Nortel and Microsoft Form Strategic Alliance

WebKnowHow
Wednesday, July 19, 2006; 02:31 AM

Microsoft Corp. and Nortel announced a strategic business alliance in the field of business communications.

By combining Nortel’s top network quality and reliability with Microsoft software’s ease of use, the alliance intend to accelerate the availability of unified communications — an industry concept that uses advanced technologies to break down today’s device- and network-centric silos of communication (such as e-mail, instant messaging, telephony and multimedia conferencing) and makes it easy and efficient for workers to reach colleagues, partners and customers with the devices and applications they use most.

Microsoft CEO Steve Ballmer (R) and Nortel President and CEO Mike Zafirovski announced the strategic alliance at Microsoft headquarters in Redmond, Wash.

Nortel and Microsoft intend to transition traditional business phone systems into software, with a Microsoft unified communications software platform and Nortel software products to provide further advanced telephony functionality. This software-centric approach will provide the easiest transition path for businesses, helping enable them to reduce the total cost of ownership and better protect current and future investments.

“Nortel and Microsoft have each led fundamental transformations in their own market — Nortel’s digital innovation and Microsoft’s software on every desktop,” said Mike Zafirovski, president and CEO of Nortel. “By combining our unique strengths, Microsoft and Nortel will accelerate the delivery of unified communications — delivering to our customers a higher-quality user experience, with greater reliability and lower total cost of ownership. That’s where we can make a real difference.”

“We are investing together because the communications industry is at an inflection point,” said Steve Ballmer, CEO of Microsoft. “We will have deep collaboration in product development with Nortel, allowing us to rapidly deliver high-quality, highly reliable solutions that will support mission-critical communications. The opportunity for our customers is fantastic. We will enable them to realize tremendous economic and business benefits from unified communications.”

“This is a gutsy play for Nortel — accelerating the move of our voice technology into software and working with the world’s software leader as part of our broader business strategy to transform the company into a software and services leader,” Zafirovski said. “From this transaction, we believe we can capture well beyond $1 billion in new revenue, ramping up with increased momentum through 2009 via professional services, voice products and applications, as well as data pull-through in the enterprise.”

“Unified communications will drive the next major advance in individual, team and organizational productivity in today’s 24x7, always-connected and increasingly mobile work environment,” said Jeff Raikes, president of the Business Division at Microsoft. “Our software-based approach puts people at the center of communications through a single identity across e-mail, voice mail, voice over Internet protocol (VoIP) call processing, instant messaging and video, and intuitively embeds communications capabilities into people’s everyday work processes, including the Microsoft Office system and third-party software applications.”