Zoom UCaaS Cost Assessment

Zoom Phone Cost

UCaaS Cost Assessment

UCaaS Cost Assessment Study finds Zoom provides value over application lifecycle when compared to industry averages Q1 2022 Robin Gareiss CEO & Principal Analyst Metrigy

Table of Contents Table of Contents 2 Executive Summary 3 Study Overview 4 Cost Analysis 4 Day 1 Costs: Implementation and Training 5 Day 2 Costs: Ongoing Management and Operations 7 Employee Onboarding and Provisioning 8 Self-Service 9 Trouble Tickets and Reliability 10 Conclusion 12 2 ©Metrigy, 2022 www.metrigy.com

Executive Summary Metrigy conducted a detailed study of 761 IT leaders from nine countries to determine the true cost of UCaaS—everything from implementation to training to operational costs—along with the value companies find with ease of use. IT leaders provided insight into their costs and utilization of several UCaaS providers. Zoom performed well in costs, as well as ease of use for both IT staffs and end users. According to the analysis: • Zoom costs 60% less to deploy than the industry average. • Compared to the industry average, organizations require nearly one fewer full-time- equivalent IT staff member to manage a Zoom UCaaS deployment, which equates to $83,000 annually. • 54% of research participants reported it took less than 15 minutes to onboard new employees onto Zoom Phone, compared to the industry average of 32.8%. • Research participants found Zoom generally easy for their end users, with Zoom having the highest percentage of employees with no training required (24%) to use the applications, or less than one hour of training (47.1%) required to use the applications. • Reliability and uptime also are high, with Zoom resolving more than 50% of all Zoom Phone-related issues within one hour, compared to the industry average of only 27.5%. 3 ©Metrigy, 2022 www.metrigy.com

Study Overview Zoom commissioned Metrigy to conduct a study in 2021 to examine the cost, utilization, and management of voice and meetings solutions. Metrigy fielded the study from July 28 to August 7, 2021 with a random statistical sampling of businesses with more than 1,000 employees. A total of 761 organizations from nine countries passed Metrigy’s extensive data integrity checks and were included in the study. Metrigy developed research hypotheses and questions and conducted the research independently. Research participants answered questions about their single UCaaS provider, or their multiple providers, for telephony and meetings. If companies used multiple providers, we asked for them to provide data for their primary provider and isolated figures for voice and meetings. The study evaluated the following: • Uptime and reliability • Employee ease and frequency of use • Employee training duration • Speed to problem-resolution • Cost to deploy • Cost to operate Metrigy received utilization and cost data on a total of 23 Unified Communications providers. Metrigy then calculated the average (measured as an arithmetic mean) across all numeric questions in the study, including costs, number of staff members required, and timeframes. After that, Metrigy segmented the average of the numeric responses received for Zoom and compared those to the average of the numeric response delivered for all providers in the study. Charts in this report contain the average of the data provided for Zoom, along with the average of the data provided for all 23 providers combined, allowing for the comparison of Zoom’s response to the industry. Cost Analysis Evaluating costs requires careful evaluation because provider pricing is not apples-to-apples, and can be complex. Some view UCaaS as “free” because it’s bundled into an overall enterprise license that includes other capabilities, such as productivity applications, networking hardware, or contact center platforms. We evaluated licensing costs and instructed research participants to isolate UCaaS application licensing without the additional bundled options, where relevant. Additional cost comparisons are more straight-forward. We analyzed one-time deployment costs, including the sum of third-party costs and internal staff salaries. We also analyzed ongoing management and operational costs, including IT staff time and third-party managed services. With all our cost analysis, we gather total costs and normalize the data as total cost per employee license. 4 ©Metrigy, 2022 www.metrigy.com

