On June 25th, in San Francisco, Jeff Raikes, President of Microsoft´s Business Division, changed the IP telephony and communications landscape forever. He did this on so many levels with the company´s Unified Communications (UC) announcement. He boldly told IT executives to stop spending on IP telephony since Microsoft´s Unified Communications products will radically increase corporate productivity and change the cost of ownership of enterprise communications, thanks to software economics. He pushed aside Avaya, Cisco, Mitel, ShoreTel et al., by saying that these companies do not have the vision and ability to execute on the next wave of IP telephony. The next wave is the strategic phase that ushers in communications-enabled business process and brings with it a new communications experience for hundreds of millions of people. And you know, Raikes is right, most IP tel suppliers don´t have the next wave vision.

The existing IP telephony vendors, with the exception of Avaya and Siemens, have been focused on hardware. In the Lippis Report, we´ve been writing and podcasting about how applications are where the value is in IP tel. In short, you have to ask, what can you do with IP telephony that you couldn´t do with TDM-based PBXs? Today´s answer is, not much. The industry narrowed the gap between TDM and IP tel features, but Microsoft blew that gap away and answered the question by linking communications directly into office productivity tools such as Exchange, Word documents, Excel spreadsheets, Live meeting, etc., making it easy for professionals to connect and communicate independent of end-points. Tools such as click-to-call and click-to-conference will be embedded into familiar Microsoft software, eliminating learning curves, allowing professionals to quickly embrace the new functionality and communicate, and speeding up business process by extracting human delay from workflow.

Then on July 18th, Microsoft puts more muscle behind UC by announcing the Innovative Communications Alliance with Nortel. Steve Ballmer says that the relationship with Nortel will be as strategic and prosperous as Microsoft´s relationship has been with Intel, Dell and HP in the computing market. Simply put, over the next five years hundreds of millions of people will receive a new communications experience, thanks to the move to IP and Microsoft teaming with Nortel, who want to be a big part of this spending cycle. Nortel brings Microsoft credibility in voice communications and large enterprise systems, while Microsoft delivers a much needed boost of confidence to Nortel´s enterprise business. Microsoft will open up its access to IT executives to Nortel so they can tell a common UC story. This is access that Nortel could never get on its own.

This is a sea change. Microsoft is now a phone company and will use its massive distribution channel and developer community to change the communications industry forever. Its June 25th Unified Communications announcement was comprehensive and visionary. Microsoft is not only enabling VoIP in its office suite of software products, but offering a call manager, IP phones, and a developer environment which will unleash creativity into the IP tel market that has not had an organizing principal around application development until now. It has created an ecosystem around its Unified Communications for IP phones, application development and system integration. Like I said, it´s a broad vision embraced by many leading industry players.

Microsoft tapped its long-time ally in the system integration and professional services business, HP, to help large enterprise customers rollout and integrate its Unified Communications. It also tapped another long-time ally, Siemens Communications, and its systems integration and support services to integrate Siemens HiPath 8000 softswitch real-time telephony with Microsoft´s Exchange and Office Live Communications Server, utilizing the Siemens OpenScape communications broker capability.

Motorola, yet another long-time ally and powerhouse, was tapped by Microsoft to integrate Motorola´s HC700 series rugged mobile computing devices and the Motorola Q® smart phone with Unified Communications. Motorola and Microsoft will combine the presence awareness and instant messaging capabilities of Communications Server 2007 (see below) with Motorola´s Windows Mobile© 5.0-based devices through the integration of Microsoft Office Communicator Mobile with Motorola´s MOTOPRO® Mobility Suite and Wireless Services Manager (WSM) products. The end result will be to enable users to seamlessly communicate and collaborate across wired and wireless access networks.

HP, Siemens, Nortel and Motorola will allow Microsoft to address the large enterprise market. Another key part of Microsoft´s ecosystem is a group of companies to develop end points or devices such as IP phones, Universal Serial Bus (USB) handsets, wireless USB headsets, USB webcams, and PC monitors with built-in audio and video components which will have the Microsoft Office Communicator 2007 (see below) client embedded allowing communications with its Communications Server 2007, discussed below. Microsoft amassed an impressive list of companies including Polycom Inc., LG-Nortel Co. Ltd., Thomson Telecom, Logitech, Plantronics Inc., Samsung, and Tatung Co.

So what is Microsoft´s Unified Communications program? Microsoft´s approach to unified communications is a multi-modal approach of reaching people independent of end-point or communication application such as e-mail, IM, mobile, VoIP, audio, video and web-conferencing. While these communication applications are silos today, Microsoft´s Unified Communications seek to integrate and unify their access via a common software man-machine metaphor.

