WHITE PAPER Microsoft Lync and ShoreTel UC: A Competitive Analysis
Table of Contents 1. Introduction...3 2. What is Unified Communications...3 3. A brief history of Microsoft s Unified Communications strategy...4 4. ShoreTel s approach to Unified Communications...5 5. Side-by-side comparison of Lync 2013 and ShoreTel...5 6. Integration...11 7. Conclusion...12
1. Introduction The Unified Communications (UC) industry is expected to grow by 30 percent between 2013 and 2018 1. As UC in the cloud becomes an increasingly popular delivery method, companies are seeking to develop new product offerings that will excel within previously established markets, venues and customer base. Microsoft is perhaps one of the most recognized brands in the world, but its entry into the enterprise voice space is relatively recent compared to veteran IP telephony vendors. Microsoft established its Unified Communications Group (UCG) in 2006 to spearhead its efforts into IP telephony. Since then, the group has released versions with increased capabilities and functionality, most recently with its Lync 2013 product. In contrast, ShoreTel has been a staple of the UC industry since 1996 with consistent market growth, product innovation and application enhancements. This whitepaper examines how these two companies compare, both product offerings and go-tomarket strategy. 2. What is Unified Communications The desire for a faster, easier and media-rich connection linking employees with companies gave rise to the unified communications industry. IP telephony, email, audio/video/web conferencing, mobile phones, and instant messaging are a few of the technologies that are now standard requirements for enterprises of all sizes, Seamlessly integrating these capabilities in real-time with existing and emerging business applications, enabling collaboration regardless of location, is the current driver for providers. The collection of Unified Communications components vary by provider, however the most common are: an Internet Protocol (IP) network a group of computer hosts that share a common physical connection and use IP for communication an IP telephony capability, often referred to as Voice over Internet Protocol (VoIP) phone service using the Ethernet, router and the Internet Integration software desktop software to enable integration of services and applications 1 Synergy Research Market Data, UC Applications, 2014 Q2. Page 3
Mobile options soft phones or smart phones to allow easy access from anywhere Security features integrated elements to ensure restricted access to the network instant messaging real-time communication between employees, partners and vendors Conferencing video, audio and web-based meetings Presence details the ability for users to view other s availability in real-time Collaboration tools ability to share documents and make real-time updates The recent launch of Microsoft Lync 2013 will no doubt make an impact in the UC market. A comparison of Microsoft s products with those of ShoreTel is detailed below. 3. A brief history of Microsoft s Unified Communication strategy Microsoft launched Live Communications Server in 2003, replacing the presence and IM features of Exchange 2000. Microsoft branded the product as a manageable and extensible Instant Messaging (IM) solution and platform. After a couple of modifications, it renamed the product Office Communications Server (OCS) 2007 with the addition of VoIP, voice and conferencing features. In 2010, it renamed the product Lync, touting it as the next generation of Microsoft s unified communications software that enables people to connect in new ways, anytime, anywhere. Its newest release is Lync Server 2013. In 2013, Gartner rated Microsoft as Promising in its study 2 of top UC vendors, the third highest possible rating, behind Positive and Strong Positive. Perhaps one of the reasons the company only faired average is that Gartner sites Lync implementations to be complex and requiring significant IT staff resources and channel partner integration expertise. 2 Megan Marek Fernandez, Jay Lassman, MarketScope for Unified Communications for SMB Market, North America, Gartner, Inc., Aug. 21, 2013. Page 4
4. ShoreTel s approach to Unified Communications ShoreTel entered the IP telephony market in 1996 and made its first installation of a distributed IP PBX with desktop applications and web management in 1998. By the end of 2000, the ShoreTel solution included unified messaging, presence, distributed voicemail, integrated workgroups and an international dial plan. Intercom, soft phones, Find Me, web client, monitor and barge, and Windows terminal services were added in 2003. Over the next decade, ShoreTel s capabilities and features expanded to provide one of the most robust unified communications platforms in the industry, including PSTN failover, mobility solutions, enterprise contact center, video conferencing and cloud service delivery, to. In 2013, Gartner gave ShoreTel the highest rating, Strong Positive, for Unified Communications for the SMB Market in North America; ShoreTel is the only company to receive that highest ranking for four consecutive years. 5. Side-by-side comparison of Lync 2013 and ShoreTel Lync 2013 consists of Lync Online, a hosted version not requiring any customer premises equipment; Lync Hosting Pack v2 (LHP), a multi-tenant version for service providers; and Lync Server, the onpremises version of Lync. Lync Online Lync Online is hosted in Microsoft s data center and costs $2 to $5.50 per user per month, making it specifically targeted to SMBs. It can also be purchased as part of Office 365. It includes: Lync-to-Lync IM, voice and video chat Lync meetings Lync mobile While Lync Online offers strong Lync-to-Lync and meeting features, its reliance on service providers for enterprise voice features and PSTN calling make it difficult for businesses to use it as a replacement for existing telephony services. ShoreTel offers its hosted VoIP via ShoreTel Sky. It is conveniently priced on a per-user basis, making it attractive for SMBs. It includes robust enterprise voice features and provides users with a seamless, tightly integrated end-to-end experience. Page 5
