Late last month, Microsoft announced plans to “transform business communications” by providing a complete solution that integrates IP telephony with Microsoft desktop applications. The announcement included the promise of a new 360-degree videoconference camera, new software, and new partnerships.
In-Stat analyst Norm Bogen says the company’s aim is simple: to leverage their installed base of desktop software customers in order to deliver VoIP services. “Just like they integrated all of the functionality into Office, they’re integrating more and more VoIP functionality into the desktop applications so they can control more and more of the customer’s usage,” he says.
And Bogen says there’s no reason to think they won’t succeed, particularly with smaller companies that can’t afford to turn down that kind of pre-integrated functionality. The Ciscos and Avayas of the world probably don’t have to worry about their larger customers leaving them for Microsoft, Bogen says, but for smaller offices, Microsoft’s solution “may not be as good, but it’s more than sufficient.”
Slowing down the competition
Still, as JupiterResearch analyst Joe Wilcox points out, most of the solutions that Microsoft announced last week aren’t shipping yet. As a result, he says, the timing of Microsoft’s announcement only makes sense when you look at what’s going on competitively. “It’s not unusual for Microsoft to make a bold announcement about something it’s going to do someday as a tactic against competitors that might be shipping something new today,” he says.
And sure enough, on the same day that Microsoft made its announcement, IBM announced the release of Lotus Sametime 7.5. “Microsoft’s been doing this for as long as I can remember,” Wilcox says. “You talk about something you’re going to do in the future when your competitor releases something or is about to release something—and customers stop and think, ‘Wait, maybe we should wait and see what Microsoft will do,’ and then they delay that purchase.”
Wilcox says his biggest concern about Microsoft’s plans is the potential cost for a business to deploy them. “We’re looking at, minimum, Windows Server 2003 R2, Communications Server 2007, Exchange Server 2007—those three products, plus client access licenses—and that’s at a minimum,” he says. “That’s a lot of money to spend to get this, whereas a business might be able to get something that’s reasonably adequate, costs a lot less, and is available now.”
A long term challenge
Yankee Group analyst Zeus Kerravala agrees that the announcement seems aimed squarely at persuading potential customers to delay any purchases until they get a better sense of what Microsoft’s offering looks like. “Even if an enterprise ultimately decides to go with one of the traditional manufacturers, it still may slow down their decision,” he says.
Still, Kerravala says the company’s competitors don’t have much to worry about, at least in the short term. “Microsoft eventually gets things right, but they always start off slow,” he says. “If you look historically at their product roll-outs—even with Windows and Office—those products were not nearly ready for prime time when they rolled them out.”
And so, what competitors in this space should do, Kerravala says, is offer incentives to get customers migrated as fast as possible—before Microsoft gets it right. “Right now, there’s a lot of people trialing it, and not a lot of people deploying it widely,” he says. “Our research shows about 80 percent have at least tested it, but only 6 percent have it deployed across their organization. So the short term question for the Ciscos and Avayas is, how do you get that 80 percent closer to where the 6 percent is?”
Voice: just another application
This is all part of a larger effort on Microsoft’s part, Kerravala says, to transform voice (and related IP functionality) into just another application on the desktop—which would, of course, put Microsoft in control. “If you’re an enterprise and you want to run Microsoft’s Messenger, and Microsoft’s presence information comes free to you on the desktop, why would you want to run Cisco’s or Avaya’s or Polycom’s or whoever?” he says.
Still, Kerravala points out one potential wrench in the works—the number of times each day that most users find themselves having to reboot their PCs. “Microsoft’s made the reboot part of everyday life, and that’s where they need to get better when it comes to voice,” he says. “You can’t instill that kind of work process into telephony: you can’t just expect users to reboot. Right now, when you reboot, at least your phone’s there—but if it’s tied to it, then I’m not sure that it’s going to be all that popular.”