Skype will be thoroughly integrated with Microsoft's Lync communications software, pending regulatory approval.
Lync, which is being sold both as a server product and a cloud-based service, will not lose any prominence in the Microsoft software lineup once Skype comes on board, Ballmer said in a keynote at the Microsoft Worldwide Partner Conference in Los Angeles.
Microsoft Lync: Take to the cloud or keep it in-house?
"With the combination of the power of Lync and Skype under the same umbrella, we think we're going to be able to do even more fantastic things together," Ballmer said.
Small businesses and enterprises deploying Lync will gain a secure form of communication with consumers and businesses because of integration between Lync and Skype, the latter of which offers Internet-based chats and voice and video calls, he said.
"I've been asked by partners if this Skype acquisition somehow means we're not serious or enthusiastic about Lync," Ballmer said. "Quite to the contrary. One of the great motivations in acquiring Skype is to enable the enterprise to have all the control it wants in communication and collaboration through Active Directory and Lync, and yet be able to connect people within enterprises to consumers, businesses and trading partners around the world. Lync, in some sense with Skype is a strategy that will allow the consumerization of IT to really proceed with full vim and vigor."
Microsoft's purchase of Skype is still waiting for regulatory approval, so the integration between Lync and Skype can't happen yet.
"Just like with any big acquisition, we have contact with Skype, certainly," Kirk Gregersen, Lync senior director, told Network World in an interview after Ballmer's speech. "We just can't start the integration until regulators have approved things."
Gregersen says he's not a Skype user himself, but that "for a lot of people there is obviously great value, for the 600 million Skype users out there. As Steve said, connecting all these people is great value both for the enterprise customers and those consumers out there."
Lync Server is positioned as a replacement for legacy PBX phone systems, and Ballmer praised the product's momentum. Lync provides "eye candy" to enterprise customers just as Xbox Kinect does to the consumer market, he said.
"Seventy percent of the Fortune 500 is now on Lync," Ballmer said. "Certainly if you look at a product from Microsoft that is growing most quickly, it is Lync in the enterprise."
While the exact nature of Skype's future integration with Lync remains unclear, there is also uncertainty over when the cloud-based version of Lync will become as robust as its on-premises sibling.
Lync Online, part of Office 365, is not yet a full PBX replacement, Microsoft acknowledges. The company's advice for Office 365 customers who want a robust unified communications platform is to deploy Lync Server within their own networks.
Lync provides three types of workloads: messaging and presence, conferencing, and voice, says Ashima Singhal, Lync group product manager. Lync Online users get the same IM, presence, and audio, video and Web conferencing capabilities - including desktop sharing - as customers who deploy Lync in-house, but the cloud-based voice capabilities are not as robust, she says.
Specifically, Lync Online offers PC-to-PC voice and video calling, but not the ability to call landlines and cell phones.
Microsoft has partnerships to bring the ability to call regular phone numbers to customers in the United States and United Kingdom later this year, Gregersen said. But Lync Online still won't be considered a full PBX-replacement for "quite some time," certainly not in 2011, he said.
"For full PBX enterprise-level telephony capabilities, we're going to add more and more functionality over time, but there's a whole level of on-premises integration with legacy infrastructure, gateways, the old PBXs, IP phones, you name it, that we probably won't have in the cloud for quite some time."
Branch office support and 911 capabilities are also challenges for Lync in the cloud, he said.
"Most customers we're seeing are still wanting to manage telephony on-premises," he said. "There is so much on-premises legacy equipment, that to open up the cloud to all of that, plus manage devices on-premise, it's a challenging thing in the cloud environment."
However, small customers that lack a robust unified communications platform may find Lync Online a step up. Although Lync Online clearly lags Exchange and SharePoint Online, the existence of Lync Online still benefits Microsoft and customers, Gregersen said.
"For us, Office 365 will get Lync in front of a whole new set of customers that we've never really marketed to," he said.
One other tidbit: Gregerson said Lync clients for Windows Phone 7, iPhone and Android are coming later this year, a significant move given that most of Microsoft's mobile productivity tools are for Windows phones only. (See also: Microsoft's aversion to iOS and Android gives QuickOffice.)