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Cisco, Microsoft team on networks

The giants will attempt to unify the way networks provide access and offer services.

Cisco Systems (CSCO) and Microsoft (MSFT) will join forces in an effort to unify the manner in which networks provide access and offer services to customers.

The two companies announced an agreement for the router leader to license the software giant's next-generation Active Directory. The directory is a key component of Windows NT Server 5.0, the next version of Microsoft's operating system for corporate networks.

A directory provides a central repository for all network resources, including systems and applications, for managers to use when configuring systems. Active Directory is part of Microsoft's play to make Windows NT Server a more heavy-duty operating system for large network environments, similar to Unix.

The partnership will benefit Microsoft because Cisco's market is largely in enterprise networks, telecommunications carriers, and Internet service providers. A directory linked to Cisco's Internetworking Operating System (IOS) could potentially open the door for a more unified approach to directory services, an area that currently is populated by several vendors, including Novell and Netscape Communications.

Cisco will integrate Active Directory into IOS and port it to various Unix flavors. This could dampen Novell's recent moves to make its directory services the most ubiquitous platform in the industry. It could also alter the landscape for network services because IOS is an umbrella name for a whole set of protocol support and service features, such as security.

"It's very impressive," said Jamie Lewis, president of the Burton Group. "If they follow through on the promise, customers will be very happy."

For Cisco, there is risk involved. Active Directory will be a first-generation feature of Windows NT 5.0, while competitors like Novell have been shipping the technology for three years.