We are frequently asked to illustrate likely total costs of ownership for prospective clients.

Before we go into this in detail, bear in mind that if a communication solution is specified professionally (as ours are!) then you should be looking at a life deployment cycle of between 5 and 8 years.

We achieve the above by thorough drilling down of the customers requirements, applications (present and future) coupled with what the market’s expectations are going to be requiring of the solution as a whole. For example, the expandability/addition of new sites and the need to retain some dynamic facilities such as additional contact centre applications.

This model is not relevant if you are forced into a hosted voice-only solution for reasons of inability to acquire funding for customer premise equipment or are looking to deploy a temporary or start up office solution/additional temporary sites - because hosted always wins on TOC over a 24 month or less period, so that’s the one to go for.

Generally there only 2 ways to go with a comms solution – acquire it or hire it, now you can hire by hosting the solution (Centrex) or lease/rent customer premises equipment (CPE).

For example if we take a typical SMB solution of say running 20 ISDN lines & serving 50 users across a single or multiple site giving reasonable application such as –

FMC – Fixed mobile convergence

DDI - Direct Dial in

VMS - voice mail to email

DT - desktop soft phone telephony

SBC - screen based operator console

IPG – IP Gateways

The above constitutes a typical application in design and the below estimates the cost of the equipment be it server based or “blade” based.

This is how we would calculate the TOC over a 6 year period

1) CPE example (acquire it)
Requires IP PBX with ISDN 30 card, voice manager/IVR 1 x screen ops console and 50 IP handsets with TDM backup.

Target costs to acquire estimated at £18K
One off cost £18K

Network costs recurring
20 x ISDN line @ £12 per month (£2880 P/A) x 6 years = £17,280

Annual maintenance costs recurring @ £800 per year x 6 years = £4800

TOC over 6 years therefore = £40,080 (unless you are adding in extra users, etc)

2) Hired example (hosted/Centrex)

Based on an identical specification (20 trunks /channels speech capacity 50 x IP handsets, voice mail and ops console)

One off costs
Decent POE switches @ £1500
Decent router @ £600
50 x IP handsets @ £150 each=£7500
Licence set ups for operator and voice mail IVR @ £500
Leased line or SDSL setup (as broadband wont be up to the job of QOS) £3000 one off costs
Total one off costs £13,100

Recurring costs based on industry average of £11 per user per month= £550 per month =£6600 P/A
Total recurring over the 6 years = £39,600
Leased line or SDSL rental @ £2300 P/A x 6 =£13,800

TOC of hosted solution = £66,500

Other charges are of course call charges – these should never exceed 1.5p per min on an owned solution and likewise on a hosted solution.

So to sum up, if you intend to retain the solution for a few years then the calculator comes out in favour of “acquire it” as opposed to “hire it” .

If your deployment is to be shorter term (1-2 years) only then you can see the financial advantage that the hosted voice offers, as you could sign up for 24 months only and then literally turn it off and reuse the expensive handsets you boght as part of an IP PBX (make sure the handsets you buy are SIP/IP complaint or you will have to literally throw them away after 2 years!).

So the Golden Rule is - don’t commit to a solution until you have considered how long it is before you are likely to have to replace it with another. If it’s a short term need then its easy to decide, if longer term then make sure you factor in all the elements both one off and recurring to establish your TOC.

Or hopefully ask our team to check it and spec it for you!

“If you think it’s expensive to hire a Professional
– wait till you’ve hired an Amateur!”