1. U Michigan Voice Service IT Central Services Andy Palms January 5, 2005

2. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 2 Agenda Overview of U Michigan situation Voice cost components A few VoIP options Our direction

3. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 3 Voice Stats MSL-100 with 15 remotes –Few hi-cap circuits: T1, DS3 Campus faculty/staff 28,000 legacy lines Campus 1,500 VoIP lines Hospital 10,000 legacy lines (in transition) Residence Halls 5,800 legacy lines Family Housing 1,500 legacy lines Off campus 1,200 Centrex lines ~47,000 phones

4. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 4 Data Stats Very robust backbone LANs –85% cat5 or better (excluding Res Halls) –Mostly 10/100 switched –Few switches on UPS’ ~55,000 PCs

5. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 5 What voice service do faculty/staff want? Faculty and staff –Basic service (dial-tone) –Identify with their UM phone number –Display for caller ID –Voicemail –MOBILITY Administrators –Online ordering and reporting, live ordering –Predictable rates, lower rates –Full service (dept’s don’t need/want their own voice staff) –Portability of phones

6. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 6 What voice service do students want? Students in Residence Halls –88% have a cell phone Do not identify with their UM phone number Basic service (dial-tone) for local calls Use cell phone for LD –Voicemail (a la answering machine) - one per room –Services available via cell phone (single device), integration with other communication services –Emergency 911 –Summer camps

7. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 7 Voice Infrastructure - Today UM SL100 Long Distance Local Legacy Trunks Internet VoIP Server Legacy Line Legacy Set (35,000) Meridian Mail (decommission) Unified Messaging Campus Network VoIP Set (1,500) Analog Gateway Legacy Set (0) Legacy Line

8. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 8 Voice Costs ComponentPortion of Cost Central Management2% Advanced Services (VoIP/Unified)16% Account and Project Management6% MACs23% Infrastructure Management6% Infrastructure13% Centrex and Remote Services4% Long Distance (old rates)14% Local Calling11% Operators5%

9. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 9 Advanced Services - Voice “R&D” No legacy R&D VoIP (10%) –Be on the cutting edge –Instead of… Wait for new technology and upgrade –Preference for continued centralization

10. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 10 VoIP Pilots Cisco proprietary system –1,200 lines in production –Standards based product expected in ‘05 Nortel MCS-5100 –200 lines in production –Well connected applications Broadsoft Broadworks –150 lines about to go into pilot –Standards based (SIP), integrated into MSL-100 –Supports Cisco and many other sets

11. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 11 Advanced Services - Unified Unified Messaging (6%) –Integrated e-mail, voicemail, faxing –MS Exchange back-end –Follow me, Find me Increased staff productivity??

12. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 12 Account and Project Mgmt (6%) Mgmt for large projects Raceway coordination Billing services Information Systems

13. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 13 MACs (23%) Most potential for cost savings Decrease truck rolls –Implement dedicated plant for legacy service

14. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 14 Infrastructure and Management (19%) Switch (maintenance and operation) Remotes Machine rooms Outside plant (copper and 225 manholes) Repair of damaged infrastructure (bear portion of full cost not marginal cost)

15. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 15 VoIP Options (magic/work) Pure VoIP (full speed ahead for a campus-wide deployment) - ”PUSH” approach –Would require an investment of at least $8M over 5 years –Net effect=$370K in additional cost over 5 years –Does not include cost of separate network for VoIP, additional UPS’, network upgrades, or end user/admin cost shift Digital-Analog Gateway - “PUSH” approach –A bridging solution only. Hardware would have to be tossed at the end. Would free up machine room space from main switch and switch itself, removing legacy maintenance expenses. Users could move equipment easily and feature changes are software. –Would require an investment of $6M over 5 years –Net= - $920K in savings over 5 years (assumes “dedicated plant” model; most of savings is “dedicated plant”)

16. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 16 Legacy Option Move to “Dedicated Plant” and improvements in workflow –Reducing the cost of MAC’s (especially Moves and Adds) –Re-engineering the order and billing process –Estimated reduction of 9 FTE for savings over 5 yrs=$3.5M

17. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 17 Off Campus Calls 80% of calls are terminated on campus

18. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 18 LD Minutes

19. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 19 Local and LD Using VoIP for LD (14%) –Decreased per minute charge 1.6 cents versus 3.4 cents –No trunks Save ~0.7 cents/minute –Consider not charging for LD Local IP service becoming available (11%)

20. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 20 Voice Infrastructure - 1 Year? UM SL100 Local and Long Distance Internet VoIP Server Legacy Line Legacy Set (35,000) Unified Messaging Campus Network VoIP Set (1,500) Analog Gateway Legacy Set Legacy Line

21. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 21 VoIP Plans for Next 1-2 Years Deliver increasing amount of LD via VoIP Continue to replace Centrex with VoIP as needed Continue to use VoIP for temporary rental spaces Continue to deploy VoIP when units choose it, but, with SIP-based systems (VoIP sets, Softphone, or Analog-Gateways) –RFP for VoIP equipment will allow an upgrade to SIP-based systems instead of current proprietary systems. RFP for software solution (“softphone”) for any users who wish to use it (2,000 stations estimated) In new buildings, deploy VoIP and depending on need either: –Install VoIP sets or –Install Digital/Analog gateways and analog sets Encourage vendors to incorporate more security into VoIP solutions Encourage units to “harden” the campus infrastructure with UPS throughout campus as opportunity exists Wait for the right ROI/functionality/reliability/security combination before legacy conversion

22. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 22 Complete VoIP Conversion - When? Not interested in simply replacing legacy sets w/VoIP sets Major shift is expected with VoIP/wireless capable mobile phones Intriguing story from Verisign

23. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 23 Technology - Future Vision Internet VoIP Server Campus Network Wireless Access Point Cellular & VoIP/WiFi Phone Wireless Access Point Broadband Residence Campus Cellular & VoIP/WiFi Phone The same mobile device will work in a residence to access personal service and on campus to access business service

24. 01001010101001010010110101010100101010100101010111101010101010101011110101000110101000 University of Michigan page 24 Cheers!