VoIP Toolkit

Microsoft's Nortel alliance challenges Cisco

Marguerite Reardon CNET News.com

Published: 19 Jul 2006 09:05 BST

…will integrate with Microsoft's Office Communicator 2005 and Office Live Communications, allowing users to launch a VoIP conversation directly from their Microsoft Outlook client. The interoperable package should be available in August 2006, the companies said.

Interoperability and competitive advantage
Microsoft is working in a similar way with other IP communications providers, such as Avaya, Alcatel and Siemens. But Ballmer said the alliance with Nortel is different from these other efforts.

"This announcement is not about interoperability alone," Ballmer said. "This is about having an aligned offering and salespeople from Microsoft and Nortel in front of customers every day to talk about our common solution set based on our unified communications platform and extending to the advanced applications that Nortel builds."

For the time being, Cisco seems to be taking the assault in its stride.

"Cisco and Microsoft have a strong track record of collaboration around our respective products and technologies," a representative said in a statement. "And we continue to look for opportunities to build on these successful initiatives, and to new collaboration and integration points moving forward."

Just before Microsoft announced its strategy for unified communications last month, Cisco’s chief executive John Chambers told reporters at a press conference in Las Vegas that he doesn't see Microsoft as a direct competitor.

"I think unified communications will be enabled by the network," Chambers said. "But it brings together different elements, and it will require Microsoft and Cisco and others to work together. It's in our customers' best interest for us all to work together."

Still, analysts believe that Microsoft's alliance with Nortel will clearly put the two companies at odds with each other. Even though Nortel has trailed Cisco and Avaya in the IP telephony market, its voice and networking expertise, in combination with Microsoft's software expertise and customer base, puts the companies in a strong position to cause trouble for Cisco.

"I think this could delay adoption in the VoIP market for companies that are just now considering switching their phones to IP," said Yankee's Kerravala. "There could be a lot of customers who will just wait to see what Microsoft will come out with in 2007."