This is Part 3 of a 3-Part Series click here for part 1 or part 2 

OCS Offers Unique Cost Effective Capabilities

During his VoiceCon keynote address, Gurdeep referenced two ROI studies; one by Forrester Research and one by Microsoft on their own internal OCS implementation. Both studies showed impressive results, but very few details about the studies were provided. For example, was the Forrester study for OCS or UC in general? The Forrester study was based on a 4,000 employee implementation with benefits over a three year period. The results are outstanding; break-even in two months, and a three year projected savings of $56 million! Impressive results! Really the only topic necessary for a one-hour keynote. Unfortunately Gurdeep only spent a few minutes on it. The one slide he presented showed that $20 million of the $56 million in savings were in soft costs (increased productivity, reduced travel, reduced time to complete projects, reduced sales cycles). The hard costs were associated with reduced conferencing and reduced telephony charges.

The Microsoft ROI was even more impressive, demonstrating how Microsoft saved $212 million over one year, representing an ROI of 240%! Again few details were provided, but over 56% of the savings were productivity gains and reduced travel. These ROI’s seem a bit suspicious, almost like IT Director Maddoff at work. Though probably not material, I assume Microsoft assumes a zero cost for Microsoft software licenses on internal projects.

But accepting these studies at face value still begs the question of OCS vs. UC. In other words, would the results be significantly different (better or worse) with a different UC solution? Reducing travel via a solid investment in conferencing and collaboration solutions makes a lot of sense, I am sure Avaya, Cisco, Mitel, and others all have some similar case studies. A significant portion of the productivity enhancements comes from presence information, but there are a variety of solutions on the market (many for free) that provide presence information for far less money. Plus, the OCS solution doesn’t address mobile users at this time – both Mitel and Avaya offer presence information even when using the cell phone – that likely offers even greater improvements on productivity measures.

Organizations Must Take a Radical Transformational Approach to Telecommunications and UC to Survive

As the overall recurring theme of the presentation, Gurdeep tried very hard to position Microsoft OCS as a radical transformational software-based approach to UC, and he positioned the established PBX vendors as hardware-focused anachronisms dangerous to the future prosperity of any organization that embraces them. Throughout his presentation, he compared the PBX makers to the “Brother Word Processor” – a separate desktop device that the PC replaced with its multipurpose capabilities. He said you can rename the PBX “Call Manager” but it is still a PBX. At one point, he held up a popular IP phone and an entry-level Walmart notebook (netbook?) stating that someday soon the CFO will only approve one $300 desktop purchase– pick one.

This aspect of the presentation was highly memorable and effective. You can see the (telecom) audience mentally evaluating the proposition and realizing the versatile notebook is a better buy if forced to choose. In many ways, I completely agree with this – I’ve written several times how frustratingly limited the IP phone is – that the value proposition of the IP phone needs to change. Many PBX vendors have exploited the desktop (not just Microsoft) – with robust features on a full screen putting the phone experience to shame. If I could preach to a full room as Gurdeep did, I might do a similar stunt – though more likely comparing the IP phone with an iPhone seeking a similar response.

But Gurdeep cheated a bit here. First off, while I agree that both the IP phone and the netbook are priced about the same, their cost isn’t the same. The notebook has a much higher total cost of ownership. The computer will require enterprise licenses from companies like Microsoft (Office). It will require virus protection, and ongoing administrative support to update and repair. The phone won’t. Enterprises don’t really buy $300 netbooks from Walmart either, but more like $1500-$3000 notebooks (plus the previously mentioned TCO elements). Nor do these items have the same expected lifespan – the phone will probably last 5-8 years in an enterprise and still have some residual value after that and the notebook will likely last less than two years, with no residual value. Based on this approach, the CFO may make the choice for us, and pick the phone.

I also don’t agree with Gurdeep’s portrayal of the PBX companies. The major PBX vendors all are enhancing their products with UC applications. They all have presence capabilities, some have mobile and telecommuting applications, and most offer integration with OCS. All of them offered hunt group support, boss/admin, and soft consoles for the past 10 years. And yes, their basic user experience around PBX functionality (specifically the phone) hasn’t changed much lately – but that isn’t all bad compared to the learning curve associated with Office 2007.

I don’t really understand the “transformation” Gurdeep was describing. I assume he is referring to the older TDM based phone systems still out there from long ago versus the UC solutions available today. It may not be appropriate to replace an old, obsolete system if it is meeting the needs of its customers. I understand and agree that OCS offers a radically different approach to telecom than those systems. But I don’t agree that the UC vision OCS offers is radically different than any of the major enterprise PBX manufacturers. Every solution is different, every solution has its strong points, but every major enterprise switch player has a UC story. The “transformational” approach may be relevant to upgrade/replace conversations, but assuming we are past that, and comparing different UC solutions, I don’t think the word “transformational” applies as a differentiator.

I am a proponent of OCS and look forward to learning more about it and watching it grow and mature. I don’t mean to belittle the product in anyway; my point is that Gurdeep’s infomercial had some flawed logic. Phone systems are funny and like cars, there is a reason why there are so many different models to choose from – because there are so many different needs. Even Microsoft isn’t putting all of its eggs in one basket, and is courting the smaller businesses with Response Point.

PBX solutions continue to surprise me because customers use them so differently. Cultures and values of customer organizations vary widely – mobility, cost, vendor biases, voice mail vs. email, the types of phones they choose (full featured or basic), etc. One solution clearly does not fit all – don’t believe it on clothing or UC solutions.