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Tuesday, July 25, 2006

Microsoft and Nortel's UC Alliance

Copyright © 2006 Unified-View, All Rights Reserved Worldwide

July 23, 2006

Nortel and Microsoft Alliance – Unifying Enterprise Migrations to UC?

By Art Rosenberg, The Unified-View

As a follow on to Microsoft’s big “unified communications day” (6/26), they announced a new “alliance” with Nortel last week for joint UC product development and marketing. Such UC announcements will continue to reverberate throughout the industry and the enterprise markets until the full picture of UC impact becomes clear. Industry pundits are having a field day simply quoting the key points of the announcements, but few have jumped on what was not said during the analyst teleconference. However, simple logic can identify some practical reasons why both parties are so enthusiastic about the future.

Microsoft CEO Steve Ballmer was quick to point out that this announcement was not about simple interoperability between their current products, but rather an “alignment” of their technology strengths for future products and services to the enterprise markets. What that means is that the strengths of the two companies will be combined to support the new, user-oriented needs of converged UC technologies that are still in the process of being defined and implemented. This could include jointly developing “unified “ user interfaces for multimodal devices at both the desktop and for handheld mobile devices, as well as consolidated administration and usage management tools for enterprise IT support organizations or service providers.

In particular, it also means that enterprise business process applications will be able to exploit the flexibility of SIP-based, mobile and multimodal communications for timely notification and information delivery to people. While web-based access to enterprise information has become a lot easier across the board, reducing time-sensitive “contact latency” (not “human latency”) for people still remains a major source of business process improvement and associated enterprise value and a difficult challenge for mission critical enterprise operations.

The Missing Links For “Unified” Enterprise Migration to UC

We used to think of enterprise IP migrations primarily from the perspective of VoIP and IP telephony because it marked a major departure from legacy TDM technology. But, when convergence is involved, migrations become a two way street for both the data and the voice sides of IT, especially at the application levels. On the data side, we not only have to consolidate and integrate text-based communication applications (email, IM, SMS, etc.) with voice, fax, and video contacts, but also the integration of enterprise business process applications with proactive information delivery, notifications, and response initiation of self-service transactions (“application messaging”). From that perspective, the person-to-person UC approach of traditional voice providers alone will not cover the waterfront of enterprise business operations.

A key consideration for bringing the application development strengths of Nortel into an alliance with Microsoft is the fact that real-time software applications like telephony has no tolerance for software weaknesses. Not only does the software require both the old and new user functionality of the applications, but also demands the even more than “5 nines” of traditional telephony reliability and mission-critical service responsiveness by sales and support channels. That is what Nortel already has the experience and skills for doing that Microsoft does not; applying those strengths to Microsoft’s desktop application interfaces is a logical next step. As Steve Ballmer emphasized, this will require an “alignment” in software planning development between the two companies.

This “alignment” will also be key to the marketing strategy that UC migration will require. Both Microsoft’s enterprise customer base (email, IM, business process applications, Office tools), and Nortel’s telephony customers (PBX’s, voice mail, ACDs, IVR, conferencing, etc.) will need to plan for a graceful and practical migration to converged functionality. Until the converged directions for both areas are well defined, there will be a reluctance by customers to make any fast implementation moves. What the market in general really needs is a “unified” device-independent, migration approach for all forms of contact technologies that will be flexible enough to cover a variety of enterprise circumstances and requirements for tomorrow, not just a one-sided telephony approach for today.

“Managed” vs. “Hosted” Services

Another perspective of UC that requires rethinking is that IP-based software telephony applications will enable and facilitate “virtual” applications, rather than the hardware-oriented, premise-based servers of TDM telephony. Although both the Microsoft and Nortel speakers at the joint “alliance” announcement hyped the “managed” services potential of IP-based UC, that still assumes that CPE will be a major source of revenue, along with consultative planning and implementation support services that both Microsoft and Nortel, through their channels, would be ready to provide.

Although I listened very carefully during the presentations, I did not hear much mentioned about the increased potential for supporting “hosted services.” Not only is this important for the SMB market that isn’t interested in owning complex technology, it will also be important for larger enterprises who won’t be able to keep up with the ongoing evolution of new, software-based communication capabilities, nor want the responsibilities of supporting many distributed branch locations. Hosted services will be useful for both internal, intra-enterprise mobile contacts, as well as for federating inter-enterprise and customer communication contacts as well. For enterprises who still want more hands on control of their internal communication technologies, it may be a practical matter of initially using hosted IP applications to do a lot of “trying (and learning) before buying!”

In a follow up conversation with Alex Pierson, GM and VP of Nortel Enterprise and SMB Communications Systems, he made it quite clear that “virtual” hosted UC services would be a key offering for Nortel. The question that then remains, however, is who will lead the marketing of such hosted services, a “one-stop shop” carrier like the “new” AT&T or Verizon that can host a wide choice of competing software applications, the different developers of specific application solutions, or a combination of both?

Because Nortel is also a big supplier to the wired and wireless carriers (who are also converging their connectivity services in the form of Fixed Mobile Convergence), this is another area of strength that Microsoft must be looking for. Not only will such “FMC” carriers and Mobile Network Operators (MNOs) be able to provide cellular and Wi-Fi connectivity to individual consumers, but they will enable the enterprise to support and manage the same subscriber’s mobile business contacts as well. This is where a user’s multimodal device and network services can differentiate business contact activity and functionality from personal consumer contacts through an enterprise-controlled call server or service, such as Avaya’s Extension to Cellular capabilities on Nokia cell phones.

What Do You Think?

How will this kind of alliance affect enterprise IT organizational responsibilities for converged communications?) Will this alliance facilitate efficient planning for “unified migrations” to be done by enterprise IT? Will open-source, Linux-based, IP telephony server implementations impact convergence with Microsoft communications applications? Will the combination of Microsoft and Nortel and IP network service providers be able to deal with the new security and regulatory compliance demands of IP communications in general? Do you think that Microsoft will also partner with other large traditional telephony providers like Avaya, as well as the new, pure IP telephony providers? Will the traditional CPE-oriented telecom provider user groups transform into consolidated UC user groups dealing supported by multiple communication technology providers (email, IM, mobility devices)?

Who do you think will end up being the key sales interface to the enterprise for hosted UC services, the technology developers or the services providers? What responsibilities will the enterprise have for the variety of endpoint devices and business process applications that different end users will want? Will vertical markets require different form factors for application-oriented mobile devices or just different software-based user interfaces (visual and speech)? Should we expect Microsoft’s main competitor in the email and IM space, IBM, to make similar telephony provider “alliances” for their enterprise customers?

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