Unified Communications Almost Free

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
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Unified Communications Almost Free

When Avaya started pushing $99/user unified communications solutions, I knew that there would be a price war in the UC space. In my opinion price wars are bad. Nobody wins in a price war because in order to deliver low prices, margins are cut to the bone and inevitably service suffers.

The implication here is not that any single vendor is providing inferior service at the moment  mind you but price wars generally don't end well for anyone.

Having said that, we have the opposite end of the spectrum in open source where the price is actually zero. Companies like Digium and Fonality have found ways to add value to free and in doing so have generated solid revenue. We aren't talking billions of dollars but these two companies seem to be generating solid revenues for small to medium sized organizations.

I got to thinking about pricing and communications when I read Objectworld has a new UC offering for 7 cents per day per user. This comes out to $2.10/month or $25.20/year.

Objectworld seems to have solid products and I am unsure as to whether this move is smart in the long term or not. On the one hand it takes prices out of the equation for a company considering a UC solution. On the other hand it gets potential customers wondering if the company can make enough money at these price points to be around in a  few years.

What are your thoughts?

For more on Objectworld check out my podcast with CEO David Levy.

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