Newsmaker: Microsoft turns to telephony

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How do you see this stacking up with what Cisco is doing? Because, you know, obviously right now in terms of IP communications, they're the leader. So how is this different from what they're doing?
Raikes: Well, with all due respect, it isn't just about Cisco. It's about how the industry gets transformed by having a broadly accepted platform. It's a little bit like in 1990 when enterprise computing had vertically integrated stacks from HP, IBM, Digital Equipment Corporation. The point is that enterprise computing got transformed by those vertically integrated stacks going horizontal, by having competition on the horizontal layers.

You'll see the same type of transformation in the next three to five years in the voice communications, unified communications area. What you'll see is the industry as a whole move more towards a broadly accepted software platform as opposed to proprietary stacks from individual vendors. That's why (telecommunications equipment maker) Nortel (Networks) has become such an important partner, because they recognize that transformation is under way and so they've decided to team up with us, and we expect that other partners will team up as well.

How much of the initial challenge for you guys is going to be a sales challenge? A lot of companies have not only just different infrastructure but different people responsible for telephony and IT infrastructure. How much of this is a sales challenge of, it's not the IT people that buy the phone system?
Raikes: It's one of those things that will characterize the transformation over the next three to five years. I mean, we're already seeing IT organizations begin to restructure, where they have a merger of the people who do telephony and networking. So we're already seeing this transformation today. We're already seeing how customers are restructuring their IT decision making, in some cases their IT departments. They're looking at the opportunity to bring together voice with the office productivity infrastructure. You end up with a lot more value, a lot more capability, at half or less of the cost.

Where does mobile come into this? Is this application already available on mobile handsets, or is that coming in the future?
Raikes: Yes, we already today offer Communicator Mobile on Windows Mobile devices. Again, in the same way we're taking the next step with voice in this release, that also includes what we're doing with Communicator Mobile. So you won't have to be tied to a specific vendor like Nokia. You can have a Windows Mobile device from many vendors, and be able to take advantage of these capabilities. That I think is, again, a significant difference from today's industry structure, where you tend to have the proprietary stacks of the existing players.

In this next generation you'll be able to initiate voice calls, and over time of course mobile devices will improve, where they will have a much better, more-resilient Wi-Fi, with the ability to have coexistence of the data and the voice channels. So we expect mobile devices to be extremely important, and this will be one of the key points I make about our investment in unified communications next week--the extensive investment we're making in mobility and mobile devices.

We've heard from other companies, including one that I think you guys may well be talking to, this idea that you start a voice call and you get data back. How important is that, and is it true that you guys have had talks with Tellme?
Raikes: So the key point I would make is that we think very broadly about the impact that voice--voice over IP, voice recognition--is going to play in the infrastructure, and we have a lot of investments. We of course don't speculate or comment on discussions with other companies. We have lots of discussions with partners all the time.

I'm wondering if it's come up with you guys in talking to customers: people expect (voice systems) to be ironclad. They want to pick up the phone and they want to get a dial tone every time. They don't want their call to be cut off because their computer is rebooting.
Raikes: You're absolutely right about the importance of reliability and quality. I would say that those are two things that really define being in the game on voice communications. The second thing is, our approach is really ideal for a couple of reasons in this regard. One is we have the ability to sit alongside the existing infrastructure, and that makes it possible for people to begin to take advantage of these capabilities, and they have all of the security blanket, so to speak, of the existing infrastructure. It also means that they can take advantage of what they have.

Which type of gear did you use for this call?
Raikes: For this one I used the PBX, the existing PBX phone.

Do you make a lot of VoIP calls these days, or is it still mostly PBX when you're using the phone?
Raikes: To date, for me mostly PBX, for (unified messaging vice president) Gurdeep Singh Pall, a lot more--at least more than me--in terms of the voice over IP calls.

More Newsmakers

[LarryLo]

What market do they think they're going after?

They are a little late to the party and they brought an ugly date.

Between Cisco and Avaya ruling the commercial IP Telephony landscape and openpbx / Asterisk playing in the Open source space, I am curious to see where they will position their products. What's the compelling reason to buy MS/Nortel?

Most of the fortune 1000 crowd has started the conversion to IP Telephony and picked a vendor. I am curious who MS thinks will buy their offering?

I think Nortel last bastion is Government and military and I can just see the conversation as Nortel tries to sell them on MS' stability and security ;)

[Stating]

Midsize, Small Bus?

There are a lot of midsize and small businesses already running Windows 2003/SBS that don't have VoIP, so perhaps that is one target market. It's a way for MS to sell 2x more server licenses, because they will require that you run their communications server on a dedicated box. Still, given MS poor security record, I'd rather run my communications server on a non-MS platform. It's not hard to provide MS Office add-ins that give you click and call. Skype already offers a click-call add-in for MS Outlook, as do others.