Lync Online vs. ShoreTel Sky Category Lync Online ShoreTel Sky Cutomer Impact Enterprise no native enterprise voice 90+ Enterprise Voice features Voice features Service Continuity Reliability some enterprise voice features may be available through Microsoft partners Microsoft has shifted its strategy with Lync Online several times tiered credit SLA starts at 99.9% office 365 uptime has not exceeded 99.99% office 365 has experienced several widely-publicized outages since 2011 shoretel Sky has provided hosted voice services since 2000 shoretel Sky provides customers with a 99.99% SLA Lync Online cannot provide enterprise voice features on its own. Businesses must rely on partners, which increases the cost and complexity of the service investment in Lync Online can be risky, given Microsoft s frequent shifts in strategy shoretel Sky has a long history of providing business voice services to customers office 365 has a history of outages, since the service was launched in 2011 shoretel Sky s SLA provides credits if service availability is less than 99.99% Lync Hosting Pack v2 While the IM/presence and meeting capabilities of Lync Hosting Pack v2 (LHP) are mature, it is deployed, maintained and updated by the service provider. The quality and reliability of LHP services strictly depends on the service provider. LHP is targeted at SMBs and mid-market firms. It includes the same features of Lync Online, as well as PSTN calling and enterprise features, provided by service providers. It does not have advanced enterprise voice features such as call park and remote call control. Lync Hosting Pack v2 See table on next page Page 6
Category Lync Hosting Pack ShoreTel Sky Customer Impact Company Background/ Financial Stability Many LHP providers are small firms with limited financial transparency shoretel is a publicly traded company with extensive cash reserves and little debt Reliability few LHP service providers offer an SLA shoretel Sky provides customers with a 99.99% SLA Customer Service Product Updates Installation, Training & Support Administration Enterprise Voice it is often difficult to assess the level of service provided by an LHP service provider LHP providers are responsible for updating and maintaining software customers will likely have no assurance that their service provider is using current versions of LHP software Unknown, varies by provider Varies by LHP provider since hosted PBX services are separate from LHP services, customers will likely need multiple administration interfaces to managed PBX and UC services additional services, such as contact center, are provided by third-parties and require separate admin interfaces LHP lacks integrated enterprise voice features, such as call park and remote call control shoretel Sky publishes its support metrics, including average time to respond and resolve issues ShoreTel s Net Promoter Score is the highest among its peers shoretel Sky continues to invest heavily in innovating its call control platform shoretel Sky installations are managed by professional project managers call flow setup is included on-demand support & training are available with the push of a button shoretel Sky Portal provides customers with an intuitive web-based interface for managing Sky services internally 90+ Enterprise Voice features Contact Center none, requires third-party software shoretel Sky is available with a tightly integrated contact center offering Audio Conferencing Application Integration Licensing Must be enabled by a third-party audio conferencing provider Support varies by LHP provider LHP lacks an integrated contact center solution, increasing the cost and complexity of application integration projects hosting partner must purchase Subscriber Access Licenses on the behalf of customers Existing customer agreements can increase the complexity of licensing, with both service provider and customer purchasing licenses on-demand and scheduled conferencing options shoretel Sky enables integration with CRM, ERP and Applicant Tracking systems simple, per user subscription shoretel s financial transparency provides customers with confidence in their environment shoretel Sky ensures mission-critical voice services are available customers can be confident of ShoreTel Sky s customer service record it is unlikely that LHP providers will offer the same level of visibility into their service history, making investment in these firms risky shoretel Sky customers can be confident they are using the current version of ShoreTel software LHP customers may be stuck on older versions of LHP software until their service provider invests in an upgrade Many LHP providers are still offering hosted Lync 2010 shoretel Sky provides customers with comprehensive installation, training and support LHP providers are unlikely to offer the same level of support to their customers shoretel Sky provides customers with a simple interface for all services LHP customers will likely be forced to use multiple interfaces for hosted PBX services, Lync and additional services such as contact center shoretel Sky has a mature enterprise voice feature set that is critical for high volume call environments shoretel Sky s integrated contact center offering saves installation and integration costs shoretel Sky s integrated audio conferencing capabilities reduce integration costs shoretel Sky and ShoreTel Sky Contact Center provides comprehensive integration with business applications LHP relies on third- party providers and/or service providers LHP licensing is complex, making it difficult for customers to understand actual pricing shoretel Sky s subscription is transparent and easy to manage Page 7
