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November 16, 2005

Microsoft VoIP strategy still under the radar

In a great piece at Business Week, it is speculated that increasing competitive strains between Microsoft and Cisco may result in Redmond attempting a power-grab at the enterprise VoIP market, which is currently dominated by Cisco phones, softswitches, and network switches.

Now I don’t have it on good authority that Microsoft has any real ability to vend realtime communications services, including VoIP solutions. My chief reason for saying this is that Microsoft  does not have a platform that gives them a competitive advantage. The Windows platform may be good for a number of things, but realtime applications isn’t one of them. Singularity, on the other hand—somebody with a realtime computing background, tell me if this has any promise for IP telephony?

But I’ve also heard it said that Microsoft would love to develop a “Telephony Services” edition of Windows, aimed at gearmakers like Avaya and NEC. (I can’t help but giggle at the potential name of such a product: “Microsoft Phone System 1.0” or “pb-X-box” etc.)  That is consistent with Nortel’s change in strategy, moving to a more software-dominated mindset.  But, knowing what I know about the telecom industry, I doubt Microsoft is going to have an easy time convincing big hardware players like Avaya to scrap ten years of hardcore, highly-refined IP telephony investments just to slap a label on their PBX that says, “Designed for Windows Telephony”.   Yeah, right.

That said, I do believe Microsoft is cooking up yet another services framework, this time for media applications like telephony—and I suspect it will be bundled with related frameworks that work a lot better together than they do apart, a la BackOffice or Small Business Server or IIS with Sharepoint.   Not “Microsoft Phone System” per se, but maybe a plug-in architecture for Live Communications Server, or perhaps, yes, even a very-much overhauled realtime media oriented version of Windows.

Getting back to the Cisco vs. Microsoft angle, here’s a quote from the BW piece:

VoIP CONNECTION.  “In spite of a lot of analyst commentary, I’ve seen more meat to our collaboration in the last few years,” says Scheinman. “Microsoft is dealing with the impact of the Internet revolution. Our hope and our goal is to work with them, to create opportunity for both of us.”

Wishful thinking? Many observers believe so. Take the burgeoning VoIP market, which is revolutionizing the way businesses and consumers communicate. Cisco is a market leader in selling entire systems — right down to VoIP handsets — to corporations.

Its Linksys division is the leading provider of routers that create wireless home networks and adapters that let conventional phones make calls via the Net. That makes Cisco a leading supplier of gear that works with services offered by Vonage and others, which allow users to talk to one another via broadband lines — a territory largely outside of Microsoft’s traditional competency of desktops and servers.

WINDOWS CALLING.  The market for VoIP phones and equipment is expected to rise to $1 billion in 2009, from $194 million this year, according to WinterGreen Research. Microsoft aims for as big a slice as possible. Microsoft bought one VoIP company, Teleo, in August, and another, media-streams.com, in November. “There’s not a market that’s safe from Microsoft,” says Jeff Pulver, one of the leading authorities in VoIP.

In October, Redmond released a Beta version of its Communicator for souped-up cell phones and personal digital assistants (PDAs). Due for release in 2006, the Communicator Mobile will allow users to make VoIP calls over their wireless handsets. And Microsoft plans to embed “call-manager” software directly into it next version of Windows, dubbed Vista, in late 2006. “That could make the Windows PC into the best telephone in the world,” capable of both displaying your contacts and allowing you to easily reach them all at once, says Frank Dzubeck, president of Communications Network Architects.

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Posted by dymaxion at November 16, 2005 09:27 PM


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