Cost Comparison of Web Collaboration

DUMBO Company (a fictitious company) needed to cut travel costs and productivity losses (wasted time) but still maintain the benefits of person-to-person collaboration. One option was Web conferencing, which could be used internally for collaboration and externally for sales demonstrations to customers in geographically dispersed areas. The company's CFO, Eileen Griffin, decided to invest in one of the large vendors' Web meeting software, either on a pay-per-use basis or per a user licensing plan based on the number of seats or participants. Griffin estimated that Web conferencing cost estimates should be based on the following:

• Approximately 1,000 meetings per year (based on approximately 3 meetings per week)

• An average of 8 participants per meeting

• Each meeting lasting about one hour, which takes into consideration the need to get the meeting set up at least 15 minutes in advance and 45-minute meetings

• 300 unique participants, consisting of 100 employees and 200 customers

Griffin wants you to research and develop a spreadsheet comparing the pay-per-use basis vs. buying seats (licenses) for Microsoft's LiveMeeting and Cisco's WebEx. Precise cost comparisons are difficult because there are so many variables, but a basic cost analysis between LiveMeeting and WebEx is feasible. Using a spreadsheet, perform the following calculations. Visit the book's Web site to download the spreadsheet to help with your analysis.