Lync Server 2013 Lync Server is the on-premises version of Lync and typically requires multiple servers, including Front End, Edge, Persistent Chat, Mediation, Director and Back End database servers. Exchange UM provides unified messaging capabilities. Lync Server 2013 IM, presence, chat, video chat and meeting features are robust and mature, however it is considered expensive to deploy by smaller firms. The many server roles of Lync 2013 represent a significant fixed cost, as well as variable costs for client licenses. For a high availability deployment, Lync Server 2013 has substantial minimum requirements, decreasing customer flexibility and increasing TCO. In a recent independent study conducted by Nemertes, ShoreTel was found to have the lowest annual operational cost across the top seven vendors while Microsoft had the highest, more than 400% higher than ShoreTel. Microsoft had one of the lowest capital cost per end unit but the high ongoing operational cost increase the TCO beyond what many organizations find acceptable. Lync Server 2013 vs. ShoreTel Category Lync Hosting Pack ShoreTel Sky Customer Impact Architecture Architecture centralized distributed or centralized High Availability Scalability Virtualization Investment Protection Lync Front End servers deployed at HQ. SBAs deployed at branches high Availability relies on pooling at HQ and SBAs at branches disaster recovery requires pools at multiple sites Lync 2013 has significant minimum requirements for an HA deployment that represents a substantial fixed cost for deployments up to about 12,000 hyper V VMware v4.x Live movement not supported (vmotion) Minimum hardware requirements of Lync 2013 have increased from Lync 2010 Lync 2010 customers near minimum requirements will need to purchase new hardware shoretel voice switches can be distributed across multiple sites n+1 redundancy redundant voice switches can be centralized or distributed Up to 20,000 users Modular scalability enables businesses to add capacity incrementally VMware 4.x vmotion and other VMware features supported Voice Switches can be virtualized with 14.2 additional Voice Switches can be added as needed to existing switches investment in Voice Switches is always protected Lync s centralized architecture provides less flexibility than ShoreTel. The Lync FE server pool with SBAs at branches will generally be more expensive to deploy shoretel customers have a number of flexible, HA deployment options ha Lync Server 2013 deployments are costly and inflexible Lync 2013 may be too expensive for businesses up to 12,000 users shoretel allows businesses to deploy a solution that closely meets users and availability requirements Lync Server 2013 virtualization options aren t practical for smaller firms shoretel s virtualization options provide added flexibility and TCO savings increased hardware requirements will likely force businesses to purchase new hardware to migrate shoretel allows customers to scale, protecting prior investments in hardware Page 8
Category Lync Hosting Pack ShoreTel Sky Customer Impact Total Cost of Ownership Hardware Acquisition Cost Minimum Hardware Requirements Software Acquisition Cost ha deployments require 20+ servers hardware requirements for FE servers are substantial 64-bit dual processor, hex-core 2.25 GHz or higher 32GB RAM 8+ 10,000 RPM HDD, 2 using RAID 1, 6 using RAID 10 Each FE server requires Lync 2013 DBs require SQL all servers require Windows Server Plus CALs for each enterprise voice seat Operational Costs the cost of Lync internal staff is $217 per user compared to a median of $162 Lync training costs are $160 per user compared to a median of $100 equipment maintenance and the cost of third-parties are significantly higher than the industry median Administration administration complexity increases operational costs Multiple admin interfaces certification increases salary costs Voice Switches can be added incrementally service Appliances or industry standard servers used for HQ servers Medium deployment of 2,500 users requires: intel Xeon 5520 Single Quad Core 2.27 GHz 8 GB RAM Voice Switches require no additional hardware only HQ Server and Distributed Voice Servers require software and Windows Server shoretel operational costs are on average 33% lower than the industry median the cost of ShoreTel internal staff is 19% less than the median equipment maintenance is 33% lower than the median the cost of third-parties and training are half of the median cost single admin interface MAC-Ds can be performed by average PC users simplicity results in lower admin costs & salaries Call Management Call Handling Lync s only option is do not disturb five call handling modes can be customized Modes set manually or automatically Call Park calls put on hold into Parking Lot calls can be parked at extension Transfer hyperlinks enable other users to pickup call options for call park, transfer to other numbers or voicemail recipient can be alerted with intercom or page consultative, intercom and whisper transfer options for users or voicemail the upfront investment for Lync 2013 is substantial a variety of ShoreTel Voice Switches can be used to minimize hardware costs Lync 2013 requires costly hardware for any deployment shoretel hardware requirements vary based on deployment size and are lower than Lync 2013 requirements, even for large deployments Minimum requirements for Lync include 20+ servers and the software acquisition cost can be substantial shoretel server and software requirements are less, lowering acquisition costs Lync operational costs are nearly 200% greater than the industry median and 290% greater than ShoreTel the substantial operational cost of Lync are due to challenges related to integration and sound quality ongoing administrative costs are lower with ShoreTel due to administrative simplicity shoretel s multiple call handling modes eliminate the need to manually change messages and call forwarding rules shoretel provides audible means of alerting recipients Lync relies on IM/parking lots Lync s transfer options are manual and require multiple steps shoretel provides additional call transfer options with quick access to features Page 9
