CISCO VS. MICROSOFT STRATEGIC DECISIONS - BRENT KELLY, PRINCIPAL ANALYST KELCOR, INC.
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Cisco Vs. Microsoft Strategic Decisions Brent Kelly, Principal Analyst KelCor, Inc. bkelly@kelcor.com 435-563-2532 © KelCor, Inc. 2014 1
Agenda 1 Introduction‐Product Comparison 2 Licensing and TCO 3 Roadmap/Future Considerations 4 Decision Making Aids © KelCor, Inc. 2014 2
About The Presenter… Dr. E. Brent Dr. Brent Kelly is Principal Analyst at KelCor, Inc. where he focuses on the intersection of unified communications, social media, video, cloud services and mobility. Dr. Kelly Kelly provides strategy and counsel to Chief Information Officers, Chief Technology Officers, investment analysts, VCs, technology policy executives, sell side firms and technology buyers. Previously, Dr. Kelly served for two years as Vice President and Principal Analyst at Constellation Research, Inc., and for ten years as a partner at Wainhouse Research where he was the primary author of most of the firm’s unified communications reports and forecasts. Brent has a Ph.D. in engineering and serves as an elected official in his community. 3
The Market Reality Cisco Data Network Microsoft Lync 75% IM/Presence 60% Cisco Voice Network 25% - 35% Sources: Nemertes, Infonetics, MZA, PKE Estimates © KelCor, Inc. 2014 4
The Challenge Cisco Microsoft ~21% have both Cisco voice and Microsoft Lync Sources: Nemertes, Infonetics, MZA, PKE Estimates © KelCor, Inc. 2014 5
The Challenge Cisco ~45% Microsoft of Cisco data Deployments could be considering Microsoft Lync for voice This is why the Cisco vs Microsoft debate has become so important! Sources: Nemertes, Infonetics, MZA, PKE Estimates © KelCor, Inc. 2014 6
End User Organizations Switching Toward a Particular Communications Provider Avaya, 12.9% Cisco, 22.6% Unsure/Evaluating, Microsoft, 12.9% 32.3% Mitel, 3.2% Unity (Siemens), 3.2% Other/Multiple, 6.5% Cloud/Hosted, 3.2% ShoreTel, 3.2% Source: Nemertes Research at Enterprise Connect 2014 © KelCor, Inc. 2014 8
Why Choosing is Difficult • In many organizations both vendors are strategic – Cisco Jabber for all (requires only one telephony license) – Microsoft Lync for all (often comes bundled in an Enterprise Agreement) • Political – Intelligent, articulate proponents for both solutions – Sometimes difficult to differentiate between them – Someone will likely feel disenfranchised • Approaches differ – Cisco: from the data and PBX world – Microsoft: from the enterprise software and collaboration world – Both offer a “vision” for the future – Both approaches are valid and often resonate © KelCor, Inc. 2014 9
The Interface is Changing To Click-to-Call Click-to-Conference Multi-Modal © KelCor, Inc. 2014 11
Pre-Convergence Personal Business Productivity Applications Applications and Processes Voice Apps Data TDM Infrastructure © KelCor, Inc. 2014 12
Architectural Choice – Cisco Same vendor for voice and data Personal Business Productivity Applications Applications and Processes Voice Apps Data Communications Infrastructure Platform © KelCor, Inc. 2014 13
Architectural Choice – Microsoft Microsoft for Productivity and Coms; Any Data Vendor Personal Business Productivity Applications Applications and Processes Voice Apps Communications Platform Data Infrastructure © KelCor, Inc. 2014 14
Architectures are Different Personal Business Personal Business Productivity Applications Productivity Applications Applications and Processes Applications and Processes Voice Apps Communications Platform Voice Apps Data Communications Infrastructure Platform Data Infrastructure What do you converge: Comms and network or Comms and Personal Productivity Apps? © KelCor, Inc. 2014 15
