Q&A: Microsoft’s Unified Communications Strategy and Solutions

REDMOND, Wash., June 25, 2006 – This week Microsoft details its vision for unified communications, and announces new partnerships and new 2007 Microsoft Office system products that are designed to deliver an integrated voice, conferencing, IM and collaboration experience for business customers.

PressPass spoke with Jeff Raikes, president of the Microsoft Business Division, about this week’s announcements.

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

Jeff Raikes, President, Microsoft Business Division

Raikes: Well, certainly it’s clear that many information workers 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: How does Microsoft’s unified communications strategy address these business and industry needs?

Raikes: 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.

PressPass: What do this week’s announcements mean for the Microsoft Business Division?

Raikes: This week’s announcements are a great example of how the Microsoft Business Division has expanded its view of enhancing information work. Of course, the core of our business has been the Microsoft Office productivity suite, but we’ve expanded and transformed the business to include the client applications, server capabilities and software service capabilities, and to be a platform for solutions.

And as part of that, we’ve invested in new areas like business intelligence, software-as-a-service with Office Live, and collaboration technologies. Today’s unified communications announcements are a great example of how we are undertaking the broadest opportunity to help business customers improve the productivity of information workers.

PressPass: What do you see as Microsoft’s role in the communications industry and what market opportunity exists?

Raikes: We believe that Microsoft will play a very important role as the software leader for the unified communications market, but, of course, this will be in the context of working with a wide range of industry partners, a broad ecosystem that will help customers realize the vision for unified communications. To realize the potential, these solutions will need to work across networks (corporate networks, cellular networks, etc.) and across devices (desk phones, mobile devices and PCs). You’ll see companies apply their unique expertise and partner to deliver the best experience. We’ll apply our expertise – software and software platforms. The current release of Microsoft Live Communications Server has already been embraced by telephony partners as an ideal “hub” for unified communications. We’ll continue to build on that momentum with the next release, which we’re announcing today – it’s now called Microsoft Office Communications Server – and expect to deliver next year. The market for unified communications is just emerging, we think it’s a big opportunity, upwards of US$40 billion, and software will be a key driver.

PressPass: How does Microsoft see business communications evolving in the future?

Raikes: Certainly we believe that IP-based systems will displace analog systems, and that companies will want to derive new value from those investments. We think the opportunity to have Web, audio and videoconferencing integrated in an intuitive way is exciting, and new devices like our RoundTable device will provide an immersive conferencing experience that extends the meeting environment across multiple locations. We’ll see advances in business phone hardware, and a new class of voice over IP phones will emerge that are both lower cost and much richer in their capabilities compared to today’s typical business desktop phone. So there will be a wide range of technologies coming together to make it possible to improve the way we communicate and put people in control of their communications.

PressPass: What opportunities will today’s announcements create for your partner ecosystem?

Raikes: As I mentioned, there already are a wide range partnerships in place, and we see that increasing. For example, today we’re announcing the development of what we call the Communicator phone experience, a new generation of innovative IP phones that manufacturer partners, including LG Nortel, Polycom & Thompson, plan to build. We’re also really excited to work with Motorola to extend the unified communications experience to smart mobile devices. And, of course, systems integrators like HP are very interested servicing this new market throughout the world. So, there will be a broad ecosystem to deliver on this vision for the customer, and today’s announcements clearly demonstrate that.

PressPass: How do today’s announcements help bridge the digital work style with the digital lifestyle?

RAIKES: While many people would think of the digital lifestyle and digital work style as being two separate domains of our lives, I think we’ve all come to see that with the expansion of communications in particular, people are much more fluid; you know, there are times when you’re working but you need to be in touch with your family, and there are times when you’re with your family and you need to be in touch with work.

And so the line, so to speak, between digital lifestyle and digital work style is really quite a gray line; in fact, it may not exist at all. This is one of the most important elements of our unified communications’ vision. In that context people really want to be in control of their communications, they want to have much better ability to indicate who they want to communicate with, when they want to communicate with them, know whether they’re available, what’s the best way to communicate with them, and that’s the focus of our software, is to put people in control of their communications, whether it’s in the context of their digital lifestyle or their digital work style.

PressPass: Microsoft is also investing in unified communications via Windows Live. What’s the strategy between the two investments?

Raikes: Well, certainly the Business Division is taking the lead on unified communications in the context of our professional work, and Windows Live is taking some of the work of the Business Division, as well as other technologies to expand the communications possibilities for consumers. We see these investments as highly complementary.

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