Microsoft and Nortel Announce Innovative Communications Alliance (ICA)

REDMOND, Wash., July 18, 2006 – Today, Microsoft and Nortel announced an alliance to deliver unified communications to customers worldwide. The two companies will form the Innovative Communications Alliance (ICA), a strategic partnership based on a shared vision for the future of business communications. The companies will collaborate at the technology, marketing and business engagement levels to advance unified communications solutions for customers around the world. PressPass spoke with Jeff Raikes, president of the Microsoft Business Division, about today’s announcement.

PressPass: What is the significance of today’s announcement with Nortel?

Raikes: Unified communications (UC) – the term we use to describe the convergence of all forms of business communications into a single, intelligent and intuitive experience – is a long-term initiative for Microsoft that will involve waves of new products, services and product updates over time. The market for unified communications is just beginning to emerge and we think it’s a big opportunity, upwards of US$40 billion, where software will be a key driver. Core to our strategy is software and our partner channel. We will create a broad software platform and a complete ecosystem including ISVs [independent software vendors], SIs [systems integrators] and telephony-systems partners to deliver for our customers. We’re already working with many great partners in this area including Nortel, but now we are partnering even more deeply with Nortel.

PressPass: How will the two companies partner?

Raikes: Beginning immediately, we will work together with Nortel on research and development. We’ll also forge a joint sales and marketing partnership. And, as they transform their business around the emerging market for unified communications, our mutual customers will benefit from the expert, dedicated systems-integration organization that Nortel will establish.

PressPass: Tell us more about the joint development work.

Raikes: Sure. We will collaborate on product development, spanning enterprise, mobile and wire-line-carrier solutions. In fact, Nortel is going to have development resources co-located with our unified communications team in Redmond. The agreement also includes broad cross-licensing of intellectual property so that UC solutions can benefit from the combined expertise of Microsoft and Nortel. In addition, Nortel will deliver solutions that complement the Microsoft Unified Communications Platform, including enterprise contact-center applications, mission-critical telephony functions, advanced mobility capabilities and data-networking infrastructure.

PressPass: Why is this happening now?

RAIKES: We’re launching this alliance now because the demand from customers for unified communications solutions is starting to grow, and both companies believe we can accelerate delivery of new solutions by working together. Both companies have also spent significant time together in the last 12 months and realize they share the same vision for UC and have complementary assets.

PressPass: What are the business communication trends you’re seeing?

Raikes: Information workers today struggle with too much communication in too many places. They have office numbers, home office numbers, fax numbers, mobile numbers, IM addresses, e-mail addresses, and they want more control over their communications. The workforce is global, it’s moving 24 hours a day, seven days a week, there are many changes in the underlying technology infrastructure for PC-based communications and phone-based communications – with new, IP systems displacing analog systems. Companies really want to derive new value from the infrastructure investments they’re making. So when you think about all of these key trends, both in terms of how people work, as well as the trends in the underlying technology, we think this is a great opportunity for Microsoft to step forward with a software-based solution to put people in control of their communications via unified communications.

PressPass: You spoke recently (in June) about Microsoft’s vision for Unified Communications, but can you summarize that again?

Raikes: Yes. We are taking a software-focused approach to bring together disparate communications technologies into a unified experience – driving down the cost and complexity of communicating and collaborating at work. Most information workers will tell you their PC is their primary communications device today; it’s the first place they look for messages each morning. The desk phone in its current state is lacking as a communications device; and it’s being displaced by the PC. Your desk phone today is pretty much the same desk phone from 10 years ago. By contrast, PC-based communications have improved at a rapid pace. For example, PC software makes it possible to see if someone is available before you send them an IM or an e-mail, what we call “presence,” and calling someone can be as simple as clicking on their name. These are a couple examples of how unified communications can help information workers be in control of their communications. But we also want to embrace the phone and apply software innovation to voice communications through interoperability with phone systems and by making voice a more integrated part of the rich, collaborative experience on the PC. That’s where integration and cooperation with companies like Nortel become so key.