Short Diversion for a Personal Opinion Many innovations in the communication space over the next 10 years will integrate personal productivity, mobility, and multi-modal engagement with business applications. Personal Business Productivity Applications Applications and Processes Best in Show Example © KelCor, Inc. 2014 16
Comparing Portfolio Capabilities Basic Telephony Services Desktop Phones PC Clients Mobile Clients Audio Conferencing Contact Center IM/Presence Web Conferencing Federation Services Outlook Integration Peer-to-Peer Video Multipoint Video Room System Integration With Partner Eco-System Source: PKE Consulting © KelCor, Inc. 2014 17
A Closer Look: Giving the Nod Microsoft Lync Cisco UC/Jabber • Telephony Capabilities – Basic Features – Advanced Telephony Features • Audio/Web Conferencing • Video Portfolio • Single Vendor versus Eco-System • Desktop Applications Integration – Exchange/Outlook – Office Apps – SharePoint • Federation • Line of Business App Integration • Contact Center Source: Adapted from PKE Consulting © KelCor, Inc. 2014 18
The Partner Ecosystem – Disadvantage or Advantage? Item UC Software Microsoft Cisco Servers Partner Cisco SBCs Partner Cisco Phones Partner Cisco Video Units Partner Cisco Contact Center Partner Cisco Cloud Microsoft* Partner Installation Partner Partner Operations Other Other Note: Even if Microsoft is chosen, it may be through a VAR; thus you may still have a single vendor doing the integration. © KelCor, Inc. 2014 19
Where Does the Money Go? Contact Center and Video Were Added in this On-Premises Example Microsoft Cisco To Vendor* 8.4% 39.9% To Partners Only 17.8% 4.4% To Others 73.8% 55.8% Big opportunity for hosted/managed services © KelCor, Inc. 2014 20
Four Strategic Options All Cisco Both Elemental Both in Parallel All Microsoft • One Vendor • Cisco for PBX • Location or • Single Vendor • Full PBX • Microsoft for IM departmental (sort of) • Guaranteed & presence • Support full UC • Eliminate PBX (if • Integration • Little integration stack for both possible) © KelCor, Inc. 2014 21
If Lync Gets in the Door… It is kind of insidious! Lync for IM and Presence Lync Peer to Peer Audio and Video Web/Audio Conferencing through Add an SBC and Voice Trunks Lync Lync Mobile Clients Lync Federation Lync Enterprise Voice © KelCor, Inc. 2014 22
The Licensing Conversation Cisco © KelCor, Inc. 2014 23
Microsoft Lync 2013 Different License Types • Lync Server Licenses – Front End Server role – Plus each Survivable Branch Appliance • Client Access Licenses (CALs) Lync • User Subscription Licenses (USLs) Licenses – Office 365 and Lync Online • Client License • Windows Server Licenses Don’t Forget • SQL Server Licenses These Other • Exchange Server Licenses Licenses © KelCor, Inc. 2014 24
Lync CALs Adds Conferencing and Enterprise Voice Adds Adds Conferencing Enterprise Voice Plus CAL Enterprise CAL Plus CAL Enterprise CAL Standard CAL (IM/Presence) • The Lync 2013 Client license is often included with other products (Office Professional Plus, Office 365). • Lync Mobile clients are free © KelCor, Inc. 2014 25
Lync CALs (Per User) Plus CAL - $123 Enterprise CAL - $123 Standard CAL - $36 List Price for Full Stack = $282 © KelCor, Inc. 2014 26
Lync Server CALs • 40+ Pages of Licensing Guide • Core CAL Suite (CCAL) • Enterprise CAL (ECAL) • Enterprise Agreement Subscription (EAS) © KelCor, Inc. 2014 27
Cisco Licensing Cisco + + + + Personal Multiparty WebEx + + + + Conferencing + + + Unity Connection N/A N/A Expressway N/A N/A Jabber UC CPE & CPE & Jabber IM/P Hosted Hosted Prime Collaboration # of Devices One One One/Two Multiple Multiple Supported UCL UCL UCL Enhanced/ CUWL CUWL Essential Basic Enhanced Standard Professional (Analog) Plus $210/ List Price $40 $125 $325 $500 $295 © KelCor, Inc. 2014 28
