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SAN FRANCISCO—Microsoft, with the help of new alliance partner Nortel Networks, sought to build momentum for its fledgling Unified Communications initiative at the VoiceCon conference here. But the success of Microsoft’s efforts is not assured, and its initial foray into the IP telephony market raised more questions than it answered.

Microsoft’s aim is to become an IP telephony provider by implementing such functions as call control in software, running on standard, off-the-shelf hardware.

Both Microsoft and Nortel believe commoditization will rule the IP Telephony space in the future because it can drive down costs over more expensive, vertically integrated hardware-based offerings sold today, according to Ed Wadbrook, senior director of industry initiatives for Microsoft, in Redmond, Wash.

The two vendors are working together on multiple fronts to bring forward their shared vision for unified communications. They are cross-licensing technology in order to build out a software base on functions, including call control, voice mail and conferencing, on a single software platform. They will co-market joint offerings and Nortel is building a services and systems integration capability around unified communications.

Today Nortel’s Call Server 1000 is integrated with Microsoft’s Live Communications Server and Nortel provides integration services around that combined offering, according to Ruchi Prasad, vice president of global marketing enterprise solutions at Nortel, in Richardson, Texas.

As a part of the two vendors’ road map of deliverables, they are scheduled to roll out integration of LCS, to be renamed Office Communications Server 2007, with Nortel contact center, IVR (Integrated Voice Response) and audio conferencing applications. At the same time, Nortel will sell bundled offerings that combine voice and data networking products that have been tested to work with OCS traffic flows, Prasad said.

And in the first quarter of 2007, Nortel’s Call Server 1000 will be “hardware-agnostic,” allowing the functions of the server to operate on any blade server, Prasad said.

Further out in 2008, the two vendors will deliver “100 percent software-based advanced telephony features, mobility, contact center and other advanced voice applications,” she added.

But with IP telephony growing quickly and large-scale deployments ramping up, Microsoft hopes to freeze the market while its own initiative progresses, according to Zeus Kerravala, an industry analyst with Yankee Group Research, in Boston.

For 10 percent of the enterprises he works with, Microsoft’s admonishment to “Put down the pen” on RFPs they are preparing is working, Kerravala said, adding that this is largely because of fear. “If it doesn’t work, you get fired,” he said.

Click here to read more about Microsoft’s Unified Communications road map.

But not all enterprises see it that way. “Integrating voice and data is happening at a low level today. You can’t wait till the rich capabilities are all there. Go build your infrastructure first and then build on top of it your business requirements,” urged Bernard O’Neill, vice president of network services at Prudential Financial, in Roseland, N.J.

Prudential in fact upgraded its WAN (wide-area network) services to MPLS (Multiprotocol Label Switching), and it is doing an internal infrastructure upgrade for IP telephony, he added.

Another customer at a large insurance company, who asked not to be identified, said waiting for Microsoft’s initiative to unfold will not be necessary.

As a newcomer to the IP telephony space, Microsoft will also have to prove it can deliver on its Unified Communications vision in a way that is reliable, secure and at an acceptable quality level, the customer said.

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