First Look at Microsoft's Phone System

A dramatic change is looming in the phone system market. Your next phone system will not be a system at all. It will be a piece of software installed on a server. You'll probably purchase it from the same company that sells you servers and network equipment. If you want a phone on your desk, you will have a small computer with phone-like features (a handset, a hold button, etc) provided by phone software. Many of you are already operating this way.

I flew to Houston this week for my first look at Microsoft's Response Point phone system. Response Point is Microsoft's first complete phone system including dedicated hardware, handsets, and voicemail. Microsoft's goal is to introduce a system that looks and feels like a standard phone system but sets the stage for a huge transition. The transition to a software based phone system. The idea is nothing new, vendors such as Cisco and I3 have been selling systems like these for years.

Response Point is unique in that it is designed and priced for small businesses with basic phone needs. It provides an amazing voice recognition system that removes the complexity of basic phone usage. Do you want to call a coworker? Just speak their name. Pick up a call on park? Just say the "magic" words. The quality is remarkable. You won't have to repeat yourself often.

The phone system, for now, is pre-installed on a dedicated hardware platform. There are two manufacturers that will offer a product under the Response Point name - Quanta and D-Link. Quanta has a superior feature set including Power over Ethernet support on the phones (translation: lower total costs) and remote gateway support which will allow phones at your home or remote office (technology trap: If you try this, you will have voice quality issues).

The system really shines in the areas of configuration, voice recognition, and compression. Setup is FAR easier than any other phone system I've seen. A low end IT technician or advanced non-technical user could setup a new user, move a phone, or change a voicemail password without any training. The voice recognition features are amazing. Microsoft has really mastered that technology. In addition the compression of voicemails is incredible - about 100KB per minute. My Avaya IP Office cranks out about 1MB per minute of voicemail. Have you tried opening your emailed voicemail with your Blackberry? Even a 1 minute voicemail isn't worth the trouble.

As you should expect in a version 1.0 product the system has crippling weaknesses. Backups are a manual process and can only be automated through a Scheduled Task (translation: too much trouble). There is no Call History on the desktop application unlike almost all of its competition. Want to set a specialized holiday greeting to inform client's of your hours? Only possible manually. Forwarding a voicemail to another user? Not without email access. These are only a few of the features that Response Point lacks. The system has a long way to go.

At $2500 with either 4 or 5 phones (varies for Quanta vs DLink) and about $160 for each additional phone, it is an attractively priced solution. However it will not compete well against low-end Samsung or Panasonic systems that provide many more features with less baggage. My recommendation is to wait until at least Version 2.0 before proceeding. Avoid the normal startup bugs and let Microsoft bring the feature set up to a competitive level.

As a business owner you need to start familiarizing yourself with the concept of a phone system as software. If you can do that you will get a remarkable number of new features on your phone system and save a substantial amount of money.

Executive Technology Briefing - November 2007

I hope this inaugural edition of the Executive Technology Briefing finds you well. This newsletter’s goal is to give you insight into your technology purchases. I will examine the costs, options, and value of business technology systems. I promise to keep it brief and packed with valuable information.

How can you reduce your technology spending next year?

If the budget is looking tight, there are a number of ways to minimize your technology spending. Here are a few ideas:

· Rely on remote support: GCS’ remote support technologies can cut onsite service trips dramatically. Most GCS clients already use this extensively. You can certainly use it more. Let us know you need to reduce costs. We’ll rely more heavily on remote support.

· Proactively replace server hardware: Waiting until a server fails can double or triple the service costs of replacement.

· Lease the necessary upgrades: With our extensive leasing options you can spread payments over a three or four year term including all service, hardware, and software. Also ask your CPA about important tax benefits of equipment leasing.

· Qualify for Microsoft discounts: When you purchase 5 Microsoft products at any one time, you qualify for steep discounts on all additional purchases for a 2 year period. Email me for more information.

· Provide employee training: Why do some users require hours of support per month while others require none? Support costs are much lower for users with greater technical skills. Even a little training can have a big impact

Is your fiscal year end approaching?

I hope you are burdened with excess profits! If so now is a great time to upgrade your 3 or 4 year old desktops or notebooks. Windows XP will become much more difficult to acquire in the near future. The benefits of Windows Vista do not outweigh the learning curve for the majority of users. I strongly suggest upgrading your aging desktops and keeping Windows XP while you still can. Most clients will want to skip the Vista operating system altogether. Unfortunately most current copies of Windows XP cannot be transferred to a new PC – they are forever tied to one computer. You will have to buy another copy with your next PC. Call or email me for a quote on your computer upgrades.

Help with building an accurate IT budget.

Many of my clients struggle when creating a technology budget. Here are some simple rules that will dramatically increase your accuracy. If you need more detail I’m happy to help with annual budgets or 3-5 year technology plans. I can even provide itemized estimates for planned upgrades or replacements.

· All equipment has a limited life span and will be replaced every 4 years.

Computer: $1200
Laptop: $1500
Server: $3000-$7500
Printer: $150 - $5000

· Every employee change (hire, fire, desk move, etc) will require 1 to 4 service hours

· A new employee will cost at least $2000 in new technology

Computer: $1200
Microsoft Office:$400
Setup: $300
Phone: $200

· On average an employee will cost about $50 per month in technical support services

· Subscription services such as virus scanning, warranties, etc can add up to thousands of dollars per year.

o Virus scanner annual costs: $25 per user
o 1 Year Service Contract(Warranty) on Network Equipment: $350
o Internet connection should be $200 - $600 per month
o Phone Service – between $200 and $1000 per month for 5 to 45 lines. If you’re still paying more than $600 per month for a PRI – let me know.