Cisco CUWL Pro (Per User) Cisco List Price for Full Stack = $500 © KelCor, Inc. 2014 29
Cisco Enterprise Agreement Cisco • Software and service rights for entire organization in a single multi-year agreement • Requires at least 2,000 knowledge workers • Includes software, upgrade subscriptions (UCSS) and technical support (ESW) • Considers previous investments in Cisco collaboration and support products • Fixed cost for length of contract • Unlimited organic growth and up to 20% of inorganic growth before true-up © KelCor, Inc. 2014 30
Cisco Enterprise Agreement Offers Cisco © KelCor, Inc. 2014 31
Unified or Universal Communications? Vendor licensing forces us to think in terms of point solutions Video: Lync Enterprise UCL Enhanced Conferencing: Voice: CUWL Standard UCL Basic/Enhanced CUWL Pro Lync Plus Lync Enterprise © KelCor, Inc. 2014 32
Modeling TCO © KelCor, Inc. 2014 33
A User Profile Should Drive Any Solution Workload/Capability Profile Type: Manufacturing Executive Highly Mobile Collaborative Worker Support Worker Task Worker Percent by Category 3% 20% 30% 17% 30% IM/Presence 100% 100% 100% 100% 100% Federation 100% 100% 100% 100% 0% Deskphone 100% 15% 50% 70% 15% Softphone 100% 100% 100% 50% 30% Executive Video Unit 50% 0% 0% 0% 0% Mobile Smartphone Client 100% 100% 100% 50% 30% Mobile Tablet Client 100% 100% 100% 50% 30% Conferencing Hosts 50% 100% 100% 10% 10% Multi‐Line, Multi‐Line, Multi‐Line, 2‐Line Phone Type Speaker, Touch Speaker Speaker or Multi‐Line Single‐Line Busy Hour Conferencing 50% 20% 20% 2% 1% © KelCor, Inc. 2014 34
A Look at the Licenses Required – 5000 Users Public Highly Collab. Support Task Attendant Space Analog Video Executive Mobile Worker Worker Worker Consoles Phones Lines Rooms Lync Standard CAL 150 1000 1500 850 1500 25 200 200 13 Lync Enterprise CAL 75 1000 1500 85 150 25 13 Lync Plus CAL 150 1000 1500 850 675 25 200 200 UCL‐Essential 200 UCL‐Basic 200 UCL‐Enhanced 0 0 0 344 995 13 CUWL‐Standard 75 0 0 421 355 CUWL‐Professional 75 1000 1500 85 150 25 User Licenses and CALs Total Microsoft Lync Standard CAL 5438 Lync Enterprise CAL 2848 Lync Plus CAL 4600 Note that there Cisco UCL‐Essential 200 are more than UCL‐Basic 200 5000 licenses UCL‐Enhanced 1352 CUWL‐Standard 851 required CUWL‐Professional 2835 © KelCor, Inc. 2014 35
TCO One time costs Components Total server software Total software CALs/Licenses CALs Total hardware Total contact center Total videoconferencing hardware Total implementation costs Grand total one time costs 5-year total of annual support costs Server software maintenance / support Total CAL CAL/License maintenance maintenance / support / support Total hardware support Total videoconferencing maintenance / support Total contact center annual support Grand total support costs Subtotal before support operating costs costs Operating costs Total rack space costs Total personnel costs Essential for Comparison of Total power costs Premises vs. Total annual bandwidth cost Hosted! Total SIP trunking cost Total operating costs © KelCor, Inc. 2014 36
Case: 5,000 users. No Group Video. No Contact Center. EA Licensing Where The Money Goes One Time Costs Microsoft Percent One Time Costs Cisco Percent Total Server Software $ 109,595 0.9% Total Server Software $ ‐ 0.0% Total Software CALs $ 1,558,526 12.9% Total CUCM Software Licenses $ 895,822 8.0% Total Hardware $ 511,579 4.2% Total CUBE SBC Licenses $ 20,687 0.2% Total Contact Center $ ‐ 0.0% Total Unity Connections Licenses $ 44,348 0.4% Total Video Conferencing Hardware $ ‐ 0.0% Total Hardware $ 888,362 8.0% Total Implementation Costs $ 326,955 2.7% Total Contact Center