Last time, we discussed Cisco's Wide Area Application Services announcement and mentioned that this illustrates the escalating battle between Cisco and Microsoft.

To put this into context, in the Dec. 22 newsletter we discussed Cisco's Service-Oriented Network Architecture (SONA). SONA is currently a conceptual framework that is intended to detail how the network becomes increasingly intelligent over time to provide services such as collaboration. However, the inclusion of such functionality into SONA will not be well received by Microsoft. The software giant is also very interested in providing collaboration products and would prefer the network to have somewhat limited intelligence with the majority of the intelligence, and hence the value-add, to be in the desktops and the servers.

Cisco's WAAS announcement represents another attempt to dominate the branch office by leveraging its huge installed base of Integrated Services Routers. As part of its WAAS announcement, Cisco said its vision for the consolidated branch office calls for fewer local servers and no storage or backup capabilities. It is doubtful that that brought smiles to many faces in Redmond.

Microsoft's recently announced alliances indicate that it will not just sit back and watch. In July, Microsoft and Nortel announced a broad unified communications alliance. It will take a while before we will know if this alliance produces any innovative products but in the mean time, it will serve to overhang the market and give current Nortel customers a reason not to switch to Cisco.

Last month, Microsoft and Citrix announced an agreement to co-develop a line of branch office appliances that will combine Microsoft's Internet Security and Acceleration Server with the WANScaler network acceleration technology that Citrix obtained when it acquired Orbital Data. As with the Microsoft-Nortel alliance, it is impossible to know at this time if the Microsoft-Citrix pact will produce any innovative products. However, the partnership is considered by observers to be a move by Microsoft to thwart Cisco's attempt to dominate the branch office.

What is clear through all of this is that the competition between world's leading enterprise network equipment vendor (Cisco) and the world's leading desktop provider (Microsoft) is escalating over the branch office, unified communications, and collaboration. The clash of these titans has the potential to bring some really exciting products to market but it will also put pressure on customers that tend to look to their strategic partners for IT direction.

Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. Jim Metzler is vice president of Ashton, Metzler & Associates.