Calculating Total Cost of Asterisk Ownership

Asterisk is distributed as free, open source software. The only costs involved with Asterisk are hardware, right? Well, maybe not.

As we have been discussing, Asterisk is very flexible. Determining how to use the flexibility in the best way can quickly become a huge time sink. Compatible handsets are also not free. If we are going to use the G.729 protocol, which compresses VoIP traffic by a factor of eight while maintaining excellent voice quality, we will also have to pay licensing fees.

With commercial phone systems, the costs are typically higher than with Asterisk. However, they are a fixed, known constant. Depending on the way we use Asterisk, costs can vary greatly.

The total cost of owning Asterisk can also include downtime. If we choose to support Asterisk on our own, and have to work to try to get Asterisk back up after a failure, there is an opportunity cost involved in the calls we should have received. This is why we should choose to support our phone system internally only if we have the appropriate resources to back that up.

Total Cost of Ownership (TCO) is not an easy calculation to make. It involves assumptions of how many times it will break, how long it will take us to get it up and running, and how much the consultants will charge us if we hire their services.

TCO is useful only when comparing phone systems to each other. The following elements should be included when comparing TCO of multiple phone systems:

• Procurement cost: This is the cost to buy the PBX. In the case of Asterisk, it is only the cost of the hardware; other systems will include an element of licensing.
• Installation cost: This is the cost to configure and deploy the PBX. Some companies choose to do the deployment in-house. In such instances, there is still a cost, and to enable fair comparisons it should be included.
• Licensing cost (one-time): This is the cost of any one-time licensing fees. Some PBX systems will require a license to perform administration, maintenance, connection to a Primary Rate ISDN line (PRI), and so on. In Asterisk, this would include the G.729 licensing cost, if required.
• Annual support cost: This is the estimated cost of ongoing maintenance. Of course some assumptions will have to be made. In order to keep the comparison fair, the same assumptions should be carried over between vendors.
• Annual licensing cost: Some phone systems will have an annual cost to license the software on the handsets as well as a license to be able to connect those handsets to the PBX.

When we have created the table, we can calculate the TCO for one year, two years, and so on. We can then evaluate our business and decide what costs we're willing to incur for our phone system.