Microsoft, Nortel Link Arms On Video, Voice, Messaging Strategy - InformationWeek

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7/18/2006
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Microsoft, Nortel Link Arms On Video, Voice, Messaging Strategy

Microsoft desperately needs agreements with telephony vendors like Nortel to get its communications software into offices everywhere.

Just a month after announcing its product roadmap and grand vision for integrated video, messaging, and voice communications, Microsoft took another step into unified communications by announcing a four-year strategic alliance with networking equipment maker Nortel Networks.

The cooperation between the two companies will be extensive and the alliance could be renewed even after the four years is up. Nortel will bundle Microsoft's unified communications software into its phone systems and the two will work together to co-develop communications software with advanced functionality. They'll also develop a joint channel ecosystem, work together on marketing, and cross-license intellectual property.

The two companies say their work will accelerate the development of collaborative applications that increase productivity by making it easier to reach co-workers and partners whenever and wherever they're needed.

Microsoft desperately needs agreements with telephony vendors like Nortel to get its communications software onto their hardware and into offices everywhere and make inroads against software developed by Nortel, Avaya, and Cisco themselves. A flurry of partnerships were on the table when Microsoft first discussed its unified communications roadmap in early June, but none were as complete as this one. Nortel brings an expertise in back-end IP-based telephony infrastructure and standards like Session Initiation Protocol that Microsoft doesn't necessarily have in-house.

The deal further raises the stakes between Cisco and Microsoft, the two companies that have been most vocal about unified communications and that are best positioned to become leaders when the nascent market begins to take off.

Nortel has been working through continued struggles after an accounting debacle; new CEO Mike Zafirovski has started repositioning the company, announcing a $1.8 billion research and development plan, hiring a new CTO and pushing an IP telephony initiative. The high-profile Microsoft agreement bolsters Nortel's unified communications play, and puts its strategy squarely in line with other telephony competitors like Cisco and Avaya. Nortel believes the partnership could bring it more than $1 billion in benefits.

It's not the first time Nortel and Microsoft have created an IP communications agreement. Last month, LG-Nortel, the Korean-based joint venture of LG Electronics and Nortel, joined hands with Microsoft by announcing the two would work together on a new desktop phone and Windows CE-based communication devices.

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