Express $ ‐ 0.0% Grand Total One Time Costs $ 2,506,654 20.8% Total Video Conferencing Hardware $ ‐ 0.0% 5‐Year Support and Maintenance Costs Total Implementation Costs $ 369,844 3.3% Annual Server Software Maintenance $ ‐ 0.0% Total One Time Costs $ 2,219,061 19.9% Total Annual Software CALs Maintenance $ ‐ 0.0% Support and Maintenance Costs Annual Server Software Support $ 147,648 1.2% Annual Server Software Maintenance $ ‐ 0.0% Total Annual Software CALs Support $ 2,099,680 17.4% Total CUCM Software License Maintenance $ 665,289 6.0% Total Hardware Support $ 109,957 0.9% Total CUCM Software License Support $ 520,033 4.7% Total VideoConferencing Support/Maintenance $ ‐ 0.0% Total Contact Center Annual Support $ ‐ 0.0% Total Hardware Support $ 25,098 0.2% Grand Total Support and Maintenance Costs $ 2,357,286 19.5% Total Contact Center Annual Support $ ‐ 0.0% Operating Costs Total Unity Connections Support and Maintenance $ 88,248 0.8% Total Rack Space Costs $ 28,125 0.2% Total VideoConferencing Support/Maintenance $ ‐ 0.0% Total Personnel Costs $ 6,600,000 54.7% Total Support and Maintenance Costs $ 1,298,667 11.7% Total Power Costs $ 21,771 0.2% Operating Costs Total Annual Bandwidth Cost $ 164,707 1.4% Total Rack Spack $ 30,000 0.3% Total SIP Trunking Cost $ 388,125 3.2% Total Personnel Costs $ 6,912,500 62.0% Grand Total Operating Costs $ 7,202,728 59.7% Total Power $ 37,630 0.3% Grand Total $ 12,066,668 100% Total Annual Bandwidth Cost $ 190,045 1.7% Total SIP Trunking Cost $ 458,831 4.1% Total Operating Costs $ 7,629,007 68.4% © KelCor, Inc. 2014 Total $ 11,146,735 100.0% 37
License Type Matters Case: Contact Center: No; Room Video: No; On-Premises Microsoft EA/SA vs EAS Licensing EAS = Enterprise Agreement Subscription • Monthly or annual cost • You don’t own the software license Microsoft Enterprise Agreement with Maintenance Microsoft Enterprise Agreement Subscription (EA/SA Licensing) (EAS Licensing) Microsoft total: EAS gives Microsoft total: 23% $12,066,668 Discount $9,272,159 © KelCor, Inc. 2014 38
What About Conferencing Only? Cloud solutions are universally less expensive for conferencing only workloads Microsoft Cisco On-Prem On-Prem Microsoft WebEx O365 Cloud Note: box heights do not represent cost comparison between the vendors; only comparison between same vendor solutions. © KelCor, Inc. 2014 39
Roadmap and Futures 1 What current Cisco UC users can expect 2 What current Microsoft UC users can expect 3 Suggestions for those who are undecided © KelCor, Inc. 2014 40
Both Cisco and Microsoft Seek Differentiated Value Over Time ) conferencing conferencing conferencing center services effects © KelCor, Inc. 2014 41
Cisco © KelCor, Inc. 2014 42
Cisco: The Formal Position – 1 Continued emphasis on video. New MX and SX series. First to market with H.265 video! • Making video easy – Back to the future: video should be as easy as a phone call – Mobile device proximity coupled with mobile app to launch video © KelCor, Inc. 2014 43
Cisco: The Formal Position – 2 • Turnkey small and mid market call control • Supports video • Some apps included (VM/IM/P) • 25 CWUL Pro licenses comp’ed • Making voice easy – Quicker rollout – All virtual images included © KelCor, Inc. 2014 44
Cisco: The Formal Position – 3 • Making cloud (a la HCS) more compelling • Multitenant voice messaging • Multitenant contact center • Service providers can target SMB market (50 – 100 • Most V10 functionality will be users) available to service providers • VPN not required at the end of Q1 2014 for remote workers – Provider must then roll it out © KelCor, Inc. 2014 45
Cisco: My Take – 1 From a September 2006 Cisco briefing Companies and markets evolve, and Cisco is striving to meet demand for video at all levels © KelCor, Inc. 2014 46