To deliver on the above, Microsoft announced communication enhancements as part of its Office System 2007 products. In late 2006 or early 2007 Microsoft is scheduled to release Microsoft Exchange Server 2007 and Microsoft Speech Server 2007. Microsoft Exchange Server 2007 unified messaging will deliver a unified inbox experience that includes e-mail, voice mail, and faxing functionality, as well as new capabilities such as speech-based auto attendant, allowing users to access communications from any phone.

In essence Microsoft Exchange Server 2007 will be the traditional view of unified communications. Alone, this would be interesting but not compelling. The bulk or main thrust of Microsoft´s unified communications strategy will not be available until the second quarter of 2007, or approximately a year from now. Scheduled to ship next year are:

Microsoft Office Communications Server 2007: This is the heart of unified communications and will be the focus of many developers. Think of Cisco´s Call Manager or Avaya´s Communications Manager. It´s a Session Initiation Protocol (SIP) based real-time communication platform that enables presence-based VoIP call management, audio-, video-, and web-conferencing, and instant messaging communication within and across existing software applications, services and devices. Don´t look for Microsoft to open up its presence manager to any of the IP telephony vendors, except for Nortel and Siemens. This is key as presence will be the feature which will drive productivity and Microsoft will keep it off-limits to competitors.

Microsoft Office Communicator 2007: This is the client software that works with and communicates to Communications Server. Communicator is key as it unifies all the different modalities of communications into a single interface. It delivers a presence-based, enterprise VoIP ?¬¢‚Äö?ᬮ??¨softphone?¬¢‚Äö?ᬮ¬¨??; secure, enterprise-grade instant messaging that allows for intercompany federation and connectivity to public instant messaging networks such as MSN©, AOL and Yahoo!; one-to-one and multiparty video- and audio-conferencing; and web-conferencing. Office Communicator 2007 will be available in desktop, browser-based and Windows Mobile©-based versions.

Microsoft Office Live Meeting: Improvements to Office Live Meeting include support for e-learning, enhanced audio and video capabilities including VoIP, a streamlined user interface, seamless integration with the Microsoft Office system, and simpler deployment.

Microsoft Office RoundTable®: This is a very cool conference IP phone with 360-degree video/camera support. When combined with Office Communications Server 2007, RoundTable delivers an immersive conferencing experience that extends the meeting environment across multiple locations. Meeting participants on site and in remote locations gaining a panoramic view of everyone in the conference room as well as close-up views of individual participants as they take turns speaking.

Microsoft Office Communicator phone experience: This is the partner/developer´s point of entry into the Microsoft Unified Communications ecosystem. Communicator-based software designed to run a set of new voice and video devices : including business-enabled IP desktop phones : from Polycom Inc., LG-Nortel Co. Ltd., and Thomson Telecom. This is a new ecosystem designed to run on dedicated communications devices in tandem with Office Communications Server 2007 to extend and enhance the Microsoft Unified Communications experience.

PC peripheral devices: Another important UC area as it seeks to break the proprietary hold the traditional telephony players have held over the industry by opening up the interface between end points and call control servers. These devices include USB handsets, wireless USB headsets, USB webcams and PC monitors with built-in audio and video components. Devices from industry partners GN Netcom Inc., Logitech, Motorola, Plantronics Inc., Samsung and Tatung Co. will work with Microsoft Office Communicator 2007 to deliver a communication experience on the PC.

Analysis

The Race For Developer Mindshare: Microsoft´s MSDN is the industry´s, if not the entire economy´s, best developer community. This is a key strategic advantage as Microsoft offers economic value to its MSDN partners by participating in its Unified Communication (UC) program. From a competitive point of view, the two largest IP telephony players, Avaya and Cisco, have developer programs. Avaya is much further along with its DevConnect program of nearly 3000 companies and its embrace of Web Services/SOA to either compete or complement Microsoft´s UC initiative. Cisco´s CTDP developer program has fewer members and is not as well-focused on communication application development. Look for Cisco and IBM to team on creating a developers ecosystem.

Developer Environment: It´s not clear what or which developer environment Microsoft has chosen for its developers. SIP is clearly the core technology of Communication Server 2007. Siemens, as one of Microsoft´s partners, brings OpenScape to the table with a Web Services-based application development interface. Cisco has its SONA, or Software Oriented Network Architecture, which is focused on protocols and application development interfaces. Avaya and Nortel are focused on Web Services/SOA with Avaya being much further along but with Nortel now teaming with Microsoft on development.

Feature Set Deficit/Scale: Microsoft has not communicated the feature set associated with Communications Server 2007. It is SIP-based so it will more than likely have SIP´s seven key features. But Communications Server 2007 will not be able to compete with the IP telephony industry´s 700 + phone features alone. The real question is how much do the 700 features matter? Many of these features were developed as custom features for customers over decades of work. How applicable they are is unclear. Nortel will integrate or link its Succession CSE 1000 with Microsoft´s Communications Server, expanding the feature set of UC to be competitive with IP telephony players. In addition to feature set, there is the question of reliability, security, performance, availability, and scale of Communication Server 2007. Let´s be honest; Microsoft has been challenged with all of these key architecture attributes over the years. The question is will Nortel be able to offer these attributes to UC?

