What Next for Lync?

Here we take a look at what’s happening with Microsoft Lync. We report on likely future plans for the product, look at a ‘wish list’ of features and functions that resellers would like to see included in the application as well as a report on total cost of ownership.

There is a lot of talk in the market regarding Microsoft Lync and has been since the product was launched as a successor to OCS. Only in recent times however have we started to receive actual user case studies for deployments which leads us to believe that talk does not necessarily equate to channel uptake and sales.

Many resellers see Lync as a bit of a black art and are not sure where to start on the journey towards selling the product. Westcon’s Ralph Donohue, their GM Manager UK, Ireland and Greece, outlines one aspect of this when he told us he believes there is still some confusion in the market from resellers on how they can make margin from the Lync proposition if they are not a licensing house for Microsoft and therefore cannot sell the licences.

“The answer is that resellers can use Lync as the driver to make high margins on the eco-system products that creates the infrastructure for Lync. Westcon delivers the broadest and most comprehensive Lync optimised eco-system anywhere in distribution and has the ability to offer brand choice in each technology area associated with Lync deployments providing: choice, flexibility and best-of-breed solutions from a single point of procurement.

We are seeing increased market opportunities for Lync partners who include managed or professional services in their Lync propositions, thereby creating recurring revenues and stickiness with their customers. Another growth area is conferencing and collaboration; Lync room systems enhance the collaborative, video and voice experience and provide great opportunities to partners to deliver this part of the Microsoft Lync solution. Equally deployments of Lync in high-end multi-media contact centre environments have also grown and Westcon has relationships with AltiGen and Enghouse enabling partners to add additional value by delivering the contact centre solution.

Most Resellers recognise that there isn’t a single vendor that can supply everything to provide an end to end solution and that they could be dealing with a number of vendors which would prove to be very complicated and time consuming. With Westcon this isn’t the case - you get all the products and services from a single source, simplifying the supply chain, eliminating logistical issues and facilitating complex deployments. Westcon is dedicated to making Microsoft Lync solutions simpler and more profitable for our partners, providing unique programmes and exceptional financial and technical support to accelerate the Lync business practices of our channel partners.”

In so far as the answer to the question is Lync channel dynamite or a damp squib Richard Carter, Nimans Group’s Sales and Business Development Director, says that adoption of MS Lync has so far failed to fully excite the SMB arena and that the enterprise market is where it’s much better suited and has a greater presence.

“Lync at the moment is very much an enterprise product. Will that change? Only time will tell. There’s quite a lot of traction at the higher end of the market, certainly in terms of the number of end points we are shipping.

SMB is an area resellers need to keep an eye on but they are currently cautious. They are telling us it doesn’t really stack up as a voice product in terms of its sophistication and feature set, when compared to other solutions. It’s much better suited to a university or a council where there could be hundreds if not thousands of phone extensions.

Take a Lecturer for example who may have a phone in his office. For the majority of time it’s not used and when it is it’s in a fairly limited and basic way.”

Carter added: “We are not seeing our resellers abandon ship in favour of Lync. That may change in the future dependent on price and feature set but I don’t see it happening at the moment.”

Looking ahead…

Scott Riley, Director of Cloud and Hosting Solutions at GCI Channel Solutions comments on what he believes Lync will look like over the next couple of years and begins by lamenting that Lync today could do better in the contact centre applications market.

“The current Lync contact centre application is quite basic and pretty much limited to pick up and hunt groups but in any call and contact centre application users quite rightly need a lot more features such as extensive reporting and measurement of call waiting times, a wallboard, call queues etc. etc.

This is why we work very closely with Microsoft Gold vendor Apera who have produced an outstanding third party call and contact centre application that seamlessly integrates in to Lync deployments that transforms users contact centre capabilities.

What will happen with Lync in the next few years? Well for a start we see Skype and Lync progressively merging in to one brand and one product for home and business users. There are already 300 million Skype users which gives Microsoft a dominant position and a reason to lay claim to having the largest UC base in the world.

We see room based conferencing systems developing also from the likes of Polycom and others with those providing good low cost solutions rapidly expanding the market.

The area of fixed mobile convergence is one where I believe there is still a lot of work to be done – we are a long way off having a great solution as far as I can see. People still tend to reach for their mobile phones as a matter of instinct for any type of call. Lync clients are easy to use over VoIP but when mobile they are not so seamless and feel a bit gimmicky. They need to be smooth and seamless between business and personal calls.

Finally I see Microsoft making a move from boardroom to living room. X-Box units already have Skype and an HD camera so it’s a short leap from there to full blown video conferencing in the home or home to office and vice versa.”