Category Lync Hosting Pack ShoreTel Sky Customer Impact Other Calling Features Recording Intercom, Paging, Night Bell recording is limited to Lync to Lync calls, no regular phone call recording outside of meetings not native to Lync but can be enabled by third-party shoretel allows users to record their own calls and calls of other users recordings can be delivered to voicemail or sent via email calls can be placed simultaneously to multiple users through the intercom calls can be broadcasted through paging system by dialing page extension site-wide signaling and pickup from dial menu Call Intervention none Various intervention types, including Barge In, Silent Monitor, Silent Coach and Whisper Clients Client Types Lync 2013 Lync Basic 2013 Lync Windows Store App Mobile-Windows Phone, ios, Android and Symbian Lync for Mac 2011 communicator (Windows, Mac) communicator for Web Mobility Client (ios and Android) Client Access Levels single level of access Web Personal Professional Workgroup Agent Access Workgroup Supervisor operator Client Customization interface is largely static slight modifications can be made when viewing videos drag and drop window arrangement Buttons can be added/hidden toolbars can be rearranged Lync does not support recording regular calls shoretel provides numerous recording options for internal and external calls Lync customers incur additional expense for these features integration of intercom, paging and night bell features give customer options the lack of intervention capabilities makes Lync a poor fit for customers with high call volume shoretel gives customers numerous options Lync 2011 client for Mac was only recently updated for Lync 2013 and still lacks some features of the Lync 2013 client Lync has limited options shoretel s multiple access levels enable customers to deploy a solution tailored to end-user needs Lync 2013 client lacks flexibility and can be confusing for users shoretel Communicator can be customized for different user roles and capabilities Page 10
6. Integration It is not an all or nothing proposition when it comes to Microsoft Lync and ShoreTel. Organizations already deployed on a Microsoft system may prefer to standardize on that application, rather than force end-users to switch. ShoreTel Innovation Network Partner, ilink recognizes that every organization has a different approach and a unique roadmap for UC. As a result, no one size fits all, so the ilink integration allows customers using both ShoreTel and Microsoft products in their UC deployment to individually mix and match features of both products. Remote Call Control Once integrated with the ShoreTel UC system through the ShoreTel CSTA Server, the Microsoft UC client can control any telephone (analog or IP) connected to the ShoreTel system and trigger telephone calls by clicking on the contact name in the Microsoft UC client. The Lync screen popup for incoming ShoreTel calls is also supported. Telephony Presence A Microsoft UC user can now display telephony presence in addition to instant messaging (IM) status to all their contacts, including those in outside organizations federated with them. RCC-enabled Lync users can now pin their contacts and call them as soon as they receive notification that they have become available. Ultimately organizations can leverage existing investments and reduce training requirements, thus improving productivity with telephony presence and alerts. Page 11
7. Conclusion While Microsoft will inevitably continue to expand its offerings and services, its approach to Unified Communications will likely require heavy reliance on third parties and service providers. ShoreTel s end-to-end solution is developed internally, including phones, advanced features and applications, service delivery platforms and combined with worldclass customer service. When weighing UC provider options, buyers might find that the Lync product s ongoing system management and operational costs are hard to justify when more robust solutions like those from ShoreTel exist for a fraction of the overall cost. There are many factors to consider when determining which UC provider best fits a company s current and future business communications needs. Both Microsoft and ShoreTel are well-known names in the industry, but they differ greatly on their approach and focus toward unified communications. ShoreTel, Inc. (NASDAQ: SHOR) is a leading provider of brilliantly simple IP phone systems and unified communications solutions powering today s always-on workforce. Its flexible communications solutions for on-premises, cloud and hybrid environments eliminate complexity, reduce costs and improve productivity. World Headquarters 960 Stewart Drive Sunnyvale, CA 94085 USA shoretel.com +1 (800) 425-9385 Toll Free +1 (408) 331-3300 Tel +1 (408) 331-3333 Fax EMEA Inspired Easthampstead Road Bracknell, RG12 1YQ +44 (0) 1344 208800 Tel APAC 8 Temasek Boulevard#41-03 Suntec Tower 3 Singapore 038988 +65 6517 0800 Tel Copyright 2014 ShoreTel. All rights reserved. The ShoreTel logo and ShoreTel are registered trademarks of ShoreTel, Inc. in the United States and/or other countries. All other copyrights and trademarks herein are the property of their respective owners. Specifications are subject to change without notice.