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Microsoft’s VoIP server could shake IP PBX market

Sep 01, 20035 mins

While IP PBX vendors duke it out for market share in the converged LAN/WAN arena, a recent analyst report warns not to count out a certain software vendor from Redmond.

A report from IDC identifies Microsoft as a potential force in the enterprise telephony market in the coming years, as the company moves forward with its strategy for converging voice, video and chat applications into its PC and server operating systems, as well as its Office applications. Meanwhile, some voice-over-IP (VoIP) vendors are partnering with Microsoft to make their equipment and applications work together.

“We’re not talking about every Microsoft server potentially becoming a PBX,” says IDC analyst Tom Valovic, who wrote the report on Microsoft and the VoIP market. He says that as Microsoft pushes deeper into the market for collaborative applications – such as software that uses Session Initiation Protocol (SIP) to facilitate multimedia conferences – telecom vendors and IP PBX companies trying to build the same types of systems could butt heads with the software giant.

Many IP PBX vendors, such as Alcatel, Mitel and Nortel, are basing their gear on SIP, which is considered to be the next-generation protocol for voice, video and instant-messaging traffic. In addition to setting up and transporting voice and video calls, the protocol can identify information about clients – whether they’re on a phone, videoconference station or a PDA using e-mail, for example. SIP also brings presence capabilities, letting end users know who’s online when, and how others can be contacted.

For years Microsoft has had computer telephony features embedded in its operating systems in products such as NetMeeting, an H.323-videoconferencing application, and Exchange Conferencing Server, for managing data, voice and videoconferencing.

Windows XP brought along Microsoft Windows Messenger, which turned some heads in the telecom community for its use of SIP.

Speculation about what Microsoft will do in telephony grew when company representatives began showing up at industry events such as Voice on the Net (VON), and later when it announced development of its Real Time Communication (RTC) Server, code-named Greenwich. RTC, renamed Live Communication Server 2003, is due out this fall. The server will act as a control node for managing conferences among SIP clients.

Jasomi to reveal firewall for VoIP

One VoIP equipment vendor getting a jump on the trend is Jasomi Networks, which will debut a product at this month’s VON show in Boston that can enable any standard SIP-based phone to use Microsoft’s Live Communication Server to make a call.

The product, called PeerPoint 3.0, is a network appliance that can act as a firewall for VoIP, helping SIP-based traffic securely traverse corporate firewalls to reach an IP PBX. PeerPoint will help translate the version of SIP used on most industry-standard IP phones into the dialect that Microsoft’s SIP server speaks, according to Jasomi President Dan Freedman. 

Microsoft’s voice lessons

Over the years, Microsoft has developed client and server hardware for running voice and video over IP.

Microsoft debuts NetMeeting as part of its Windows 9x operating system. The software uses an H.323 stack to provide voice and videoconferencing over the Internet.


Microsoft releases Exchange Conferencing Server, its first dedicated server for data, voice and videoconferencing, with support for TAPI 3.0 and H.323. The server is no longer under development and will be replaced by Live Communication Server 2003.


Windows XP is shipped with Microsoft Windows Messenger, the successor to NetMeeting, which is based on SIP, and includes instant messaging, along with voice and video calling features.

2003Microsoft will ship its Live Communication Server 2003 in the fall. The SIP-based communications control server could let users to set up voice, video or chat sessions over a LAN or across the Internet.

Freedman says Microsoft’s SIP is carried over the TCP layer in IP packets, while most SIP implementations use User Datagram Protocol (UDP) as the transport layer. Using TCP lets only Windows Messenger clients, and other SIP clients configured to run SIP on TCP, use a Microsoft SIP server.

While Microsoft Live Communication Server could be configured as a SIP-based call control node, industry watchers say it’s unlikely that Microsoft will get into the enterprise telephony business.

“I don’t see Microsoft selling phones,” IDC’s Valovic says, adding that IP telephony vendors likely will seek partnerships with Microsoft to enhance their offerings.

Avaya, Cisco, Nortel and Siemens all make IP PBXs that run on Microsoft Windows servers. Many vendors also now offer products on platforms such as Linux and Sun’s Solaris, partly in reaction to fears about Microsoft server stability in light of recent Internet worm and virus events.

Siemens recently launched its OpenScape strategy to incorporate SIP-based applications with its line of IP telephony gear. The German PBX maker is partnering with Microsoft to deliver this.

“Our [SIP-based applications] are clearly going to rely on Microsoft Live Communication Server as a platform,” says Mark Straton, marketing vice president for Siemens. While it is foreseeable that Microsoft servers could be put to use as IP PBXs, he does not foresee this as a threat to companies now in the IP PBX market.