TORONTO—Nortel Networks Ltd. and Microsoft Corp. are teaming up to provide unified communications with the intent of transforming business communications systems.
The companies said they agreed on a four-year deal to share technology and marketing to accelerate the availability of unified communications, breaking down traditional device and network-centric silos of communication, such as e-mail, instant messaging, telephony and multimedia conferencing.
“Nortel and Microsoft have each led fundamental transformations in their own markets—Nortel’s digital innovation and Microsoft’s software on every desktop,” stated Mike Zafirovski, president and chief executive officer 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.”
The partnership spells out that Nortel will be Microsoft’s strategic partner for advanced unified communications solutions and systems integration, and the companies said they will deploy each other’s technologies in their respective enterprise networks.
Microsoft CEO Steve Ballmer said, “We are investing together because the communications industry is at an inflection point. 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.”
Zafirovski added, “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. 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.”
In their press release, the companies said they plan to cross-license intellectual property, clearing the way for Nortel to deliver solutions that complement Microsoft’s unified communications platform, including enterprise contact center applications, mission-critical telephony functions, advanced mobility capabilities and data networking infrastructure.
Bill Lesieur, director of industry advisory firm Technology Business Research, called Nortel’s move bold, adding that, “Whether or not Nortel can make the Microsoft relationship work, it shows that the new outsiders at Nortel are making the company think differently and view emerging market opportunities and evolving value chains from a different perspective.”
But Lesieur cautioned that “the new Nortel/Microsoft duo will be pitted against the well established Cisco/IBM duo in delivering IP telephony and unified communications.”