Timing: Microsoft´s UC doesn´t get interesting until next year with the release of Communication Server 2007. While UC is bold and includes an ecosystem, the question of architecture stability rises in my mind. What I mean is that it usually takes Microsoft a few product releases to get a product stable, especially one with so many companies participating. To expect a rock-solid, stable, and secure UC on first release would be optimistic at best. Delaying IP telephony spending today to meet business requirements in the hopes of deploying UC tomorrow does not seem prudent.

Application Focus: Microsoft´s UC is focused on the desktop and personal communications. While this is important, what UC does not address is the linking of IT with communications to deliver communication-enabled business process. UC in essence focused on person-to-person communications leaving out system-to-person or system-to-system communications, which have the advantage of extracting ?¬¢‚Äö?ᬮ??¨system?¬¢‚Äö?ᬮ¬¨?? delay from business process. Nortel promises to bring system-to-person and system-to-system communications to UC through its System Integration business. The question here is can Nortel deliver as its Integration business is young.

Executive IT Will Now Make Communications Buying Decisions: The IP telephony players have seen their customer/audience shift over the years. Cisco helped move the purchasing and design decisions from telecommunication managers to network managers. Avaya and Siemens have started to shift the decision to executive IT departments thanks to their focus on Web Services/SOA. Microsoft has executive IT mindshare and credibility which will accelerate the purchase and design decision to this group, which may be a gift to the IP telephony market. Now executive IT will take charge of communications and be forced to do due diligence by reviewing all architectural options, opening the door and creating a seat at the table for the IP telephony vendors. The real challenge here is that there are many buyers within a single company who purchase e-mail, voice, IM, desktop software, network infrastructure and data center systems. The hope is that the user´s new communications experience will be so great that they will demand their IT executives to deploy UC. This scenario is a leap of faith, albeit a calculated one, that has been proven in the industry before with PCs, LANs, e-mail, etc all of which forced organizational change within IT.

Big Winners: Nortel is the largest winner in Microsoft´s UC announcement, thus far. Nortel has nothing to lose and everything to gain here as Microsoft gives it the tools and credibility to compete against Cisco and Avaya. Siemens may also be a winner as Microsoft will give Siemens´s OpenScape access to MSDN partners. If Siemens plays this opportunity right, it could be a significant communication platform that developers start writing to, broadening Siemens´ potential addressable market. Microsoft is the other potential big winner as it has put in play the $25 billion enterprise voice market, of which it plans to win a sizable share. Cisco is another big winner as nearly every company in the global economy will beef up i´s network infrastructure of switches and routers to accommodate UC.

The Challenged: Cisco´s IP Communications group, Avaya, Mitel, ShoreTel et al., will all be challenged to review their business plans and react to Microsoft´s UC initiative. Those companies who cling to the old model of proprietary phones connecting to an IP-PBX will be the first to lose in the next world of communications. Those who focus on application development, software, and services will be rewarded. Those who stick with hardware and old-fashioned approaches to unified messaging or siloed communication products will lose. The game has changed and for the good; communications is becoming a software and services world based upon general purpose hardware platforms and open end-points.

Advice for IT/Network Business Decision Makers: Microsoft´s UC is a vision and commitment. It could take Microsoft a few years to get it right, but it will get it right. In the near term, there isn´t much to do other than educate yourself on the architecture and how it could be put to work for your company. The key activity to do now is get your network infrastructure ready to support a converged network as Microsoft´s UC will be a converged network accelerator. I strongly encourage you to do an IP readiness assessment and implement service level management tools and techniques. Now is the time to do this planning.

If you are in the middle of an IP telephony roll-out then continue as the depreciation cycles are not seven years any longer, but closer to three. This gives you plenty of time to enjoy the benefits of your IP telephony system and plan how best to utilize UC when it´s available. If you are in the consideration phase with a deployment schedule in mid to late 2007, then you would be delinquent if you didn´t review UC. There will be a flurry of announcements and product enhancements from all the IP telephony vendors as they react to UC over the next year. Plan on giving yourself some time to allow the industry to react to UC, so that you can make an informed decision as to when and how best to deploy. It´s highly likely that all IP telephony vendors will interface into UC. In fact, this will be a competitive differentiation. Also remember, the fact is that your users will get UC on their computers as you deploy Microsoft Office System 2007. UC is inevitable; it will be part of your IT infrastructure.

Welcome to the third phase of IP telephony: the strategic phase, the communications-enabled business process phase. The economy will see another huge productivity boost as this phase takes hold. Business process will never be the same.

Posted 24 July 2006 at 9:56 am under Lippis Report, Unified Communications & Comm.-Enabled Business, Enterprise Mobility. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.