Day 1 Costs: Implementation and Training Two key costs are required to start realizing the benefits of the new solution: application implementation and employee training. Implementation includes the cost of third-party systems integrators, managed service providers, or the platform provider itself. It also includes the cost of the time of the internal IT staff, which is always required to some extent. Training costs comprise the internal staff time or third-party partners who train employees on how to use the applications and what value they provide. Obviously, the more complex the apps, the longer it takes to train employees, and the more training costs. As Figure 1 illustrates, Zoom costs 60% less to implement and train employees: those using Zoom are paying an average of $26.26 for implementation and $8.42 for training, per license, while the overall average for all providers is $72.53 and $13.96, respectively. Implementation and Training Costs, Per License Implementation Training $100.00 $90.00 $80.00 $70.00 $60.00 2.5x $50.00 $40.00 $30.00 $20.00 $10.00 $- Zoom Overall Average Figure 1: Implementation and Training Costs, Per License Training costs provide insight into application usability. Most UCaaS providers devote significant resources to developing intuitive applications with a logical user interface. The more intuitive applications are, the less time and cost need to be devoted to training. This also results in quicker user adoption, which in turn, drives faster time-to-value. 5 ©Metrigy, 2022 www.metrigy.com

Anecdotally, we also find that when companies use applications outside of work (for family communications, volunteer work, school associations, church groups, etc.) they are able to jump right into using those same apps at work. Research participants using Zoom said an average of 24% of their employees require no training, compared to an industry-wide average of 17.3%. Not only is there no training cost associated with those employees, but they also can start using the applications on Day 1, leveraging the value they derive immediately. They become productive quicker, and they don’t lose time doing their normal day job to attend training classes. Among organizations that required training, most spent anywhere from 30 minutes to a full day to train employees, and less than 5% spent more than a full day. As Figure 2 illustrates, 47.1% of Zoom’s customers spent an average of 30 to 60 minutes per employee for training, compared to 25.6% for all providers measured in the study. Essentially, employees at nearly half of the companies using Zoom were fully operational within 30-60 minutes, resulting in cost reduction and productivity improvement. Employee Training Timeframes 30-60 minutes of training 2+ hours of training 60.0% 50.0% 47.1% 48.3% 40.0% 30.0% 29.4% 25.6% 20.0% 10.0% 0.0% Zoom Overall Figure 2: Employee Training Timeframes On the flipside, only 29.4% of Zoom’s customers required two or more hours of training per employee, compared with nearly half of companies overall. Organizations must evaluate not only 6 ©Metrigy, 2022 www.metrigy.com

the impact on employees, but also on customers or business partners who use the platform to communicate. Day 2 Costs: Ongoing Management and Operations More significant than the one-time implementation and training costs are the ongoing management and operational costs. After all, these costs stay with an organization as long as they are using the UCaaS platform. They also are costs that may be hard for IT leaders to uncover. They can get prices from providers on implementation and licensing, for example. But how many IT staff members are required to manage the UCaaS platform? They typically don’t know until they start using the applications. That’s why we gather data that tracks the human costs associated with the applications. We evaluated a few areas of operational costs. First, we looked at the IT staff costs by asking how many full-time equivalents manage UCaaS, along with their average compensation. And we gathered the amount spent on third-party managed services. As Figure 3 illustrates, those using Zoom spend an average of $239.28 per employee per year, while the overall average among all vendors is $534.48 per employee per year. Research participants using Zoom spend 55% less to manage and operate their UCaaS platform than the industry average. This equates to $295 per employee, per year, or $24.60 per employee per month—savings that nearly covers the cost of a Zoom United Enterprise license ($30 list). Annual Operational Costs, Per Employee Internal IT Staff Managed Services $600.00 $534.48 $500.00 $400.00 2.2x $300.00 $239.28 $200.00 $100.00 $0.00 Zoom Overall Average Figure 3: Annual Operational Costs, Per Employee 7 ©Metrigy, 2022 www.metrigy.com

