Amid big productivity claims, Microsoft launches unified communications

Provides pricing for software and new videoconferencing hardware

Microsoft's launch of Office Communications Server 2007 today included some staggering claims about the productivity of unified communications. In an hour-long webcast announcement from San Francisco, Microsoft officials listed benefits of OCS and also launched a 360-degree videoconferencing device called RoundTable and three other related communications products, all designed to lower communications costs.

In the webcast, Microsoft Chairman Bill Gates said savings with OCS are so enormous that Forrester Research Inc. found that 15 early adopters could expect more than a 500% return on their investments in OCS over three years.

Meanwhile, pricing for the five new products was listed in five different product fact sheets and two different links to Web pages.

Given the prices listed by Microsoft in those online documents, its unified communications system could cost $3,000 for videoconferencing hardware, plus another $4,094 for software and client licenses for five users. The system would provide presence and VoIP functionality, as well as Web collaboration capabilities and more. (The collaboration would cost a recurring $15.42 per user per month.) However, those prices do not include the Exchange Server 2007 announced earlier.

The savings projections are based in part on Microsoft's expectation that organizations will use OCS in their existing infrastructures. Customers will leverage existing Internet connections and PCs, paying "only for the costs of a server or two," Gates said.

Two customers were part of the webcast, but Microsoft provided links to case studies in which many more users reported cost savings of 25% to 30% over traditional communications technologies. For example, Etienne de Verdelhan, CIO at cosmetics retailer L'Occitane, said OCS's support for unified communications had yielded "substantial" time savings and productivity gains.

A video demonstration of OCS helping with team collaboration at Virgin Megastores showed how a new marketing campaign video could be shown to decision-makers at stores nationwide with a videoconferencing session easily created with a few clicks and the new RoundTable device.

After the webcast, one analyst, IDC's Nora Freedman, warned against drawing hasty conclusions about productivity gains from unified communications software. Vendors "cannot expect to sell UC based on a grand vision of productivity, but rather on a smaller set of wins focusing on user scenarios," she said in an e-mail to Computerworld. "Customers won't make the incremental spend to make UC work for just productivity's sake alone. How can you guarantee that the time saved is actually going to be reapplied to revenue-generating opportunity?"

Even so, Gates and Jeff Raikes, president of Microsoft's Business Division, touted the RoundTable as a sophisticated videoconferencing device. Raikes said the RoundTable would sell for $3,000, far lower than competing corporate videoconferencing systems that Raikes said might cost $300,000. Although they didn't identify any high-end videoconferencing systems by name, Cisco Systems Inc. has been promoting its TelePresence system, and Hewlett Packard Co. provides special videoconferencing studios with a Halo product.

The company also announced pricing for OCS 2007 client access licenses, using estimates based on an average-size business. Standard licenses for both instant-messaging and presence capabilities average $21, while an enterprise license with voice-over-IP call management features and conferencing averages an additional $97. Customers also need the actual server, which costs $488 for the standard version and $2,791 for the enterprise version.

In addition, Microsoft announced the Office Live Meeting 2007 webconferencing system. Office Live Meeting can be integrated with RoundTable hardware and it allows users to choose whether they want audio over VoIP, a traditional public switched telephone network or a hybrid of the two. A license for a professional version of Office Live Meeting 2007 costs $15.42 per user per month, according to Microsoft's Web site, with a minimum purchase of license for five users.

Freedman said that in order to take advantage of the new OCS's full voice capabilities, users must have Microsoft Exchange Server 2007 -- and Microsoft today announced a new Exchange Server service pack. To clarify how important Exchange Server will be for OCS's voice functionality, Clint Patterson, a director in unified communications at Microsoft, said OCS "works better" with Exchange for full voice mail and unified messaging and other functions, but OCS has "no particular dependency" on Exchange. The service pack is available free of charge to existing Exchange Server 2007 customers.

Another newly announced product, Office Communicator 2007, is client software that provides phone, instant messaging and video communications for PCs, mobile phones and Web browsers, Patterson said. It is in included in Office Professional Plus 2007 and Office Enterprise 2007 but is available as a stand-alone tool for a $31 license fee.

Related story: Six objections to Microsoft Office Communications Server

Copyright © 2007 IDG Communications, Inc.

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