Hey Midsized Businesses! Avaya Is One-Third Cheaper Than ShoreTel

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.

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 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.

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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.

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What Smart Analysts Think About Microsoft's Lync Telephony Claims

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The big brains at UCStrategies had a very relevant podcast last week. Ten of the Unified Communication industry’s leading independent analysts weighed in on Microsoft’s recent claim that its Lync unified communications suite was “leading” in shipments of enterprise voice/telephony software.

Microsoft appears to be basing its claim on shipments of Lync voice, but doesn’t say much more. As a result, “there’s a lot of debate and discussion” about what Lync voice shipments actually mean, says UCStrategies analyst and podcast moderator Blair Pleasant. “Are they paid licenses, free licenses that customers get from enterprise CALs (client access licenses), (voice) seats actually being used and deployed, or (numbers) just out there because companies have Lync [suite]?”

One thing’s for sure: when you go by the tried-and-tested methodology of tracking the number of phone lines actually being deployed to users today, Microsoft isn’t on top according to any of the analyst firms. Indeed, according to one of the most respected market watchers, analyst Alan Weckel of the Dell ‘Oro Group, Avaya is actually number one in enterprise voice. My colleague Enzo Signore pointed this out in a blog several weeks ago – before the UCStrategies podcast.

There were too many opinions in UCStrategies’ 38-minute podcast to neatly summarize. Not all of them agreed with each other, of course. But here are the quotes that particularly stood out for me:

Blair Pleasant: “I personally have some issues with these numbers and what they mean…I don’t think it’s fair to say that Microsoft is a leader in enterprise voice at this point. Again, they’re doing gangbusters, but they’re still a niche player. And the companies I speak with aren’t rushing out to deploy Lync voice.

Marty Parker: “I think [Blair] you’re exactly right, that any claim like this should be greeted initially with some serious skepticism…Microsoft, pretty uniquely among the leaders, sells licenses far ahead of deployments. The number of licenses can be 2x or more what is actually being deployed. The deployment reports we’ve seen from a number of sources put Microsoft in the 5% range in terms of actual deployments for FY12. If you extrapolate from that 6-7% for FY13, and then double that, you get 13%…That is a number that wouldn’t stand up when someone goes out to use a rigorous approach to market share data. Maybe for shipments, but it doesn’t reflect reality on the ground.

Dave Michels: “I see a lot of firms deploying Lync. I don’t see a lot of firms deploying Lync voice…I also know from other observations that Microsoft is pretty shady about their numbers. A lot of other firms are very open. Microsoft is very secretive about this stuff. They don’t put a lot of detail behind this…It’s a whole different level of open-ness you don’t see with Microsoft.

Jim Burton: “When I was in debate in school, my Bible was a book called ‘Lying with Facts and Figures.’ I don’t think he [Microsoft blogger] lied, but the way he presented it was a bit of a misrepresentation, if you understood all of the facts.”

Roberta Fox: “It really wasn’t til late 2012 where Microsoft was considered for telephony or even desktop video. They really were not seen as reliable or credible telecom solutions from enterprise clients as replacements for their PBXes, due to concerns about reliability, availability and the feature set. Another interesting thought: there was very little interest in Lync for desktop video applications.”

I encourage you all to take a listen to this podcast.

How Mediocre Customer Service Is Driving Your Customers Away

Some companies drive away loads of customers with one big move. Like that department store chain that got rid of coupons and sales promotions. Its base of cost-sensitive mom shoppers quickly fled to other stores

For most companies, losing customers is a slow, inexorable process, that looks more like this:

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What’s the cause? In many cases, it’s weak customer service. Most companies over-spend on customer acquisition and under-invest on keeping existing customers happy. The result is statistics like this from Forrester Research:

There are many reasons why your customer service may be leaving customers less than thrilled. Customers are more diverse than before, for one:
Technology has also made customers more independent – and demanding. They want to be served right here, right now. 
Problem is that most companies, even if they talk the multi-channel talk, fail to walk the walk. Beyond voice, they may have deployed 1-2 additional ways for their agents to deal with customers. Turns out, there are a dozen channels besides voice that your customer may want – nay, demand – to be able to reach you on. Also, companies trying to deploy new contact center channels will, how can I be polite about this, often do it BADLY.
Do these problems sound familiar at all? Are they ones you want to solve? If so, you might consider attending the next Avaya Customer Experience webinar, ‘Where Did All of my Customers Go (and How Do I Win Them Back?)’
Broadcasting this Thursday Nov. 7 at 11 am PT (2 pm ET), it features a mix of experts in this area, including:
– Sheila McGee-Smith, independent customer experience analyst;
– Tony Bridgewater, Executive General Manager, Technology & Products, for Australian system integrator, Salmat;
– Mark Wilson, CMO for Avaya;
– Jeanne Bliss, our moderator, who writes and consults on customer experience and is a former Chief Customer Officer at multiple companies; 
Attendees to the webinar get a print copy of the book, Managing the Customer Experience, mailed to them.

