Managing Information Technology

Case Study I-2 • VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier 137

relocation. With this information, VoIP2.biz engineers would
prepare an initial statement of work, and then a prospect pro-
posal would be presented. Experience had taught Milkowski
that the prospect would want to see a demonstration and
experience VoIP2.biz’s service so the plan called for sales
personnel to install a demonstration phone at the client site.
Once the business deal is closed, the plan called for
VoIP2.biz engineers to follow a structured implementation
process to complete station reviews, specify a dial plan and
voice processing applications, build the appropriate IP

PBX system software, order and install the necessary

equipment, and complete customer training and cutover to

the new system.

The plan called for billing activities to be triggered at

both the installation of network facilities and at system

installation time.

VoIP2.biz planned to provide post-installation support

through its technical support center, which had been out-

sourced to HSC’s technical support center team. VoIP2.biz

managed its own network operations center (NOC).

System Configurations Stations

16 32 64 128

Processors Single Single Single Dual

Margin

Revenue

Nonrecurring Charges (NRC)

System 40% $ 2,907 $ 4,247 $ 5,704 $ 8,533

Implementation 50% $ 2,200 $ 2,200 $ 3,400 $ 7,000

Network 20% $ 300 $ 300 $ 600 $ 900

Sets 30% $ 4,606 $ 9,211 $ 18,423 $ 36,846

Annual Recurring

Software Fee $ 1,800 $ 1,800 $ 3,600 $ 6,000

User Support Fees $ 67 $ 134 $ 269 $ 538

Monthly Recurring – annualized

Network 20% $ 3,600 $ 3,600 $ 7,200 $ 10,800

DIDs 80% $ 1,920 $ 3,840 $ 7,680 $ 15,360

LD 58% $ 1,114 $ 2,227 $ 4,454 $ 8,909

Costs

System $ 1,980 $ 2,870 $ 3,830 $ 5,720

Implementation $ 653 $ 1,057 $ 2,113 $ 3,627

Network $ 2,880 $ 2,880 $ 5,760 $ 8,640

DIDs $ 384 $ 768 $ 1,536 $ 3,072

Sets $ 3,224 $ 6,448 $ 12,896 $ 25,792

LD $ 472 $ 945 $ 1,889 $ 3,779

Margin

NRC $ 3,705 $ 5,622 $ 9,629 $ $18,147

Recurring $ 4,123 $ 5,726 $ 11,453 $ 20,986

System Margin % 48% 45% 44% 46%

LD $ 641 $ 1,283 $ 2,565 $ 5,130

LD Margin % 58% 58% 58% 58%

First 12 months revenue $ 18,514 $ 27,560 $ 51,330 $ 94,885

First 12 months margin $ 8,469 $ 12,631 $ 23,647 $ 44,263

Second 12 months margin $ 4,764 $ 7,009 $ 14,018 $ 26,116