Compensation for IT staffs can vary, so we also track the number of IT staff members required to manage UCaaS (ie, platform, applications, integrations, day-to-day break-fix, administration and provisioning, etc.). Research participants provided the number of ___________ full-time-equivalents. So, for example, if a company has four IT staff members each spending about 50% of their time managing Number of IT staff UCaaS, the number of full-time-equivalents is two. members per 1,000 employees In evaluating the number of full-time-equivalents per 1,000 ___________ employees, we find that those using Zoom save an average of nearly one employee compared to the industry average. Research Zoom 1.98 participants using Zoom require an average of nearly two IT staff Average 2.78 members to manage the platform, while the industry average is nearly three IT staff members. Employee Onboarding and Provisioning Other factors also contribute to costs, productivity, and usability. One such factor is the ability to onboard employees and update profiles or permissions. These functions vary based on meetings platforms and voice platforms. On average, 32% of organizations onboard or change their employees within 15 minutes for meetings apps, and 32.8% do the same for voice. Among those using Zoom, those figures are 40.6% and 53.6%, respectively. (Please see Figure 4.) Percent of Companies that Onboard/Change Employees Within 15 Minutes Zoom Overall Average 60% 53.6% 50% 40.6% 40% 32.8% 32.0% 30% 20% 10% 0% Voice Meetings Figure 4: Percentage of Companies that Onboard/Change Employees Within 15 Minutes 8 ©Metrigy, 2022 www.metrigy.com

Similarly, more research participants using Zoom were able to update profiles and permissions within 15 minutes when compared to industry averages: 56.3% of those using Zoom updated profiles and permissions within 15 minutes for meetings, and 39.3% did the same for voice. Overall industry average figures are 38.7% and 36%, respectively. Both of these metrics underscore the time (and cost) savings for the IT staff, along with the quick onboarding of new employees. Figure 5: Update Profile/Permissions Within 15 Minutes Self-Service Making the IT staff even more productive, platforms offer varying levels of employee self-service capabilities for administrative functions. Among all research participants, 69% handle more than 25% of their administration functions through self-service; 80% of research participants using Zoom rely on self-service to handle more than 25% of their administration functions. Self-service is growing in many areas of both employee and customer engagement technologies. As people become more comfortable with technology, they want easy-to-use interfaces that allow them to quickly change functions, such as password changes or simple policies guiding functions such as call forwarding. Self-service improves employee satisfaction because they can quickly handle administrative functions without waiting for IT, and it also keeps IT’s focus on more urgent or complex issues. 9 ©Metrigy, 2022 www.metrigy.com

Trouble Tickets and Reliability A look at companies’ internal trouble tickets also provides insight into IT staff costs and productivity. We asked organizations how long it takes them to resolve trouble tickets and in what time frame. Among all research participants, 26% of voice trouble tickets are resolved within an hour, compared to 43% of the tickets with those using Zoom. Percent of Voice Trouble Tickets Resolved Within One Hour 50% 45% 43% 40% 35% 30% 26% 25% 20% 15% 10% 5% 0% Zoom Overall Average Figure 6: Percent of Voice Trouble Tickets Resolved Within One Hour The total number of trouble tickets also illustrates the reliability of UCaaS providers’ platform. Any downtime will impact productivity, as well as the satisfaction of employees, customers, and business partners. If customer communications are affected, it may negatively affect important business metrics, including Voice Trouble Tickets Per Month customer ratings and revenue. 60 56 50 The average number of voice trouble tickets per month is 40 34 56. Research participants 30 using Zoom report significantly fewer – an 20 average of 34 per month, or a 10 40% reduction compared to 0 industry average. Zoom Overall Average Figure SEQ Figure \* ARABIC 7: Voice Trouble Tickets Per Month Figure 7: Voice Trouble Tickets Per Month 10 ©Metrigy, 2022 www.metrigy.com

