Page 60 - HCS for Account Managers

Supporting Student Notes:

• The topic of a lack of a strong TCO or an analysis that our cloud solutions will be more expensive then an on-premise
solution does come up periodically from Cisco account teams or even customers. In many cases this is simply from
not comparing equal capabilities and accurately capturing the existing operational costs of the on-premise
solution. What we have seen is that typically the cost of acquisition of on-premise is being unfairly compared to an all
encompassing Hosted Collaboration solution (Sum of the price per user per month - PUPM). Some important points
to keep in mind as you work with your customers on these topics:

• The on-premise cost of acquisition (hardware, software, and installation Cost) its typically only about 40% of the total
cost of ownership with the remaining 60% coming from IT's on-going operational costs. (Please see image below as
well as the attached deck for a comparison example)

• Operational costs will increase when rolling out new features, architectural complexity increases, more FTEs
to manage…ie adding video (need a video expert), training for adoption of the new capabilities, and training
to manage a more complex system