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Microsoft's OCS changing the face of VoIP?

Microsoft's OCS is set to debut in October. The OCS platform promises to transform the VoIP industry by making VoIP a real application and embedding communications into everything we do.

Microsoft has set Oct. 16 in San Francisco as the date and venue for the debutante ball of Office Communication Server (OCS). Microsoft's entry into the world of VoIP and unified communications (UC) will help realize the promise of "VoIP as an application" as it pulls the software community into a market that has historically been siloed.

It's been a little over a year since Microsoft first announced its vision for UC and VoIP and gave us a peek at the OCS product that would be its platform for delivering the solution. Over the past year, there has been a tremendous amount of speculation -- positive and negative -- about the quality of product and the impact Microsoft may have on the industry.

Well, we're inside a month from OCS's Bill Gates-led cotillion and Microsoft's official launch into the world of telephony and communications. As an analyst, I've spent a great deal of time over the last year doing research around the topic of Microsoft in this market, and here's the impact I think the company will have:

Microsoft will be a significant force in this market.
I'd estimate that 90% of the inquiries I get in this market are focused on Cisco and Microsoft and comparing the two products. The other 10% are generally focused on how other vendors will integrate into Cisco and/or Microsoft.

Microsoft will redefine the industry.
Microsoft did not develop OCS to sell you an IP-based phone system. OCS will take communications from being a product to an embedded component of everything we do. To help you understand this, think of the browser. Netscape sold you a browser; Microsoft built browser functionality into everything it made. Today, there isn't an application developed without consideration of the browser. Similarly, down the road, we won't be building applications without considering how communications and messaging integrate into them.

The independent software vendor (ISV) community will become interested in communications.
Microsoft will push OCS capabilities into its huge developer community, allowing software vendors to communications-enable traditional desktop applications. This will be Microsoft's big advantage in the market: The ISV community will create product pull-through, as that community does for products like Office and Exchange today.

OCS will pull more groups into the decision process.
For those of you on the network and telecom side, this is a very important point to keep in mind. Many of the discussions I have with enterprises involve more than just the network and telecom managers. If Microsoft has been to that account, the desktop manager is often involved. In addition, I've spoken with Exchange administrators, SharePoint buyers and many CIOs who wind up being referees for the various groups.

The traditional telephony industry will continue its attrition and consolidation.
When phone systems were sold as standalone platforms, there were half a dozen major vendors and a handful of smaller, regional vendors. Along came VoIP, and that introduced the industry to Cisco -- and to a lesser extent to 3Com (which actually had the early lead at one time), ShoreTel and other VoIP pure plays. The software phase will bring Microsoft, IBM and other non-traditional vendors into the market as well. Today, we have way too many vendors. We have seen a little consolidation, with NEC acquiring Sphere and Mitel acquiring InterTel, but we currently have far too many voice vendors. Over the next few years, the market will undergo a reduction in the number of vendors through acquisition activity, but Darwin needs to take over here and have some of the weaker vendors die.

Cisco customers will benefit.
If you look across Cisco's market, there is really no true competitor for its entire product line. In fact, few vendors compete with Cisco in more than one market category, and the majority of competitors are small (compared with Cisco). The 800-pound gorilla can just outrun and outgun its smaller competitors. However, Microsoft is a vendor that can keep up and reach many buyers to which Cisco does not have access. Over the past year, Cisco has talked much more about "being open," "federation" and other things that only benefit the customer more. Customers that run Cisco should expect to see more innovation and more willingness on Cisco's part to integrate with other third-party companies, including Microsoft.

As I stated already, Microsoft's impact on the VoIP industry will be significant from both a competitive position and from the standpoint of taking communications down the right path. Our research shows that over 80% of organizations have at least tested VoIP, but under 10% have it deployed across the organization. Why? Because, for the most part, VoIP is just a cheaper version of the old stuff, and the majority of companies that deploy it do not really change what they do.

For companies planning to test OCS, I do think there will be some quality issues as the product matures, but you need to understand that OCS isn't designed to be a phone system replacement. It's meant to be part of an ecosystem that includes Exchange, SharePoint and Dynamics, where communications become as important to your organization as the Internet did.

About the author:
Zeus Kerravala manages Yankee Group's infrastructure research and consulting. His areas of expertise involve working with customers to solve their business issues through the deployment of infrastructure technology solutions, including switching, routing, network management, voice solutions and VPNs.

Before joining Yankee Group, Kerravala was a senior engineer and technical project manager for Greenwich Technology Partners, a leading network infrastructure and engineering consulting firm. Prior to that, he was a vice president of IT for Ferris, Baker Watts, a mid-Atlantic based brokerage firm, acting as both a lead engineer and project manager deploying corporate-wide technical solutions to support the firm's business units. Kerravala's first task at FBW was to roll out a new frame relay infrastructure with connections to branch offices, service providers, vendors and the stock exchange. Kerravala was also an engineer and technical project manager for Alex. Brown & Sons, responsible for the technology related to the equity trading desks.

Kerravala obtained a B.S. degree in physics and mathematics from the University of Victoria (Canada). He is also certified by Citrix and NetScout.

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