No Surprises Cisco: My Take – 2 Cisco HCS (cloud) results have been mixed • Roughly 800,000 seats in use and 1.3 million sold to service providers (over capacity of 65%) HCS has been expensive in our RFPs • Both in 2012 and 2013 Move to lower operator costs is good if it translates to lower end user costs • Lower hardware costs (some multitenancy) • Simplifying on-boarding and continued operations • Could make HCS more competitive with other offerings in the SMB market © KelCor, Inc. 2014 47
Microsoft © KelCor, Inc. 2014 48
Microsoft: The Formal Position – 1 Windows Android Apple Apple Windows Phone Tablet iPad iPhone 8.1 PC All devices are running Lync Similar Lync or Skype Experience across devices © KelCor, Inc. 2014 49
Microsoft: The Formal Position – 2 SIP 1 Video bridge w/legacy systems H.264 2 Lync Room Systems 3 Video between Lync & Skype Crestron Smart © KelCor, Inc. 2014 50
Microsoft: The Formal Position – 3 1 PSTN calling from Lync Online 2 Larger Lync Online Meetings 3 JLync – Java wrapper for Lync API © KelCor, Inc. 2014 51
Microsoft: The Formal Position - 4 Others have tried to provide context… and failed Why Microsoft might succeed.. My guess is that context aware search will be built into the search mechanism that comes as part of the operating system © KelCor, Inc. 2014 52
Microsoft: My Take – 1 Microsoft is gaining some momentum in voice • Reminds me of where Cisco was 10 years ago Adding voice to Office 365/Lync Online is great for the SMB market • Had a false start a few years ago, but it would be welcome to the O365 user Integrating legacy video investments is a good move for Microsoft • The could have been done by partners (i.e. Polycom), but it is not hard for Lync Server to be the video bridge either © KelCor, Inc. 2014 53
Microsoft: My Take - 2 The Lync-Skype Video Integration • This is a good move • I hate the fact that you must get a new Microsoft user identity (kind of kills the “universal communications” paradigm B2C w/Skype (businesses pay the PSTN toll) • May help enable more immediate rich interaction for SMBs Too much focus on consumer solutions may dilute momentum • I really want to see my mom and kiddos on video all the time; I really *don’t* want to see my business associates on video all the time © KelCor, Inc. 2014 54
For the Undecided… Some Strategic Approaches Do you ever feel like both solutions are good but missing just a little something? © KelCor, Inc. 2014 55
Elimination Strategies © KelCor, Inc. 2014 56
No Matter Which Solution You are Looking At… Profile your users Workload/Capability Profile Type: Manufacturing Executive Highly Mobile Collaborative Worker Support Worker Task Worker Percent by Category 3% 20% 30% 17% 30% IM/Presence 100% 100% 100% 100% 100% Federation 100% 100% 100% 100% 0% Deskphone 100% 15% 50% 70% 15% Softphone 100% 100% 100% 50% 30% Executive Video Unit 50% 0% 0% 0% 0% Mobile Smartphone Client 100% 100% 100% 50% 30% Mobile Tablet Client 100% 100% 100% 50% 30% Conferencing Hosts 50% 100% 100% 10% 10% Multi‐Line, Multi‐Line, Multi‐Line, 2‐Line Phone Type Speaker, Touch Speaker Speaker or Multi‐Line Single‐Line Busy Hour Conferencing 50% 20% 20% 2% 1% © KelCor, Inc. 2014 57
No Matter Which Solution You are Looking At… Look for unique requirements or situations Special group functions? Advanced Trunking or dial plan functions? Unique assistant functions? These may point you toward the vendor you need to pursue. © KelCor, Inc. 2014 58
No Matter Which Solution You are Looking At… Determine if you have “The 70% Solution” Your organization may “require” multiple communications vendors to meet its needs! © KelCor, Inc. 2014 59
