Microsoft Joins with Nortel to Sell Businesses on VoIP Phone Systems
Microsoft CEO Steve Ballmer on Tuesday heralded a new strategic alliance with telecom equipment maker Nortel, formed to pursue an ambitious goal.
Microsoft and Nortel aim to get companies to replace their old land-line phones with voice over Internet protocol (VoIP) systems -- and do it fast, Ballmer said in an interview.
Ballmer predicted that corporations will swap at least half their analog phones for VoIP connections within five years. "I actually believe it'll be quite a bit higher than that. But, hey, that's me," Ballmer told USA TODAY.
VoIP allows calls over computer networks, eliminating the behind-the-scenes differences between computer and phone networks. Microsoft and Nortel plan to develop and sell VoIP systems for businesses that integrate calls with e-mail, instant messaging and video conferencing. (Unlike some consumer VoIP offerings, the calls typically would travel over special corporate networks, not the public Internet.)
Nortel CEO Mike Zafirovski told reporters that the partnership "fundamentally changes the voice communications landscape with a software-based approach."
The alliance rounds out Microsoft's strategy to promote wider use of collaborative software tools and Web services, based on its flagship Windows computer operating system and Office software suite.
Tech and telecom analysts pointed to several hurdles the new partners must clear, including:
*Reliability. Workers are accustomed to phones that work 99% of the time. PCs, however, can be turned off, and programs often crash. "People expect the phone to work every time, and that currently isn't one of Microsoft's strengths," says Rob Enderle, principal analyst at Enderle Group.
Ballmer said wide use of less reliable cellphones proves VoIP can catch on, "if we can offer a superior experience to the user."
*Compatibility. Many corporations are reluctant to replace land-line phones that still work well. Meanwhile, early adopters of VoIP systems will likely encounter glitches trying to connect to different land-line systems. "A lot of integration challenges have to be resolved," says Directions on Microsoft tech analyst Pete Pawlak.
*Competition. Cisco Systems, the No.1 maker of computer networking gear, has plunged into office telephone networks, selling about 6 million VoIP phones.
Meanwhile, Alcatel and Lucent Technologies, telecom equipment giants in the middle of a merger, are expected to accelerate marketing of their VoIP systems.
Contributing: Michelle Kessler from San Francisco
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