New York : Microsoft Corp. vying with Cisco Systems Inc. for business-phone customers, predicts more than a billion people will use software that combines internet-calling features with messaging and video within three years.
Microsoft has more than 100 million customers making calls using its Office software, Gurdeep Singh Pall, vice-president of the company's Unified Communications group, said in an interview.
Microsoft will release a new version of software for Internet telephony and corporate instant messaging this year, said Pall, who at a conference in Orlando, Florida.
That programme, Microsoft's Office Communications Server, increased sales by more than 50 per cent in the year ended June 30. The software competes with products from companies like Cisco and Avaya Inc. in a market that may grow more than fivefold to $14.5 billion in 2015, according to an estimate from Forrester Research Inc.
Office Communications Server ties in with Microsoft's Exchange and Outlook e-mail programmes, giving the Redmond, Washington-based software company a potential advantage in attracting customers, said Jonathan Edwards, an analyst at Framingham, Massachusetts-based IDC.
"OCS fits very tightly with Outlook and Exchange, and it's much easier to manage" than some competing products, Edwards said. "It's certainly going to shake up the market."
Microsoft won't serve parts of the market, Edwards said. Closely held Avaya passed Cisco as the biggest maker of corporate phone equipment last year when it acquired a unit of Nortel Networks Corp., he said. The two account for about half of the market.
Microsoft is working with makers of telephone and videoconferencing hardware rather than looking for acquisitions like Cisco, Pall said. Cisco has agreed to purchase conferencing equipment maker Tandberg.
"No one company can do everything, and you have to know what you are good at and what you are not good at," Pall said. "We are very comfortable playing our humble role, which is in the software and the experience side. We don't believe we need to go buy Tandberg and WebEx because we want to be this one-stop shop for everything."
Pall said Cisco's approach, acquiring a company and then repackaging and selling the technology, will be too complicated for typical users trying to make products work together.
Microsoft isn't focusing much on Skype as a competitor, Pall said. The Internet-phone service company has more appeal as a provider of free overseas calls than as a business tool, he said.
