Microsoft last week climbed into bed with Cisco’s largest competitor, Nortel, as it continues to battle Cisco for dominance in the emerging unified-communications market.
In a multifaceted deal, Microsoft and Nortel formed the Innovative Communications Alliance and committed to develop and sell unified communications products jointly. Although details were light, the companies said the four-year agreement calls for cross-licensing technology and forming a Nortel systems integration division to support the partnership.
Early development efforts will focus on integrating Nortel’s VoIP products with Microsoft’s client software. Nortel CEO Mike Zafirovski says he expects the deal will let Nortel generate $1 billion in new revenue through 2009.
Microsoft’s battle with Cisco has been becoming progressively more pronounced. Last March Cisco put the companies on a collision course when it announced the Unified Presence Server and Unified Personal Communicator client software, which are analogous to Microsoft Live Communication Server and the Microsoft Office Communicator client. Cisco also released CallManager 5.0 – the heart and soul of the company’s key VoIP product – and offered it on Linux. This is the first time CallManager has been available on anything but Windows.
In addition, just last month Microsoft announced a broad unified-communications strategy that hinted at IP PBX features Microsoft needs a telephone partner, however, and it didn’t have to look far to find a suitable alternative to Cisco. Nortel is in desperate need of some fresh direction.
Like other VoIP players, Nortel is looking to make its IP PBX a software-only product; it can’t hurt to team with Microsoft on that. Nortel’s plan is to deliver telephony features as software modules that can be used with Microsoft’s unified communications software platform.
Although vendor partnerships rarely deliver what is promised upfront, one reason to believe this one will be different is the competitive forces at work. Given the increasingly combative relationship between Microsoft and Cisco, the Redmond giant has real incentive to see this through.
Certainly Nortel also has something to gain. This relationship is deeper than those Microsoft has with other IP PBX vendors – which tend to deal with product integration and distribution – and should be significant in Nortel’s efforts to expand its core VoIP business. Gaining access to all those Microsoft desktops will be a huge win.
Then there is the big “but”: Regardless of motivation and intention, Microsoft can’t get around the fact that Cisco owns a staggering percentage of the enterprise infrastructure market. Partnering with Cisco competitors can do only so much.
