Avaya has been very clear about its view of how enterprise telecommunications networks will evolve and migrate to over time. We at Combat Networks happen to agree with their vision and the strategy. Especially for Nortel installed base customers evaluating where to go from here. All things considered (heavily weighted on financial reasons), it makes a lot of sense to migrate to an Avaya Aura architecture in order to preserve the investment in Nortel infrastructure while taking advantage of new features and benefits that Unified Communications can deliver to an enterprise.
We are going to see some great deals and incentives from Avaya to make this migration happen with the least amount of disruption, retraining, and cost as possible. BUT…..there will be some costs that need to be addressed. Avaya has had the forethought to come up with a plan and has developed a model (and a services offering if you are so inclined -Avaya’s Self Funded Roadmap) to customers on where they can find operational savings within their existing telecom budgets to finance the migration.
The formula is simple, Avaya Aura and SIP can free up Operational Expenses to more than offset the migration costs for new hardware, software and licensing. There is an extremely limited Return on Investment/Savings Tool on the Avaya website (Avaya Self Funded Road Map) you input some very basic information including the number of employees your organization has, the number of branch locations and the region and whether your organization’s telecom infrastructure would be considered distributed or centralized.
If you are company with 3000 employees, across 12 offices in North America running on a centralized system, the Avaya Aura Savings Calculator produces a possible net savings of $265,000.
The savings are generally grouped under 4 categories:
- Network Centralization and Shift to SIP – $76,000
- Long Distance and Carrier Savings – $100,000
- Least Cost Routing Applications – $17,000
- Reduced System, Application, and Network Administration Costs – $72,000
We can debate whether the numbers are accurate or not, but Avaya has done a lot of research in the development of the tool that generates the web based results. There are opportunities to tweak some of the underlying cost assumptions to your specific situation, but as a customer you need to talk to a Reseller partner or Avaya directly to get your hands on an excel driven spreadsheet to get a more realistic representation of what might be the operational cost savings.
So once again, the idea is to look for operational cost savings to create an ROI on the costs associated with migrating and upgrading to Avaya Aura and assuming the numbers bare themselves out, it is a great model and there will be cost savings.
In our previous blog post, which ponders whether Telco’s may exit the Premises Equipment Supply, Delivery and Maintenance market, we briefly talked about the impact of Avaya’s Self Funded Roadmap map on the Telco’s. Avaya is proposing that all operational costs (ie. money customers send to the Telco) will be saved by implementing an Avaya Aura architecture. There are two pretty obvious problems with the adoption of this model. The first one is that many of the installed base customers of Avaya/Nortel purchase and maintain their telephony infrastructures with a Telco. The question is, “Will a Telco support (let alone actively promote) a migration plan that cannibalizes lucrative carrier services in exchange for lower margin hardware, software and licensing sales, promotes least cost routing applications/carrier arbitrage and reduced annualized maintenance costs?” The is answer is generally that Telco’s will not recommend any business model that puts their services revenues in descent mode.
We think the Aura Savings Calculator and the Self Funded Roadmap has merit. Avaya will most likely need to promote the program through non-Telco reseller partners to just get the information into the market. And customers may need to consider that the Telco provider may not necessarily be quick to demonstrate and work with a customer to realize the cost savings from moving to Avaya Aura.
