The Seamless Enterprise

Comprehensive news and discussion of enterprise communications and converged network solutions.

The Buy-vs-Rent Dilemma Comes to UC

on January 19, 2012 by Dan Lipson

As I visit with customers about convergence technology, the conversation often pivots around the “capital cost” versus “operating cost” dilemma. Should a company make a large capital investment in Unified Communications or should it work entirely from operating funds by subscribing to UC?  My answer often surprises them: There is no right or wrong answer from a technology perspective, as it all depends on a company’s financial situation.

Imagine that we were looking at two companies that at first glance appeared identical in every way (size, number of branches, locations, competitive situation in their industry, existing infrastructure, etc.). What differences might we find that would make investing capital in UC a better financial decision than subscribing to UC on a seat-by-seat basis?

Excess cash on hand is one major determining factor. If the first company had a large surplus of cash on hand and the second company had little, the first company might be better off purchasing its own UC infrastructure while the second company might be better off subscribing to UC services. Of course, this assumes that no other capital investment opportunity elsewhere in the business offers a better business case for the capital. That is rarely the case.

Research and development projects are a good example, because developing new technologies and prototyping new products is a high-risk investment activity. So while a bank is often willing to finance short-term receivables resulting from sales of an established product, they rarely loan money to fund R&D. If there is excess cash in a company, R&D often has first dibs because few companies can borrow capital at a reasonable rate to fund new product development.

On the other hand, a company may have more than enough cash, but then technology investments have to compete with corporate objectives such as paying excess cash back to shareholders or owners as a dividend. As such, technology investments are often in a Catch-22 situation. In today’s competitive business environment, most organizations are facing the daunting task of reducing capital expenses and controlling costs, even while supporting communications technology to enable employee collaboration and mobility. 

One thing that people often forget about subscription services is that they come with a certain amount of “built-in” financing. Sprint Complete Collaboration is one new product that fits this description. By providing a fully managed, hosted VoIP and UC solution, Sprint can equip a company with some of the most advanced features without a substantial capital investment. 

Sprint Complete Collaboration is owned, operated, and maintained by Sprint, leveraging our data centers. Our customers don’t have to worry about using up their own data center resources like rack space and power. They can also rest assured that we are thinking ahead and planning for any needed software upgrades, security patches, and periodic technology refreshes.  

When a company chooses to subscribe to Sprint Complete Collaboration, every company location on our IP network will be able to equip its employees with a full selection of collaboration tools, including Voice-over-IP (via desk sets or virtual desk sets on their PCs), instant messaging, presence, mobile integration and web and audio conferencing.

I look forward to meeting with more customers in the Midwest  in 2012 to talk about Sprint Complete Collaboration, as I truly feel like this is the year when all of the ‘UC’ technology planets will be coming into alignment.


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About the Author

Dan Lipson has 27 years experience in network technology. Today he is focused on designing, deploying and managing networks. He provides guidance to customers and sales teams across the Midwest by clearly understanding client needs and ensuring Sprint solutions meet customer business and technical requirements. His specialization is Unified Communications (UC), Hosted UC, SIP Trunking, Mobile Integration, Global MPLS and Managed Services. Dan is currently a Global Converged Solution Manager at Sprint. He received his MS in Network Technology from DePaul.

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