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Microsoft's Unified Communications "Strategy"

For the last week, I’ve been wondering what Microsoft would announce today, at their Microsoft Unified Communications Group Strategy Day (what a mouthful, eh?). You see, ever since Ina Fried wrote her piece titled Microsoft Aims to End “Phone Tag” on News.com, people have been phoning me and asking what I thought of it. My guess was that there was more than a little hyperbole in the announcement — after all, phone tag is caused by the precise fact that people don’t want to be reached at a particular time. No piece of technology is going to change that.

Moreover, Steve Ballmer has been telegraphing the company’s intent on this for a while. Last December he told an Ottawa audience that “In 10 years time, your telephone will know which calls are important to take.” I sent him mail afterward congratulating him on our shared vision. And, I offered to give them a hand. After all, when it comes to that particular vision, iotum has a little bit of expertise.  It’s what we do — make your phone ring when it’s important to take the call, and have the call handled some other way when it can wait…Since we started coming out of stealth in the fall of last year, we’ve been named Product of the Year by Internet Telephony, DEMOgod at Spring DEMO 2006, been one of the Business 2.0 Next Net 25, one of the Branham Group’s Top 25 IT Up and Comers, and most recently we were given the 3M Canada Company Emerging Technology Award as the top emerging technology company in Canada.

So naturally, with all the hoop-de-doo last week, it made me wonder how close to Steve’s “10 year vision” the company has gotten.

In this morning’s Microsoft Plans to Blend Phones With Computers, John Markoff revealed a little more information, positioning the announcement as essentially a rebranding of Exchange, and Microsoft as late to the field. It began to feel a little disappointing after the buildup. Indeed, judging by the fact that none of the products announced will be available until Q2 2007, there is a certain feel of desperation in their strategy. A cynic might accuse them of spreading a little FUD to freeze the market for a bit. That was the view of some others, too:

“We’ve been far ahead of Microsoft in these technologies,” said Ken Bisconti, I.B.M.’s vice president for workplace, portal and collaboration products, speaking from Cambridge, Mass.

“Microsoft might have realized that there are a lot of people who have seen this idea,” said Mark Spencer, president of Digium. “They want to get the message out there that they have a strategy.”

Ouch, Mark… that’s harsh!

When the announcement came, it was a damp squib. Microsoft will rename Exchange Live Communication Server as Communications Server, and add telephony features to Communicator, and other products. It’s an integration announcement, as opposed to a dramatic new direction — a reprise of the 1993 announcement that created Microsoft Office out of Word, Powerpoint, and Excel. Interestingly, this tactic may backfire for them this time around. Today there’s much more focus on open standards. The idea that you must buy all of your infrastructure from a single vendor just isn’t palatable for many companies today. Certainly, that is the view expressed by TMC’s Tom Keating in his coverage of today’s announcements.

If there’s any take away from this event, I would argue that it’s that Microsoft has PBX manufacturers squarely in its sights. In fact, at the event this afternoon, Microsoft VP Anoop Gupta even acknowledged that the company expected some customers would abandon their PBX’s in favour of server based solutions. At the CTO level in most major PBX manufacturers organizations, there is recognition that the infrastructure components are becoming a commodity. With Asterisk, and other open source PBX products out there, there is simply no need to spend 10’s of thousands of dollars on a proprietary Nortel, Avaya, or Mitel PBX. This is forcing PBX manufacturers to go through a very similar process of introspection to carriers. As one high level exec at one of these manufacturers told me, “Open Source is forcing us to focus on value added applications”. Well, Open Source isn’t the only issue. Add Microsoft to the mix now. Add IBM too, because immediately following Microsoft’s announcements, IBM made their own announcements, including the fact that they were partnering with several Microsoft competitors, and would ship by this summer, a full three quarters ahead of Microsoft.

Today’s proprietary PBX manufacturers are like the proprietary word processor manufacturers of 30 years ago. Some survived by moving to the PC platform, but most (does anybody remember Wang, for instance?), failed. Hopefully they’ve learned the lessons of yore…

Does this impact iotum? Not really. First, Microsoft is playing exclusively in enterprise, and we’re not. Moreover, none of these products will ship for another year. And, perhaps most tellingly, they likely have swiped a few of our ideas, but the implementation is, frankly, simplistic. No doubt it will improve, but that will be sometime after the 2007 launch.

From the Microsoft Communicator Fact Sheet, there is a short paragraph buried deep in the document:

Enhanced presence awareness and control. Communicator 2007 provides users with granular control over their presence information; for example, a company CEO can define who in her address book can see her availability and presence. Communicator 2007 also recognizes presence information for remote team members, partners and customers over a broad range of devices, applications and networks.

Microsoft VP Anoop Gupta provided more detail in the Q&A, when one gentleman stood to ask a question about why applications can’t do more sophisticated things with presence. Anoop answered that:

  1. Applications are starting to automate the setting of presence — when you set the Out of Office message in Outlook, it will set presence to away. Get on the telephone, and presence will set to on the phone. How, however, do you deal with users that you want to express different states to — busy to my boss, but available to my wife?
  2. Applications are starting to give users more control over their reachability, doing a better job of helping users to preserve privacy. Communications Server will allow users to have up to four levels of privacy — for example: immediate colleagues, divisional, across the company, and so on. Differing amounts of information might be revealed, depending on the relationship. What part of my organization does my family belong in, I wonder? That, of course, is the peril of a strictly hierarchical relationship system.
  3. Presence itself will be a platform component built on an XML infrastructure, and customizable by third parties.

In fact, I think that Microsoft’s entry has the potential to be very good for iotum. It validates what we’re doing, but their vision is still a “10 year vision– so far away that there’s no near term threat. If anything, it could trigger a wave of consolidation in the nascent VoIP apps business as competitors snap up smaller players like iotum and Tello in order to buttress themselves against the eventual Microsoft assault.

In the meantime, it’s probably time to dust off the LCS integration we did last summer. It’s great that Steve and Anoop share our vision, but it looks as if the folks in Redmond are going to need some help to achieve it.

{ 3 comments… add one }

  • Andrew June 26, 2006, 5:57 pm

    Microsoft's entry into this market is not a wise move at all, Exchange is a moneymaker for them plain and simple – if it ain't broke…, forcing any type of telephony solution on Data VAR's who have pre-existing relationships with PBX manufacturer's is a big mistake, the right strategy is to complement the existing sales channel, which so many Microsoft/PBX partners have done very well for a long time now.

    Adding Fax/Voice/IM resources to Exchange has been so glaringly absent for so long, it will take M$ the full ten years to catch up to the partner market, and then only to realize they are not equipped to play in that world.

    Maybe they should buy Nortel? :)

  • Will June 27, 2006, 1:44 pm

    Microsoft is not renaming Exchange to Office Communications Server. They will remain separate products.

  • Rick June 28, 2006, 7:37 am

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