision to implement s single vendor technology approach can be easily defended. However, the disadvantage of using any single vendor technology, particularly for a critical infrastructure backbone like unified communications, is that it provides minimal interoperability with solutions from other vendors. Whether for corporate politics or other reasons, quite often a single vendor technology simply will not interoperate with leading competitive solutions, thereby limiting the utility of the technology to a reasonably small subset of the user environment. Also, many single vendor solutions like Lync require significant investments to deploy and manage. They do not allow full value to be extracted from existing solutions because of the rip-and-replace nature of their deployment and they permit less organizational flexibility than most organizations prefer. USING A BEST-OF-BREED APPROACH Using an open approach to unified communications, on the other hand, provides more flexibility because adopters are not wedded to a single vendor approach. Other important advantages of an open approach to unified communications include: As with many leading, single vendor solutions, an open unified communications technology can provide the same high level of robust functionality. There are several vendors in the space that have a long track record in providing cloud services, presence and interoperability vendors that have expertise and experience in offering highly scalable and efficient unified communications platforms. Open approaches are consistently less expensive than single vendor solutions and offer much lower total cost of ownership initially and over the long term. For example, when the vendor of a single vendor solution is selected to provide unified communications or other functionality, the customer is more or less locked in to that vendor and the associated third-party ecosystem unless they opt to undergo an expensive rip-and-replace exercise to switch to another vendor. However, when an open vendor is used, this provides forward flexibility that enables switching to another vendor s underlying technology without a complete rip-and-replace. This offers decision makers a somewhat safer decision, a less costly migration path, and the ability to change vendor direction much more easily. Open solutions are better suited to help organizations realize the full value from their existing hardware and software deployments. Because the right open solutions can be integrated into existing infrastructure, this further drives down the total cost of ownership because of the extended life of existing systems. Open solutions are better suited to help organizations realize the full value from their existing hardware and software deployments. Because the right open solutions can be integrated into existing infrastructure, this further drives down the total cost of ownership because of the extended life of existing systems. The net result is much greater organizational flexibility because of the wider interoperability of open solutions and the longer life of the existing infrastructure. PRICING COMPARISON A comparison of the costs of Lync with Google Apps/Esna will vary based on the size of the organization, the specific features to be deployed and other factors. However, a review of the following table demonstrates the dramatically lower cost of ownership when using a combination of Google Apps and Esna Unified Communications for Google Apps compared to Exchange in combination with Lync or Office 365 in combination with Lync or Lync Online. Just using these rough comparisons, a 1,000-user organization will save $286 per user, per year using a combination of Google Apps and Esna Unified Communications for Google Apps compared to on-premise offerings from ; savings will be 2013 Osterman Research, Inc. 4

6 lower when comparing Office 365 to Google Apps/Esna, but are still substantial at $154 per user per year. It is important to note that there are other cost savings, as well, including: Avoiding the cost of replacing a PBX by extending its life until it needs to be replaced instead of replacing it prematurely. Avoidance of rip-and-replace costs in mixed environments. Power costs, which can total several thousand dollars per year in larger environments. No need to purchase mobile phones for users because of the ability of Google Apps/Esna to interoperate with any mobile OS. Three-Year Cost Comparison of On-Premise Exchange/ Lync vs. Esna/Google Apps Annual Costs per User Exchange Google Apps/ Esna Server (Dell PowerEdge T510) $9,512 - Three-year 24x7 support, four-hour response $8,796 - AV/AS appliance (Barracuda Spam & Virus Firewall 200) $4,397 - Exchange Server software $15,996 - Exchange Client access licenses, 1,000 $67,000 - Exchange software maintenance for 1,000 clients $105,000 - Windows Server 2008 $14,796 - Exchange Server OS software client access licenses or equivalent $38,951 - Outlook, 1,000 $100,000 - Google Apps - $150,000 Lync Google Apps/ Esna Server (Dell PowerEdge T510) $9,512 - Three-year 24x7 support, four-hour response $8,796 - Lync Server Software $3,999 - Lync Instant Messaging and Presence $138,000 - Lync software maintenance for 1,000 clients $69,397 - Unified Communications for Google Apps - $90,000 Labor Google Apps/ Esna IT admin cost (Year 1) $160,000 - IT admin cost (Year 2) $168,000 - IT admin cost (Year 3) $176,400 - TOTAL $1,098,552 $240,000 TOTAL PER USER PER YEAR $366 $80 Note: 2.0 FTE IT admins required to support the environment Source: Osterman Research estimates and published data 2013 Osterman Research, Inc. 5

