How the vendors stack up

Nemertes assesses costs by each voice over IP vendor.

Nemertes assessed costs by vendor. It's important to note that these costs reflect the average of actual dollars spent by the 65 companies surveyed, divided by the number of end users on the VoIP system at the time of the study. Nemertes anticipates some changes to these numbers as companies add more users to current systems.

Operational costs:

•  Companies with fewer than 1,000 end users: Avaya is highest, followed by Nortel and Cisco . ShoreTel, designed primarily for small and midsize businesses, is significantly less expensive, validating customer feedback that its system is easy to use and install.

•  Companies with more than 1,000 end users: Cisco is highest, followed by Nortel, Avaya and ShoreTel.

Capital costs:

Avaya was the highest in both size categories, while Nortel had the lowest costs for fewer than 1,000 end users, and ShoreTel had the lowest costs per unit for more than 1,000 units.

According to the research, companies that install Cisco to a large number of locations, and hence, a large number of users, tend to install a Call Manager in multiple locations, raising the cost per unit. Additionally, they often find their routers at remote locations are incompatible with the VoIP system, and they must upgrade mid-project - again adding time and costs to the rollout.

Avaya's cost per unit drops for installations of more than 1,000 units, illustrating that the bulk of its operational costs are in the installation and troubleshooting of the switch itself. Once that's up and running, expanding the system out to thousands of users drastically lowers the cost per unit. Also, many of the companies that are using Avaya's equipment are extremely concerned about redundancy, so they have purchased more than one IP PBX, which raises the cost - particularly when assessing it per user for smaller installations.

Nortel, on the other hand, has a fairly good handle on pricing - it's not too high in any category and typically represents an "average" or "fair" cost when measured by unit.

ShoreTel's cost per unit is lowest in every category except capital costs and total costs for small rollouts.

New construction savings

For new buildings, cabling costs can be a huge number in the "savings" column. Companies report saving 20% to 40% by running wiring for one network instead of two. Advertising and communications firm inChord Communications, for example, slashed 40% on cabling cost in its new building, from $252,000 to $180,000.

Back to feature: The ROI of VoIP

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