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Microsoft and Nortel reunite in telephony

As part of its unified communications strategy, Microsoft has formed a four-year alliance with Nortel. Each company will integrate some of the other's technologies.

Microsoft advanced its plans to bring unified communications to enterprises by expanding its relationship with Nortel Networks in a deal that will see each company integrate some of the other's technologies.

The alliance is a four-year agreement between Nortel and Microsoft in which both companies will collaborate on products for enterprises, mobile and carrier class technologies.

Microsoft CEO Steve Ballmer said the relationship between Microsoft and Nortel goes beyond basic interoperability between the companies' product lines.

"This is about having an aligned offer in the market -- that is our people and the Nortel people in front of customers can demonstrate and communicate a common solutions set," Ballmer said.

The Nortel deal is the latest in a coordinated effort by Microsoft to engage a long list of partners to deliver hardware devices and systems integration to its customers. Other partners named in recent weeks include Polycom Inc., Hewlett-Packard Co., Motorola Inc. and Siemans AG.

"In many large IT shops we will have different people responsible for data networking, for voice or email," Ballmer said. "In some sense, the value proposition in unified communication is so strong for the user that our role is to make the technology implementation easy enough and be part of the galvanizing force in IT shops to make it happen," he said.

Telephony contest on the horizon

"We and Nortel deal every day mostly with different parts of the IT department," he added. For this to come together, not only do we have to talk, but we have to facilitate this discussion with our customers."

As Microsoft looks beyond the IP PBX and into business processes and applications, one expert sees a battle for enterprise telephony shaping up between the software company and Cisco Systems Inc.

"Microsoft is playing nice with telephony vendors," said Irwin Lazar, an analyst at the Burton Group, a Midvale, Utah-based consulting firm. "I think what is more important is what was not announced. Nortel's products that compete directly against Microsoft are not part of the integration plans."

Microsoft had formed a unified communications initiative with Nortel, Intel Corp., and HP in 1999. Since then, the technologies and the market have changed faster than IT management.

Voice over IP is certainly more widespread. Networking market leader Cisco has taken a strong position in VoIP, having gained entry into corporate IT shops after years of fighting entrenched telecommunications providers such as Avaya Corp. and Nortel.

Microsoft needs a telecom partner to reach IT employees who are making the telecom buying decisions. Many IT shops categorize VoIP as networking technology which is procured and managed by networking administrators. They are often not the same as the Windows administrators.

"In some companies the server and the networking people are the same, but it depends on how you are organized," said Andrew Johnson, senior server analyst at TriHealth, a Cincinnati-based hospital corporation with 10,000 employees in 100 locations.

"The only VoIP we use is Cisco, and that's a networking product controlled by our networking group," Johnson added.

At Wake Forest University Baptist Medical Center, there is a separate telecommunications department that buys telephony gear. Wake Forest is an Avaya customer, but there is also Cisco gear installed at one of the hospital research parks.

"It's not up to me to decide whether or not we are going to adopt Microsoft technology for VoIP," said Brian Uzwiak, a network services manager at Wake Forest in Winston-Salem, N.C. "It seems unlikely we would since we already have two VoIP vendors.

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