Microsoft VoIP Phone Announcement Is Serious Business

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By Adding 15 OCS-compatible phones Microsoft puts Avaya and Cisco in its sights.

Keep those blue screens of death jokes coming, but don't be fooled. However funny it might seem to entrust your phone system to the software everyone loves to hate, Microsoft is on track to become a dominant IP telephony player. It surely won't mind if people get the wrong impression about what it can or wants to do. After all, the more clear it is about its plans, the fiercer opposition it will encounter from entrenched IP PBX vendors like Avaya and Cisco, whose cooperations it needs in the meantime.

Its VoIP phone announcement yesterday represented a significant step towards Microsoft's IP telephony goals. Nine manufacturers unveiled 15 IP telephones that will be compatible with Office Communications Server 2007, Microsoft's software for providing IP PBX functions over a corporate network. The manufacturers included ASUSTek Computer, GN Netcom, LG-Nortel, NEC, Plantronics, Polycom, Samsung, Tatung and ViTELiX

This means companies using Microsoft's phone solution won't be stuck with headsets. The announcement came just a couple of months after the software vendor made a big deal about a study — which it had commissioned — showing that its soft phones provided better call quality than some Cisco desk phones. Taken at face value, that might give you the impression that Microsoft saw the future mainly in terms of headsets and soft clients running on PCs. Yesterday's announcement proved otherwise.

Microsoft has been touting OCS 2007 as a large enterprise solution, complete with predictions that 100 million Office users will be using click to call within three years. But at least one observer thinks it's looking at another target in the meantime.

Frost & Sullivan Analyst Krithi Rao notes that a number of the phone manufacturers in the announcement have been targeting small and medium-sized businesses in the U.S.

"I see [Microsoft] with their announcement telling small business customers that if you don't need a full sized PBX with all possible call control capabilities, our solution, which has some level of telephony capabilities, can be deployed with these end points which are already certified with our solution," said Rao. "And you have a communications system up and running."

At the same time, any move towards the low end of the market would — in addition to distracting unwary competitors — give Microsoft time to get its act together for an assault on the large enterprise.

"I think right now OCS is a step in the right direction, but it still doesn't include all the necessary call control features an Avaya or Cisco or Nortel have in their PBXs," said Dell'Oro Group Analyst Alan Weckel. "As a standalone product it doesn't work, so in this round they have to cooperate with all the PBX vendors in order for this product to be successful."

But it won't need to cooperate, or to deflect attention from its real plans, forever.

"If I ask you in the future what's in the next version of Office Communications Server, say in 2009 or 2010, you might say they’ve added enough functionality that you no longer need another PBX for call control," said Weckel. "The basic call control resides in the Office Communications Server, and the PBX is a peripheral device to do international call control and a couple of complex things like that."

By then, you'll have long forgotten how humorous it was to think of putting such a critical activity as talking on the phone in the hands of a maker of notoriously unreliable operating systems.

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