Microsoft Office finds its voice

Microsoft is staging the long-awaited coming-out party for its IP telephony software with an announcement that the public beta release of Office Communications Server 2007, Microsoft's voice over IP and unified communications server, and Office Communicator 2007, Microsoft's unified communications client, will be available to testers later this month.

The announcement will be made by Jeff Raikes, president of Microsoft's Business Division, during a keynote address Wednesday morning at the VoiceCon trade show in Orlando, Fla.

The launch of the new software puts Microsoft head to head with other companies selling IP telephony and unified communications software to large companies. As the No. 1 supplier of desktop software to most businesses around the world, Microsoft will likely be a formidable competitor not only to the traditional telephony players, such as Avaya, but also to its longtime partner and more recent rival Cisco Systems.

"Microsoft, because it is Microsoft, will have a big impact on the market," said Zeus Kerravala, an analyst with the Yankee Group. "They will be able to use their influence with customers on the applications and desktop front as another way into the customer account."

But more than adding a new competitor to the mix, Microsoft's entry into the corporate telephony market also marks the next evolution in communications. Tying voice services into Microsoft Office applications turns telephony into another software feature rather than making it a separate and standalone product that requires its own hardware and team of technicians to purchase, install and manage it.

Kerravala said he sees communications being embedded in a slew of other applications from wikis to blogs to podcasts, not to mention the vast array of business applications.

"Once telephony stops being a separate product, there is a lot of room to integrate it with some Web 2.0 technologies," he said. "Microsoft hasn't addressed this just yet, but they seem to be headed there. You shouldn't have to switch applications to make a phone call or send a message."

Raikes said during a recent interview that he believes a software-based approach to IP telephony could revolutionize corporate communications by reducing costs and improving the efficiency of interactions.

"When you get voice and unified communications integrated into the productivity and line of business application infrastructure," he said, "you suddenly open up all kinds of great new value that users really haven't been able to take advantage of."

Microsoft first announced that it was integrating telephony with its Live Communications Server last summer. Soon after that, it announced that it was working with veteran telecommunications equipment maker Nortel Networks to help provide corporate customers with a complete solution that included infrastructure equipment and call-signaling software, as well as desktop software to integrate communications into business applications used on a daily basis.

Click on a name, make a call
Until now, Live Communications Server has been more about corporate messaging and presence than about voice services. Now, with the release of Office Communications Server 2007 and Office Communicator 2007, Microsoft offers support for voice in just about every Microsoft application. This means that users working in an Excel spreadsheet or a Word document can click on a name and instantly make a voice call. Calls can be launched from Outlook and Sharepoint, as well as from Microsoft's instant-messaging client.

Microsoft's Raikes described Office Communications Server 2007 and Office Communicator 2007 as the most important new communications technology since Microsoft Outlook 1997, the e-mail and personal information manager that debuted in 1996. He predicted that the new products would change the way people contact each other by providing more efficient and effective communications.

"This software release is a major step in terms of voice and call management," he said. "And within three years, there will be a hundred million or more people able to make phone calls from Outlook, SharePoint and other Microsoft Office System applications."

But Microsoft isn't the only company that sees the importance of integrating communications into applications. Microsoft's rival and partner Cisco is also working to integrate its unified communications software with a variety of applications, including Microsoft's own Office software. On Wednesday, Cisco is expected to announce even deeper levels of interoperability with Microsoft's Office applications.

For example, Cisco's Unified Personal Communicator client will be able to work inside of Microsoft's Exchange server so users can see all voice mails in their e-mail inbox and make schedule changes through the client that will end up in their Microsoft calendars. Leveraging built-in Microsoft smart tags, users can click on names or phone numbers in Outlook (or in any Microsoft Office application) to make calls using the Cisco voice over IP software. Cisco has not yet integrated its software with Microsoft's Sharepoint software.

"We recognize that not every customer will choose a Cisco solution from top to bottom," said Barry O'Sullivan, vice president of IP communications for Cisco. "I'm sure that Microsoft has developed deeper integrations with their own products and their unified communications software, but our strategy is to be open and integrate with as many applications as we can."

Cisco isn't just working with Microsoft. On Wednesday it will also announce that it has deeply integrated its unified communications software with IBM desktop applications. Specifically, Cisco and IBM have created a tool based on open development technologies Eclipse and OSGi to help software developers easily include communication and collaboration features into custom-built business applications.

"About half of our enterprise customers use Microsoft at the desktop," O'Sullivan said. "But the other half is still using IBM desktop applications, so we need to integrate with both."

In addition to Microsoft and IBM, Cisco is also working with other corporate software companies. For example, it has integrated Cisco Unified Personal Communicator software with Oracle's customer relationship management, or CRM software, so that an operator in a call center can click on a client name and make a call directly from the application.

"Users just want an easy and intuitive way to communicate," O'Sullivan said. "So that means that we have to bring communications to different applications. Whether they use Microsoft, Lotus Notes, SAP or Oracle, we can easily integrate our technology."

Microsoft also claims that it is taking an open approach that will allow its communications software to work with any application. Raikes said that a shift away from hardware-based communication to communication based entirely on software will help spur innovation.

"How much has your desktop phone changed in the last 10, 12, 15 years?" he said. "Very little. Yet, how much has your experience changed for mobile computing, for e-mail, for instant messaging? The real challenge that's held back this part of the industry is that they don't have a broadly accepted software platform that enables the pace of innovation.

"We are putting in place the software platform that will enable this pace of innovation, and the result will be much greater value for customers, because it will be a part of their user experience in doing their work."