Dan Taylor, who really focuses on mobility issues for the most part had a great insight into enterprise VoIP in this post yesterday.

Another Data Point On Enterprise VoIP

I'm a realist when it comes to enterprise adoption of IP telephony. I've spent the past decade listening to an industry where the vendor hype just hasn't translated into the predicted sales volume. Sure, "convergence" looks good on paper, but it isn't as compelling when the business model is finally written.

The disconnect between consumers and the enterprise is cost. Consumers see the "price" per minute of telephony. Whereas enterprise IT managers see the "loaded cost" per minute of telephony. These are two different things. Consumers don't have significant costs for wiring, terminals, infrastructure and adminstration -- enterprises do.

Consumer: the consumer's cost is almost entirely the cost per minute from the telephone company or other service provider. A consumer orders service once, runs the wires (if necessary), buys a phone (if he doesn't already own one), and plugs everything in. Once set up, that's the last time he deals with infrastructure. From there, the only administrative cost is paying the bill every month, the cost of which is perceived to be negligible to the consumer.

Enterprise: corporate telecoms departments spend a relatively small percentage of their overall telecommunications budget (for fixed line especially) on the actual services from the telephone companies. As bulk purchasers, corporate buyers are able to negotiate lower rates than individual consumers and small businesses, so the cost of fixed line and wireless services tend to be lower when contracted by the corporate telecoms department. Meanwhile, the true cost of enterprise telephony focuses on several common components

Dan makes some really key points that can serve us all well. I'll try to encapsulate the important points.

"Convergence" looks good on paper, but it isn't as compelling when the business model is finally written. - Truer and more painful that many of us in the industry, and crucial for those entrants into the unified communications sector. Cisco and Microsoft, pay attention because this is important. Finding the ROI for convergence is a huge undertaking. Don't take it lightly. Convergence will impcat your business in ways you never anticipated...ways you couldn't have imagined. But the business model is onerous to develop, and it will never turn out quite the way you expected. To successfully immerse your business in convergence, be prepared to reinvent yourself. Reinvent business. Reinvent process. Reinvent workflow. Reinvent your company. This can be revitalizing when done right, or fatal when done wrong.

The true cost of enterprise telephony focuses on several common components - Dan cites the following:

• Terminals and handsets
• Cabling and physical infrastructure
• Moves, Adds and Changes
• Management, Admin and Support
• Telecom service costs

In my experience Moves, Adds and Changes coupled with Management, Admin and Support are where the real costs lie. The capital investment you'll make in a solution is trivial in comparison to what it will cost you to run it over five years. Don't overlook being through, even anal, about understanding the total cost of ownership. You don't want to be the manager who implements successfully, then leaves to repeat the process elsewhere, leaving in your wake a trail of systems that really don't pan out over the full life-cycle. That's the ticket to earning a bad reputation.

I can't say I fully agree with the quote from the Robert Francis Group report. They seem to indicate a feeling that enterprise IT executives should look to their own niche needs for VoIP. The reality is that VoIP (or more advanced unified communications) solutions can pay off and succeed in any environment. The key question is whether or not you're willing to put the due diligence in the front end. Successful VoIP is a  front-loaded endeavor.

I don't fault Dan's skeptical view a bit. Failed efforts have seen far more visibility than the real success. That's because when you're successful in converging a network and integrating your voice and data services, you're busy moving on to stretch the new resources to enhance your core business.



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