Nortel/Microsoft Partnership: What Does it Mean for You?

News this week that Microsoft Corp. and Nortel are embarking on a strategic alliance to jointly develop and market unified communications technologies is good for both vendors, and could have positive impacts for users as well. The goal, according to the companies, is to turn traditional business telephones into software applications, utilizing Microsoft’s unified communications (UC) software platform (i.e., Live Communications Server) and Nortel’s existing software tools to deliver enterprise-grade telephony capabilities.

As part of the four-year agreement, the two companies will go to market with the Innovative Communications Alliance, and Nortel will serve as Microsoft’s strategic partner for unified communications. The companies will jointly develop new products, including contact-center applications, advanced mobility features, and data-networking infrastructure. They will share intellectual property, and jointly market and sell the resulting solutions. They will also deploy each other’s technologies within their own organizations.  So, what's the impact?

The benefits to Nortel are clear: The ability to piggyback on Microsoft’s considerable sales channel and marketing muscle, as well as potentially capture many millions of dollars in professional services as companies struggle to deploy integrated, interoperable unified communications throughout the enterprise. It also positions the vendor ahead of other telephony players, including Cisco, which only recently got on the UC bandwagon (with its own, less meaningful partnership with Microsoft). That said, Nortel will have to capitalize on its opportunity in a way that an earlier Microsoft partner, Siemens, did not.

Microsoft, meanwhile, gets immediate expertise in telephony and related security and scalability issues—something it needs if it wants to convince IT executives to trust Redmond with their mission-critical business telephone systems. Interestingly, the software expert also will be able to tap into Nortel’s considerable applications experience in this space—Nortel’s MCS 5100 is arguably the most mature unified communications application on the market today.

The real questions is what this means for users. Theoretically, at least, the combined power of the two companies should strengthen and speed the development of new and more robust unified communications products, especially all-in-one applications that incorporate chat, calling, conferencing, and video, all powered by presence. But doubling the development efforts can also double the development roadblocks, so the companies will need to take care to ensure progress is real.

What’s more, they will still need to focus on open applications that support SIP and SIMPLE, so as not to exclude all those companies that don’t use both Microsoft and Nortel for their communications needs. (This affects Microsoft more than Nortel—more Microsoft shops use Cisco, Avaya, etc. than Nortel shops use IBM Lotus.) Also, over the past year Microsoft has partnered with any number of other telephony vendors, and it’s unclear what this most recent news means for those integration and support efforts.