Who's the Real Number One in Business Telephony?

The telephone is far from dead. You know who still loves to call people? Family members, close friends and…the Pope. No joke: 76-year-old Pope Francis has startled a quite a few strangers with a call from a Vatican landline in which he simply announces, “It’s the Pope.” It’s happened to enough people that the Corriere della Sera, a leading newspaper in my native Italy, published a front-page article offering tips on how to make small talk if His Holiness calls (tip #1: talk about soccer).

You know who else loves the telephone? Businesspeople. Unified Communications may be a diverse, ever-growing set of tools and technologies, but the channel that started it all still plays a central role. It’s why there’s a never-ending stream of articles advising how to schmooze colleagues on the phone, how to run your phone meetings, how to close sales deals on the phone, how to ace telephone job interviews, etc. The stakes are high, which is why telephony remains such a hotly-contested market.

Last week, Microsoft put out a blog claiming it is “now shipping more enterprise telephone lines than any other technology company in the world.” It was a bold claim. So bold that longtime industry expert, Eric Krapf of No Jitter, felt compelled to investigate. One respected market watcher, Infonetics’ Diane Myers, told Krapf that her own research – which shows Cisco and Avaya neck-and-neck far above other rivals in telephony – made her “struggle” with Microsoft’s claims. When Krapf confronted Microsoft’s spokespeople, they admitted that Redmond’s claim to have shipped the most telephony lines was based on different data, revenue. As anyone familiar with software bundling knows, revenue alone can paint a deceptive picture.

However, revenue COMBINED with other data CAN be illuminating. While Microsoft and Cisco bicker, they are ignoring what’s really going on in the voice market. According to the well-known telecom market research firm, the Dell’Oro Group, Avaya passed Cisco in Q2 this year in telephony according to two key metrics. First, powered by growth in our small and midsized UC solution, IP Office, the number of telephone lines Avaya shipped grew 10% quarter/quarter to 1.8 million, while Cisco’s slipped for the 3rd-straight quarter, according to Dell’Oro:

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Source: Dell’Oro Group

As a result, Avaya had a commanding lead of the global enterprise telephony market by revenue, both for Q2 2013:

Dell'Oro Global Enterprise Telephony Systems Q213 Rev Share.JPG


Actually, Avaya led Cisco by the same margin for all of calendar year 2012, too:


Dell'Oro Global Enterprise Telephony CY12 Rev Share.JPG


How come Microsoft’s nowhere to be found? We asked Alan Weckel, Vice President, Enterprise Telephony & Ethernet Switch Market Research at Dell’Oro and author of the report, who “confirmed that Dell’Oro Group does track Microsoft in the report. While Dell’Oro group does not break out Microsoft call control directly, based on the size of the remaining market, Microsoft would not be amongst the largest vendors on the charts.”

Why is Avaya gaining telephone users and increasing sales revenue? For a number of reasons:

1)The rock-solid quality of our flagship Avaya Aura platform (read how billion-dollar real estate firm Forest City Enterprises virtualized Avaya Aura software onto VMware and cut costs and increased reliability);

2)The cutting-edge advances in the Aura platform, including the new Collaboration Environment platform to enable developers to quickly build communications apps, and the Avaya Messaging Service that finally brings texting into the enterprise world (and supports any vendor’s system, even Cisco);

3)The quality and cost-competitiveness of Avaya IP Office;

4)The increasing attractiveness of IP Office 9.0 to the fast-growing mid-market segment;

Importantly, we see many customers that use the Microsoft Lync solution for IM and presence turning to Avaya for voice. Rather than deploying Lync software all the way or integrating with Cisco, hundreds of enterprises are trusting the Avaya Client Applications (ACA) plug-in, which offers scalability, ‘Five 9s’ of high-availability, technical features such as open call control, protection for your other communication investments, and tight integration with our contact center solution, which happens to be number one in the market according to Gartner.

Related article: Avaya’s New Wireless LAN 9100 Mutes the Sucking Sound of Network Downtime

ACA is not a tactical solution, either. Providing a comprehensive, open alternative for customers who wish to avoid vendor lock-in is part of the Avaya long-term strategy. Simply put, we want to be the best Lync integrator in the industry.

Lync software undoubtedly excels at IM and presence. But as Cisco Collaboration chief Rowan Trollope pointed out last week, IM and presence are last decade’s news. The future is things like enterprise-friendly text messaging (like Avaya Messaging Service) and open collaboration platforms that let businesses pick the best technologies for their needs.

So when you’re thinking about your UC solution, don’t think it’s only about Lync software vs. Cisco vs. Avaya. The telephone isn’t going away anytime soon. And if telephony is important to your business, the right solution might very well be a combination of a Lync client and Avaya.