Several weekends ago, I was in Santa Barbara, shopping with my family at a clothing store – part of a medium-large, California chain – when I noticed that they were using some old Nortel phones. While my daughter looked meticulously for her perfect dress, I counted about five extensions across the store. That meant potentially 250-400 phones across their many locations throughout the State.
Why hasn’t a company like this upgraded its phone systems?
There could be several reasons. Its core business is clothing, not IT. With few extensions per locations, and so many locations throughout California, it could be very expensive for them to do a forklift upgrade. Furthermore, a new phone system could incur additional costs due to managing adds/moves/changes and, potentially, to the need to rewire the entire IP phone system.
In the U.S., small businesses like this retail outlet dominate the economy, with over 99.8% of companies having fewer than 1,000 employees, according to U.S. Economic Census statistics. They tend to be very dynamic, fast-growing and entrepreneurial. However, like this store, they focus their financial resources on their core business and seldom have IT groups that can support all of their locations.
Therefore, the cost of upgrading and operating their communications infrastructure are key concerns for business owners.
With that in mind, a few months ago we commissioned a research firm, The Tolly Group, to calculate the Total Cost of Ownership (TCO) of our latest product targeted to small and medium enterprises (SMEs), Avaya IP Office 8.1, and compare it to ShoreTel’s comparable Unified Communications Platform.
You can download the entire report here.
Why do we focus on ShoreTel? Because ShoreTel has an effective marketing campaign around the moniker of “Brilliantly Simple,” and also offers a lowest TCO guarantee to its customers. Hence, it provides the right benchmark.
View full-sized chart by clicking here
So what did Tolly conclude? That Avaya IP Office 8.1 on average provides 32% TCO savings versus ShoreTel. Furthermore, Avaya IP Office 8.1’s Capex and Opex are lower than ShoreTel, across any configuration tested for 100, 400 and 700 users. Over 5 years, that adds up to tens or hundreds of thousands of dollars saved.
View full-sized table by clicking here
Tolly isn’t the only analyst firm to find Avaya a better financial deal than its competitors. Nemertes Research finds Avaya to offer a first-year TCO less than half of Microsoft Lync, while Constellation Research found Avaya’s video solutions to offer a lower TCO than both Microsoft and Cisco.)
Small companies are very dynamic and many plan to rapidly grow. However, most lack a large IT department – if they have any full-time administrators on staff at all. Hence, the ability to easily scale their solution as they expand is key. Tolly reports that, “In addition to a 10 minute deployment, the [IP Office 500] appliance hosts an integrated storage module, capable of capturing 380 hours of voicemail or call recordings, and can scale to nearly 400 users without any additional hardware.”
Flexibility and Efficiency
Just like the retail store in Santa Barbara, many companies have successfully deployed Nortel solutions in the past. Investment protection becomes critical to limit expenses. In this regard, Tolly notes that: “Furthermore, IP Office provides greater deployment flexibility, as nearly all Avaya/Nortel phones manufactured in the last decade are compatible.”
Flexibility is also key when you have young workers, as the retail outlet I visited did, who sport smartphones and tablets they would like to use at work. Well, IP Office enables BYOD. For instance, employees can run an app on their smartphone that turns it into an extension of that Nortel phone behind the counter. That untethers employees, by letting them roam the store floor and still answer incoming calls. Voila! You’ve killed two birds with one stone.
Young workers and customers are also very conscious about the environment. A Green strategy can be crucial to a company’s go to market. Tolly found that “the Avaya phones exhibited up to 41% lower power consumption than the comparable ShoreTel phones”. For a retailer with 700 extensions in total, that works out to 1kW saved using Avaya IP Office.
And finally, customers need to account for the administration cost. And Tolly again concludes that “in contrast, the ShoreTel solution was more complex to upgrade, as both the ShoreGear appliance and the application server may need to updated. Updates from different versions might also require a conversion from one type of database to another.”
The Bottom Lne?
With Avaya IP Office, small yet vibrant enterprises can now afford to upgrade their telephony system and enjoy the benefits of modern Unified Communication and Collaboration. New SMEs can also now effectively equip their business with a state of the art collaboration solution that is light in cost and rich in functionality, such as allowing a business owner to increase the productivity of his or her sales force with a mobile BYOD solution.
Helping these customers save 32% versus ShoreTel will enable them to invest more in their core business and grow faster and more profitably.
I find this really brilliant. And really simple.