Peter Christy

The Nortel Unified Communications Scene

In our experience the world divides into people who value critical analyst input and those that don't. Nortel is apparently in the latter category based on a misdirected email we got having asked what Nortel's Unified Communications strategy might be. The internal AR communications not intended for us said we were very negative and might "cause a scene" which leads to the Zen-like question of how it might be possible to provide constructive criticism to a company that has lost enough market cap to single-handedly pay for a lot of the Iraq war and had a rotating executive management door and not be negative? The end result of this electronic faux pas was a discussion with Phil Edholm, the CTO of the Enterprise Group.  When you have a 5% share in enterprise networking there aren't a lot of options, and in that context fitting to higher level IT architectures makes a lot of sense. Cisco will always have a hard time partnering with Microsoft because they have an inherently opposite perspective: is it the network or the platform that provides the benefit? It's much easier for Nortel to make that partnership work and bring their significant telephony competence to bear on Unified Communications in the Microsoft dialect.

Unified Communications, Top of the 2nd

The ink was hardly dry on the Microsoft Unified Communications vision when there they were with Nortel talking about strategic Unified Communications partnerships.  This deal looks valuable to both parties. Nortel is a strength in telephony although not a top runner in VoIP, so this makes Microsoft's UC offerings more credible and brings Nortel's service offerings to bear for customers. For Nortel who is still struggling to recover from the optical collapse getting aligned with a major Microsoft initiative is much much better than the proverbial sharp stick in the eye which is more descriptive of the last couple of years.  This could prove to be one of the smartest steps that Nortel has taken.  One of those attending the event asked why Microsoft didn't just buy Nortel, which they certainly could without much cash strain.  Ballmer said politely "because we don't have to" citing a successful (for Microsoft) partnership with DEC on email in the past.  That ended well -- for Microsoft at least.  Maybe he should have chosen a better example.

The Grand Unification Theory

In late June, Microsoft described its strategy for Unified Communications irking Cisco since they had also introduced Unified Communications at VoiceCon a few months earlier. Not only did Microsoft have the gall to use the same name but the visions are remarkably similar given the quite different perspectives from which Microsoft and Cisco tend to see things. They agree that the time is right for unified messaging (integrated email/voicemail/FAX inbox) and more, i.e. audio and video conference, presence and instant messaging.  Both visions leverage the network heavily (Microsoft previewed Live Communications Server 2007 with audio and video conferencing) and both are PC centric (Cisco agrees that all of this has to be convenient from the PC, not just the phone). To make the point Microsoft introduced a design for an IP phone with an Office user experience, and Cisco introduced a comprehensive PC communications applet. With so much agreement and alignment it would be reasonable to ask what happens if a customer likes both strategies and wants to meld them.  Cisco says they have no plan to sell a MS compatible phone nor does Microsoft have a detailed partnership with either Cisco or Avaya (the leading VoIP telephony providers.  We like the visions. Assuming neither Microsoft nor Cisco views this as a fight to the death at the OK Corral, it's going to be most interesting to see how their mutual customers sort this out and merge the best bits from both.