Microsoft Gears for Unified Communications

Tuesday, 16 Oct 2007 | 1:51 PM ET

Microsoft said Tuesday it expects its unified communications product - the company's effort to link e-mail, instant messaging and phone systems over Internet networks - to become one of the fastest-growing segments of its $16 billion business division.


Revenue growth from unified communications will outpace "by a multiple" that of the overall Microsoft business division, which had revenue growth of 13 percent in fiscal 2007, said Jeff Raikes, president of the business division.

Raikes did not offer specific figures during an interview ahead of a launch event for its Office Communications Server 2007, which allows users to e-mail, instant message, video conference or make Web-based phone calls from within the company's Office applications.

"When you can integrate voice and video into the fundamental Office productivity work that you do, it really changes things," said Raikes.

Microsoft and Cisco Systems are both targeting the multibillion transition of office phone systems to Internet protocol networks.

Microsoft sees software at the center of that transition, while Cisco wants to cash in on years of experience making telecommunications equipment such as switches and routers.

"Customers don't care about the fact that you are changing the plumbing," said Raikes. "You change the plumbing only for what you bring in terms of new value and that comes with software and that's where our strength is."

When asked how a possible slowdown in technology spending could affect demand for the new unified communication product, Raikes said he expects a slowdown not to have any effect because the product can save companies money in travel and phone implementation costs.

Raikes, who said Microsoft's business division is doing well, declined to comment on the overall outlook for technology spending.

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