Microsoft Office Communications Server
Microsoft takes on telcos
Comment August 18th, 2008

By Roger Howorth

Late last year Microsoft launched Office Communications Server (OCS) 2008 and Office Communicator 2007, the complementary desktop client for the new server suite. If nothing else, the pair could be used as a bargaining tool to help reduce the costs of office telecoms.

If you haven’t seen them yet, they’re well worth a look. After all, until now companies have had little choice but to buy desktop phones from BT or one of several smaller suppliers offering similar kit at slightly lower prices. Voice over IP systems may seem attractive, but the cost of new VoIP handsets is often prohibitive, leaving many VoIP customers with little choice but to use software and a headset connected to each PC instead. By the time such factors are included in the calculation, many firms find they would spend less if they stick with tried and trusted telephone technology.

All of which sounds like there is a great opportunity for OCS to steal market share from the incumbents. Unfortunately businesses would probably find the setup costs for a small OCS deployment are higher than for a comparable PABX.

For example, to wire a small office for telephones would cost a few thousand pounds, which would include supplying and fitting all the kit. While OCS does away with the need for dedicated phone hardware and cabling for each user, you’d need to buy three servers just to run OCS. Free server virtualisation tools could be used to squeeze those servers onto one piece of hardware, but the server hardware would still cost about £3,000.

Windows Server licenses and the OCS software would cost around £3,000 more, plus the client access licences (CALs) for each PC connecting to the system. It’s also worth noting that currently there is no license server to enforce OCS CAL usage. While this approach works well for very small companies, which usually buy CALs and throw them in a cupboard, larger organisations are less comfortable with such a haphazard system. Some prefer a license server so they can be sure they are not spending too much or too little on licenses. In any event, a minimal OCS system providing phones, instant messaging and web conferencing would cost more than a few thousand pounds to get running.

Mid-sized companies may find the difference in deployment costs to be marginal. In such cases the matter would probably be decided by the tariffs for phone calls. Telco’s such as BT are in an excellent position to offer attractive tariffs for long distance calls and things of that nature. It’s not yet clear whether OCS resellers could put together similar price packages.

All of which makes the future for OCs seem a little difficult to call. But deployment and operational costs may be outweighed by the logging and accountability requirements of some industries, so we may yet see certain sectors acting as early adopters despite the possibility of an unfavourable cost equation.

But in the final analysis, Skype’s free PC to PC based voice calls along with the instant messaging systems from Yahoo, MSN and AOL were the killer applications of the last decade. Walk into any home or office and you’ll probably see people using them. OCS is Microsoft’s attempt to ride that wave, and in the long run it may well succeed.