No Matter Which Solution You are Looking At… Consider your expertise Are you more of a Cisco shop that a Microsoft shop or vice versa? Don’t forget that OPERATIONS will likely be half of your TCO over time. If you have significant expertise with one or the other vendor, you may save time and money pursuing that vendor. © KelCor, Inc. 2014 60
Investigate TCO By Looking at Alternatives TCO is only part of the picture, but it is important Do some modeling or get someone else to do it A close look at TCO may move a director or manager toward compromise. © KelCor, Inc. 2014 61
Evaluate Vendors Using a Weighting Process Define Weigh Compare Crunch Outcome Criteria Criteria Vendors Data 25% 5% 14% e57 g ra 56 e Jabber ‐ Lync Comparison by Non‐Outlook/Exchange or Outlook/Exchange and Worker Type ‐ Zoom View v 55 A yt 54 ili 10% ab53 Jabber ap52 C Lync ve it 51 la 50 e R 49 Non‐Exchange Non‐Exchange Exchange ‐ Exchange ‐ ‐ K nowledge ‐ Information Knowledge Information Worker Worker Worker Worker 4% Email (Including Desktop Client) TCO 100 Active Directory 90 80 Customers and Public SharePoint 70 60 50 Close Held Partners 40 Business Applications 30 20 10 25% Inter‐Business 0 Desktop Productivity Apps Windows 8 Smart Phones Video Conferencing Open Smart Phones Telephony Window s 8 Tablets/Slates PC Desktops Open Tablets 6% Jabber Lync 11% Source: PKE Consulting © KelCor, Inc. 2014 62
Building Block Approach User Profiles are an input to TCO modeling. TCO modeling is an input to a weighted decision analysis tool. © KelCor, Inc. 2014 63
A Quantitative Example © KelCor, Inc. 2014 64
Model Output Scenario 1 Scenario 2 Email (Including Desktop Client) 100 TCO Active Directory 90 80 Customers and Public SharePoint 70 60 50 Close Held Partners 40 Business Applications 30 20 10 Inter‐Business 0 Desktop Productivity Apps Windows 8 Smart Phones Video Conferencing Other Smart Phones Telephony Windows 8 Tablets/Slates PC Desktops Other Tablets Knowledge Worker ‐ Jabber Knowledge Worker ‐Lync Information Worker ‐ Jabber Information Worker ‐Lync © KelCor, Inc. 2014 65
To get a *free* copy of the weighted decision analysis model, send an email to Phil Edholm at pedholm@pkeconsulting.com © KelCor, Inc. 2014 66
Coexistence Strategies 1 Deploy equally and maintain both You will do this “intentionally”, knowing that this is likely the most expensive option. Management does this knowing that the benefits outweigh the costs! © KelCor, Inc. 2014 67
Coexistence Strategies 1 Deploy equally and maintain both Inbound call Session Border Controller with Active Directory Lookup You could also do SIP trunking between them © KelCor, Inc. 2014 68
Coexistence Strategies 2 “Mostly eliminate one” For your “core” UC capabilities across broad job profiles, standardize on a single communications and collaboration solution. Only those with “special requirements” have the other system.” This will lower some costs; costs for the special requirements solution will likely be quite high. © KelCor, Inc. 2014 69
Coexistence Strategies 3 Run one in‐house & one hosted Own the “main” UC solution and operate it yourself. For the special requirements solution move it to a hosted solution from a reputable service provider. © KelCor, Inc. 2014 70
Coexistence Strategies 3 Run one in‐house & one hosted Enterprise Voice ~70 providers © KelCor, Inc. 2014 71
Sometimes choosing between Cisco and Microsoft is like herding cats… But it can be done! Video Source: HP/EDS 2009 https://www.youtube.com/watch?v=P k7yqlTMvp8 © KelCor, Inc. 2014 72
Thank you Brent Kelly +1.435.563.2532 bkelly@kelcor.com Twitter: @ebkell http://uccinsider.blogspot.com www.KelCor.com © KelCor, Inc. 2014 73
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