Understanding Total Cost of Ownership in UC


In recent years, capital and operational expenses for IP telephone costs have dropped measurably. This decline is due to an increase in cost-effective options like ShoreTel provides, as well as market competition and shorter learning curves.

What is TCO?

TCO is an acronym that stands for the Total Cost Of Ownership including any financing that might be necessary for the implementation of a new system.

Why TCO Matters

TCO is an estimation of the expenses associated with purchasing, deploying, using and retiring a product or piece of equipment like ShoreTel Sky. It's important because this information is used to calculate the total cost of purchasing, changing, maintaining, or expanding infrastructure. Additionally, there's the cost of training, downtime, and support.

Determining TCO and ROI for United Communications (UC)

The team or executive who is charged with the task of evaluation and assessment of actual UC costs over a period of years should carefully study the components of ongoing operational costs before basing vendor decisions upon existing figures. TCO isn't a fixed figure since it's determined over the life of the investment.

It’s only until quite recently that enterprise collaboration vendors were distinct from vendors for enterprise communications. The first group was dominated by software giants like Microsoft and IBM while telephony and networking vendors controlled the latter. As things evolved in the industry, the distinction between the two groups has changed. 

The Cloud Is An Investment That Can Provide Savings

There are many IT leaders who are of the opinion that their firms will achieve immediate savings by moving to a cloud-based system like ShoreTel provides. The reality is that for small organizations, that immediate savings is typically the case. On the flip side, when it comes to midsize and large firms, moving to the cloud will, unfortunately, increase costs for the first two years and for the future.

There's no question that IP telephone systems and UC environments are rapidly changing. Frankly, that's to be expected. Additionally, organizations are increasingly moving to, or at least, evaluating the cloud for some or all of their locations. As a result, we anticipate a long period of seeing mixed and hybrid environments with various combinations of on-premises and cloud deployments mixed in with lingering TDM telephone.

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Author: Matrix Networks Sales Team