In addition to the internal trouble tickets that IT staffs address internally (i.e., device issues, provisioning problems, etc.), there are platform performance issues that IT must report to the UCaaS provider. These are problems that may be happening within the providers’ routers, applications, operation support systems, etc. We asked organizations how quickly their providers resolve these issues. Overall, 26.6% of issues are resolved within one hour for meetings, and 27.5% for voice. Those same figures for Zoom are 35.9% and 51.4%, respectively. Of course, phone downtime makes it impossible for customers to call the business, but almost as important, no video calls or screen shares can take place when meetings are down. As people continue to work remotely, the ability to support visual engagement has become increasingly important—and expected. Percent of Issues Resolved by Provider Within 1 Hour Overall Average Zoom 26.6% Meetings 35.9% 27.5% Voice 51.4% 0% 10% 20% 30% 40% 50% 60% Figure 8: Percent of Issues Resolved by Provider Within 1 Hour 11 ©Metrigy, 2022 www.metrigy.com

Conclusion UCaaS always has been a vital service to serving employees and customers, but as employees continue to work remotely, the meetings capabilities have become even more vital. Organizations must carefully evaluate providers in a bevy of areas, including technology capabilities, innovation, customer service, and value. Value not only encompasses costs but also factors such as ease of use, reliability, and self- service. As this report, backed by a large global study, indicates, Zoom’s meetings and voice services are performing significantly better than industry average across a variety of areas. To summarize the data gathered in the study: • Zoom costs 60% less to implement and train employees, with Zoom customers paying an average of $26.26 for implementation and $8.42 for training, per license, while the overall average for all providers is $72.53 and $13.96, respectively. • Those using Zoom said 24% of their employees require no training, compared to 17.3% of all employees from the overall industry average. • Nearly half (47.1%) of Zoom’s customers spent only 31 to 60 minutes per employee for training, compared to 25.6% for all providers measured in the study. Employees at only 29.4% of companies using Zoom required two or more hours of training, compared with nearly half of companies overall. • Those using Zoom spend an average of $239.28 per employee per year, while the overall average among all vendors is $534.48 per employee per year. Those using Zoom spend 55% less to manage and operate their UCaaS platform than the industry average. This equates to $295 per employee, per year, or $24.60 per employee per month—savings that nearly covers the cost of a Zoom United Enterprise license ($30 list). • Zoom customers require an average of one less IT staff member per 1,000 employees to manage the solution compared to the industry average. • On average, 32% of organizations onboard or change their employees within 15 minutes for meetings apps, and 32.8% do the same for voice. Figures for those using Zoom, are 40.6% and 53.6%, respectively. • More research participants using Zoom were able to update profiles and permissions within 15 minutes when compared to industry averages: 56.3% of those using Zoom updated profiles and permissions within 15 minutes for meetings, and 39.3% did the same for voice. Overall industry average figures are 38.7% and 36%, respectively. • Among all research participants, 69% handle more than 25% of their administration functions through self-service; 80% of research participants using Zoom rely on self- service to handle more than 25% of their administration functions. • Among all research participants, 26% of voice trouble tickets are resolved within an hour, compared to 43% of the tickets with those using Zoom. • The average number of voice trouble tickets per month is 56. Those using Zoom report only 34 on average per month. And, 27% of issues are resolved within one hour for 12 ©Metrigy, 2022 www.metrigy.com

meetings, and 28% for voice, overall among all providers. Those same figures for Zoom are 36%and 51%, respectively. As you’re evaluating providers, consider: • Implementation costs, including IT staff compensation and third-party partner costs, as well as employee training. • Operational costs, including ongoing IT staff costs to manage the service, third-party managed services, and the ability to quickly address issues through self-service administration and a reliable platform • Employee productivity, particularly when they are offline because of slow break-fix or an unreliable platform. ABOUT METRIGY: Metrigy is an innovative research firm focusing on the rapidly changing areas of Unified Communications & Collaboration (UCC), digital workplace, digital transformation, and Customer Experience (CX)/contact center—along with several related technologies. Metrigy delivers strategic guidance and informative content, backed by primary research metrics and analysis, for technology providers and enterprise organizations. 13 ©Metrigy, 2022 www.metrigy.com