Vol. 3: Convergence Business Case

Table of Contents

1 EXECUTIVE SUMMARY 5
2 BUSINESS CASE 6
2.1 WHAT’S DRIVING BUSINESS DECISIONS? 6
2.2 OPERATIONAL OVERVIEW 8
2.2.1 Planning, Installation, Troubleshooting Time on the Rise 9
2.2.2 Time is Money: Vendor-Specific Expectations 11
2.2.3 Penetration: VOIP Handsets by Vendor 14
2.2.4 Down to the Dollars 16
2.3 CAPITAL COSTS 20
2.3.1 Switches & Phones Only 20
2.3.2 All Capital Investment 21
2.4 ADDITIONAL FINANCIAL ANALYSIS 23
2.4.1 Management Tools 23
2.4.2 Training 24
2.4.3 Staffing 26
2.4.4 MAC Analysis 29
2.4.5 Conferencing 30
2.5 OTHER COST SAVINGS 31
3 CUSTOMIZED FINDINGS 33
4 APPENDIX A: REPORT METHODOLOGY 34
4.1 PROCESS 34
4.2 TIMEFRAME 36
4.3 PARTICIPANTS 36
4.4 BY INDUSTRY 37
4.5 BY SIZE 38
4.6 DISCLAIMER/DISTRIBUTION 39
5 APPENDIX B: PEER PROFILE BENCHMARK DESCRIPTIONS 40

Table of Figures

FIGURE 1: BUSINESS DRIVERS 8
FIGURE 2: AVERAGE VOIP HANDSETS PER ORGANIZATION 13
FIGURE 3: PERCENTAGE OF USERS W/VOIP HANDSETS 14
FIGURE 4: VOIP HANDSET PENETRATION, BY SIZE OF ROLLOUT 15
FIGURE 5: OPERATIONAL COSTS, BY VENDOR 16
FIGURE 6: IP SWITCH/PHONE COST PER USER 19
FIGURE 7: ALL CAPITAL COSTS PER USER, BY VENDOR 22
FIGURE 8: INTERNAL ANNUAL MAINTENANCE COSTS PER USER 27
FIGURE 9: OVERALL ANNUAL MAINTENANCE COSTS 28
FIGURE 10: PARTICIPANTS BY TITLE 35
FIGURE 11: PARTICIPANTS BY INDUSTRY 36
FIGURE 12: ANNUAL REVENUE 37
FIGURE 13: IT BUDGET 38

Table of Tables

TABLE 1: OPERATIONAL STARTUP TIME 9
TABLE 2: MINUTES OPEX STARTUP PER USER 11
TABLE 3: STARTUP TIME, BY VENDOR 11
TABLE 4: DETAILED OPERATIONAL COSTS PER USER 17
TABLE 5: TOTAL OPERATIONAL/CAPITAL COSTS/IP PHONE/SWITCH ONLY 21
TABLE 6: TOTAL CAPITAL/OPERATIONAL COSTS PER USER, ALL CAPITAL 23
TABLE 7: BREAK-OUT OF AVERAGE CAPITAL COSTS 23
TABLE 8: MANAGEMENT BUDGET RECOMMENDATIONS 24
TABLE 9: RECOMMENDED TRAINING BUDGET 25
TABLE 10: ANNUAL PERSONNEL SAVINGS 26
TABLE 11: MAC ANALYSIS 29
TABLE 12: VIDEOCONFERENCING COSTS 30
TABLE 13: AUDIOCONFERENCING COSTS 31

1 Executive Summary

Convergence projects are running strong in the vast majority of organizations. Voice typically is the first application implemented on a converged IP backbone, and Nemertes is starting to see IT executives explore new applications, such as video, unified communications, collaborative tools and real-time communications dashboards. They’re also recognizing the need for network optimization, branch-office technologies, enhanced management tools, and detailed cost analyses. And finally, they’re waiting not-so-patiently for the carriers to catch up with market demands.

Volume 3 of the “Convergence & Next-Generation WAN Technologies” benchmark explores the business case for convergence, and specifically, internal IP telephony and voice-over-IP rollouts. You will learn how much organizations are spending on operational and capital start-up costs, as well as ongoing management/maintenance. This volume also provides break-downs of costs by vendor and by organizational size. And, you’ll see how organizations are saving money with converged infrastructures.

Volume 4 of this benchmark will provide a market assessment of the convergence market, with specific product/service matrices to help IT executives evaluate the offerings available. Additional volumes will explore converged applications, branch-office trends, management challenges, mobility plans, and WAN service/technology trends. We also analyze organizational best practices based on Nemertes’ Peer Profile Benchmarks, a multi-faceted method of categorizing companies based on a variety of characteristics.

Please contact Client Services if you would like to schedule a briefing..