Picking up on what Scott Riley says Myra O’Connell of distributor Steljes says that Lync conferencing solutions are here now.

“Lync has now been brought into the meeting room with the launch of Smart Room System for Microsoft Lync. The solution enables rich audio, video and data collaboration. It is changing the way users engage with and capture content in a Lync meeting. Everyone in the meeting – regardless of their location – can annotate over the presentation on the interactive display in digital ink, adding their contributions in real time. As companies look at how to reduce their costs, the Smart Room System helps them make the most of their investment in Lync.

The software makes it easy to share information, capture ideas and determine next steps. It allows for panning and zooming to any level of detail, regardless of the complexity of the content to promote free-flowing, comprehensive collaboration sessions. The solution features unlimited digital whiteboard space and enables anyone at the meeting – regardless of their location - to take over the whiteboard space and write notes over any application. There are options for saving the work and integration with Microsoft Exchange to instantly email session notes to all attendees.

The solution offers a unique way to improve the efficiency and productivity of any company – regardless of its location or size - by reducing travel costs, saving time, reducing carbon footprint and improving business processes.”

Free Lunches?

It’s interesting to hear what other UC suppliers have to say about Lync and Avaya’s corporate blogger Eric Lai has written a great deal on the subject.

Unlike some UC players that have gone on a major offensive against Microsoft, Avaya says Lync does not trouble them.

Lai says, “Not everyone knows this, but Avaya offers a Lync plug-in called Avaya Client Applications for Microsoft Lync. This enables Lync users to connect to an Avaya Aura collaboration server for voice, video (up to 7,500 simultaneous voice/video/web users and 150,000 total provisioned users) and other real-time communications. Companies that want to make sure their telephone calls and video conferences are echo- and jitter-free are choosing Avaya Aura.”

He continues, “As a leader in real-time collaboration, we’re not unduly wowed by Microsoft’s claim to have sold 5 million Lync voice licenses. With our UC product for SMEs, IP Office, alone Avaya has sold more than 10 million licenses. While Lync sales ‘grew’ 35% year over year, IP Office sales have grown 50% over the past two years. This doesn’t include the millions of other enterprise workers using Avaya for VoIP and telephony.

One of the lessons I’ve been trying to teach my kids is that nothing in this life comes free. Parental rewards must be earned (via good grades, behaviour, etc.), yes. But everything in life comes with a price. Which is why ‘free’ games on the iPad also come with constant annoying ads for paid upgrades. Or why the true cost of that Samsung Galaxy smartphone they see on TV isn’t its $199 price, but the resulting $1,000 annual phone and data plan. Etc.

So, based on the halo effect of the free Skype and Lync’s integration with low-cost cloud services such as Office 365, you might think that Microsoft is the low-cost choice for UC.

And…you would be wrong. In the July 2013 report from Nemertes Research analyst Robin Gareiss entitled “Operational Cost Drives Stark Differences in First-Year Telephony, UC Costs” he examined the important question: what vendors’ VoIP and UC solutions offer the best bang for the buck?

Nemertes’ study is admirably detailed. To obtain real-world cost data on IP telephony and UC, Nemertes conducted detailed interviews with IT pros from 31 companies. In addition, it surveyed several hundred additional IT professionals online, which, after running strict data validation and integrity checks, resulted in 180 valid responses.

The results? The total median first-year cost for IP telephony was $1,305 per endpoint. Avaya and Cisco were both about $1,100. Microsoft Lync, on the other hand, was the most expensive of the seven vendors by far, costing an average $2,482, or nearly DOUBLE the median calculated by Nemertes.

Customers of Microsoft attributed the higher cost to ‘challenges related to integration and sound quality,’ according to Nemertes, with the analyst noting that often, Microsoft users start with Lync (and in some cases, OCS), using instant messaging and presence. But when they add voice and/or video, that adds complexity they often did not anticipate.”

Operational cost is key, of course says Eric Lai of Avaya. “As Nemertes puts it: ‘IT professionals rightly argue that they can get almost any vendor to come down on initial capital costs and often include assistance with the implementation. The big unknown, though, is how much the system will cost to operate on an on-going basis’. That’s because when factors such as internal staff salaries and training, equipment maintenance and 3rd-party tools are thrown in, you get the clear TCO picture.

And that picture ain’t pretty for some solutions.”

Ed Says…

Nemertes make interesting points when it comes to looking at the total cost of ownership for unified communications deployments. Professional services revenues are often touted by vendors as additional income streams especially where product margins are low. In the case of Microsoft Lync however these end user costs would seem very high. It would therefore be interesting to see how GCI Channel Solutions hosted Lync model could/would reduce these costs in a TCO analysis.