The software giant and 3Com said they will partner to create Windows-based networking products to help telecommunications carriers, businesses, and consumers build networks that integrate voice, data, and video.
Microsoft already has a significant relationship with Cisco Systems, the leader in data networking. Gaining the help of 3Com may aid the Redmond, Washington-based firm as it tries to convince large organizations that NT, in its various forms, can play a role in high-end settings.
"We have a shared vision for the need for converged networks and the new types of applications and cost savings that result from it," said David Flynn, 3Com's vice president of marketing.
As part of the pact, Flynn said 3Com will also open a 25,000-square-foot development center near Microsoft's Redmond headquarters by mid-1999 to test integrated 3Com and Microsoft products.
The move feeds into Microsoft's strategy to make NT an operating system for all types of computing, from Web serving to business applications. The company has extended NT into the embedded world to take advantage of the need for software within all types of devices not normally associated with Windows, such as factory machinery.
Flynn said he believes Windows NT is scalable enough for its networking products. 3Com currently uses NT for telephony based on the Internet Protocol, or IP, digital wireless data, cable systems, and remote access products, he said.
"We've been working with it and continue to optimize and enhance the operating system," he said. "The alliance is proof that the Windows platform has evolved to become a wonderful communications platform, with a tremendous amount of functionality."
Berge Ayvavian, executive vice president of the Yankee Group, said today's deal helps both companies.
"For 3Com, it's a big boost," he said. "It's a major alliance, which will allow 3Com to compete more effectively with Cisco's initiatives and new Lucent activities."
Although Microsoft continues to work closely with Cisco, the software giant views Cisco as a competitor long-term and a deal with 3Com gives them some protection, Ayvavian said.
"Microsoft knows that the biggest dominant players in sectors will have to be synchronized," he said. "Integrated hardware and software is inevitable. Ultimately [Microsoft and Cisco] will be at odds. Aligning with 3Com gives themselves a foil against Cisco."
Walking a fine partnership line, Microsoft executives stressed the differences between their partnerships with traditional rivals Cisco and 3Com.
"This relationship [with 3Com] is an important relationship for Microsoft, and Cisco is an important relationship," said Kevin Kean, Microsoft's group product manager for communications "We're hoping both will develop and result in products."
3Com and Microsoft said the partnership will last indefinitely. "We expect this to continue and don't see an end point to it," Flynn said. "The amount of initiatives we're engaged in continues to accelerate and we've been ramping up sharply in the last year and year and a half."
Kean said the goal is to push converged networking products into the market. "The vision is real," he said. "Networking will continue to evolve and the point of our relationship is to begin the education, begin the development of pieces that can implement the converged network vision."
The two companies will collaborate on building performance and desktop enhancements into Windows 2000, including network interface cards that perform IP processing and secure encryption. The card will also alleviate the workload of server and PC processors.
The network interface card offers 10 times the performance of current products, Flynn said.
For consumers, the pair will build home network and broadband access products, collaborate on Universal Plug-and-Play, and package cable-ready Microsoft software with 3Com's cable and DSL modems.
Much of Cisco's work with Microsoft centers around the software firm's forthcoming Active Directory service, a tool being provided in the next upgrade of Windows NT, now dubbed Windows 2000.
Another test release of the Windows 2000 upgrade has been delayed, though Microsoft executives still expect the operating system to ship by the end of the year. The embedded version of NT is independent of the Windows 2000 release schedule, due to the fact that it is based on the current version 4.0 of Windows NT.