ShoreTel TCO Tool - Adtech Global

SOLUTION BRIEFThe ShoreTel TCO ToolAn important guide to assessing the business and financial impactof unified communications systemsLegacy time-division multiplexing (TDM) and hybrid IP telephony solutionshave come under increased scrutiny in recent years as their maintenancecosts rise, and they increasingly fail to deliver the productivity benefits ofmodern IP-based unified communications (UC) solutions. Now, there is anintensifying level of focus on these existing costs, and a renewed urgencyand attention on applying technology to drive out these inefficiencies.Benefits• Provides an objectivemeasure of the totalbusiness impact of the UCpurchase decision• Captures the organizationalimpact of UC productand system managementcomplexity• Improves financial planningand accountability• Improves organizationaldecision making, efficiencyand alignment• Offers powerful insight,regardless of deploymentsize• Maximizes cash flow andlong-term shareholdervalueTotal cost of ownership (TCO) has become an important metric for assessingand tracking the risks, costs and benefits of UC solutions under evaluation.So to help prospective customers understand the business and financialimpact of UC systems, ShoreTel has developed the ShoreTel TCO Tool. Byanalyzing TCO, organizations can compare competing solutions on an equalfooting —like for like—and align those solutions with business needs, whileunderstanding the effects of future requirements and functionalities.Insight into unanticipated costsTCO calculations include costs that maynot turn up in initial budgets or initialstatements of work, but may still havea significant impact on future businessoperations—for example, recurring laborcosts. As a result, systems with the lowestpurchase price ultimately may not have thelowest TCO.The TCO tool draws on third-party data andfull competitive coverage to compute UCsystem costs based on each organization’sspecific configuration requirements.This includes annual recurring costs such ashardware replacement, training, support,software upgrades, moves adds and changes,system management, energy consumption,network and long distance charges, as wellas up-front capital and implementation costs.UC vendor solutions vary greatlyaccording to their product and systemmanagement complexity. The TCO toolensures that the impact of this complexityon implementation, maintenance,reliability, system management and powerconsumption is fully captured and valued.Once the tool has been configured for aspecific customer’s circumstances, it enablesa customer to calculate and comparethe TCO of alternative UC systems overmultiple years—information that is key tounderstanding the costs, risks and benefitsassociated with a UC system purchase.Proven TCO advantageShoreTel has a deep, competitive andsustainable TCO advantage, and hasbeen able to consistently demonstrate aTCO between 50 percent and 75 percentlower—including an energy footprint upto 62 percent less—than competingvendor solutions.

10-year analysis based on1,500 users across 3 sites2520$19.17$19.60$26.37Long distance chargesNetwork costs$M15$14.20$15.01Electricity consumptionSystem management, MACs, downtimeSupport services10$6.72Implementation and training5Capital cost for network upgradeCapital cost for telephony systemSource Data: Ferris Research, Inc.,Wainhouse Research, Nemertes Research,Alinean Research, The Tolly Group0ShoreTelMitelAvaya MicrosoftFigure 1: TCO comparison of major UC system vendors (pre-tax)CiscoTDMFor more information on howto use the ShoreTel TCO Tool,contact your ShoreTel salesrepresentative or certifiedShoreTel Partner. To receivea copy of the ShoreTelwhite paper, “Assessing theBusiness and Financial Impactof IP Unified CommunicationsSystems,” visit www.shoretel.com/resources/whitepapers.As an example, the result of a 10-year TCOanalysis for a large enterprise configuration(1,500 users across three sites) is shown inFigure 1. Based on cash flow projectionsfor each solution, the TCO tool assesseskey financial ratios such as payback period,return on investment (ROI), internal rateof return (IRR) and net present value(NPV), important for assessing the longterm financial merits of each UC solution.(See Figure 2)This fundamental advantage is driven byShoreTel’s unique single-image, distributedsoftware and embedded switch-basedcall routing architecture, which results instructurally lower product capital cost,network upgrade cost, implementation andtraining cost, maintenance, MAC, systemmanagement, long distance charges andUC Financial RatiosTCO advantage (post-tax)TDM74.27%Cisco65.50%energy consumption.ShoreTel’s comprehensive TCOassessment also provides valuable insightinto the long-term financial viability ofeach UC vendor. Unnecessarily complexecosystems lead to higher TCO, lowerlevels of customer satisfaction, and resultin lower margins throughout the valuechain. In recent times, such complexity hasled to and exposed critical weakness inthe financial sustainability and viability ofcertain “older technology” UC vendors.When it comes to reducing costs on ahighly reliable and scalable platformthat has been architected for businessgrowth, many organizations are findingthat they simply can’t afford not tochoose ShoreTel.Microsoft64.74%Avaya55.01%Mitel52.45%ShoreTelPayback period (months)46 months39 months28 months23 months 16 monthsReturn on investment (ROI) (%)27.7%31.3%42.5%53.6% 74%Internal rate of return (IRR) (%)21.4%27.6%41%53.1% 75.3%Net present value (NPV) ($M)$4.591M$4.873M$7.693M$8.252M$13.378MFigure 2: Financial ratio comparison by vendorAbout ShoreTelShoreTel is the provider of brilliantly simple Unified Communication (UC) solutions based on itsaward-winning IP business phone system. We offer organizations of all sizes integrated, voice,video, data, and mobile communications on an open, distributed IP architecture that helpssignificantly reduce the complexity and costs typically associated with other solutions. Thefeature-rich ShoreTel UC system offers the lowest total cost of ownership (TCO) and the highestcustomer satisfaction in the industry, in part because it is easy to deploy, manage, scale anduse. Increasingly, companies around the world are finding a competitive edge by replacingbusiness-as-usual with new thinking, and choosing ShoreTel to handle their integrated businesscommunication. ShoreTel is based in Sunnyvale, California, and has regional offices and partnersworldwide. For more information, visit shoretel.com.World HEADQUArters 960 Stewart Drive, Sunnyvale, CA 94085 USA. shoretel.comemeAAsiA PAcific+1 (800) 425-9385 Toll Free +1 (408) 331-3300 Tel. +1 (408) 331-3333 Fax+800 408 33133 Freephone +44 (1628) 826300 Tel.+61 (0)2 9959 8000 Tel.Copyright © 2011 ShoreTel. All rights reserved. The ShoreTel logo and ShoreTel are registered trademarks of ShoreTel, Inc. in the United States and/or other countries. All other copyrights and trademarks hereinare the property of their respective owners. Specifications are subject to change without notice. Part #850-1244-01/4.11