7 Basic Pricing Comparison of Office 365/Lync vs. Esna/ Google Apps Annual Costs per User Function , word processing, spreadsheet, presentations Unified communications (mobility, speech and presence services) Office 365 Plan E2 Lync Online Plan 2 Google Apps/ Esna Google Apps/ Esna Google Apps $168 $50 Unified Communications for Google Apps $66 $30 TOTAL PER USER PER YEAR $234 $80 Another consideration when comparing the cost of competing on-premise solutions is the complexity of the architecture required to support unified communications. While s unified communications solutions offer robust functionality, they require the use of multiple servers to perform the various roles associated with unified messaging, fax services, speech services and other critical roles. Moreover, the cost of the stack is relatively expensive compared to other solutions, particularly for video functionality. Some solutions, such as Esna s, can satisfy these roles using a much less complex, single-server approach. In fact, a hybrid approach that allows enterprises to connect to third-party applications can provide additional benefits and potential cost savings. While Lync integrates with a variety of third-party applications, services and systems, it may not satisfy all of an organization s integration requirements. THE IMPORTANCE OF INNOVATION Another important issue to consider is not only the current offerings from a particular provider or the cost of obtaining these solutions, but also the innovation that a provider can offer that will add value over time. For example, in the context of unified communications, Google offers Hangouts, a video conferencing service that enables up to nine people to participate in a group video session. Google+ is a rapidly growing social network that provides a number of innovative features like grouping particular users into circles, or affinity groups with whom users can share only certain types of information. Google is one of the top two mobile platform providers and continues to provide innovative solutions to integrate unified communications and other technologies into the mobile experience. Esna is working closely with Google to enable new and innovative applications that will expand the envelope of unified communications. For example, Esna federates live phone status and federates presence into the Google cloud which, in turn, can feed into any new Google applications. This enables Gmail to become a full collaboration interface using a completely Web-based set of applications. SUMMARY Unified communications offers any organization a wide range of benefits, not least of which is the ability to enable telework and other remote work more effectively by providing users with a consistent interface to all of their communication and collaboration functions. However, there are various ways of deploying unified communications, using single vendor approaches or those that are based on open systems. The latter, while providing more flexibility in how systems are deployed, is also significantly less expensive than single vendor solutions. While the combination of Office 365 and Lync, and other single-vendor solutions, offer robust functionality, the single vendor approach is much more expensive than a CASE STUDY Township High School District 214 in Illinois migrated to Google Apps in They needed a UC solution that would improve the current system in place, but maintain the functionality that was already available. Esna Office-LinX seamlessly connected their phone system to Google Apps and provided the staff with single inbox access to all voice and messages, presence information shared across Google Talk and Calendar and fixed-to-mobile convergence Osterman Research, Inc. 6

8 multi-vendor, open approach such as the combination of Google Apps and Esna Unified Communications for Google Apps. ABOUT ESNA Esna is a global leader in cloud-enabled unified communication and collaboration solutions. Esna integrates cloud, mobile and social communications on any device and with business applications from Google, VMware, and Salesforce.com. Esna gives millions of information workers the freedom to choose how, when and where they communicate and collaborate with one another. Thousands of organizations across the globe have increased productivity, improved collaboration and reduced communication costs with Esna. For more information, please visit Osterman Research, Inc. All rights reserved. No part of this document may be reproduced in any form by any means, nor may it be distributed without the permission of Osterman Research, Inc., nor may it be resold or distributed by any entity other than Osterman Research, Inc., without prior written authorization of Osterman Research, Inc. Osterman Research, Inc. does not provide legal advice. Nothing in this document constitutes legal advice, nor shall this document or any software product or other offering referenced herein serve as a substitute for the reader s compliance with any laws (including but not limited to any act, statue, regulation, rule, directive, administrative order, executive order, etc. (collectively, Laws )) referenced in this document. If necessary, the reader should consult with competent legal counsel regarding any Laws referenced herein. Osterman Research, Inc. makes no representation or warranty regarding the completeness or accuracy of the information contained in this document. THIS DOCUMENT IS PROVIDED AS IS WITHOUT WARRANTY OF ANY KIND. ALL EXPRESS OR IMPLIED REPRESENTATIONS, CONDITIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE DETERMINED TO BE ILLEGAL Osterman Research, Inc. 7

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