Unified Communications (UC) market, up until last year, was mainly software based MS Vs. Cisco's network hardware. But now with prospect of rising market, signs of 'collaborate with one another to compete' are emerging.

In mid January last month, Microsoft and Nortel following their strategic UC alliance earlier announced launching of its first product offering from result of their partnership. It's a joint Unified Messaging offering that provides interoperability between Nortel's Communication Server 1000 and Microsoft Exchange Server 2007, an implementation of the industry standard SIP (Session Initiation Protocol) which will be due later in the second quarter this year.

Also due later in the fourth quarter of 2007 are the UC Integrated Branch and a new Conferencing offering. The new Conferencing offering will deliver the functions of Nortel's Multimedia Conferencing product in Microsoft Office Communicator 2007. One great advantage, the UC Integrated Branch will provide a single hardware device that combines routing, switching; No need for additional gateway or router when running MS Office application.

"LG-Nortel has yet to receive the specifics from Nortel. However, thanks to the consistent R&D efforts from both MS and Nortel, it has enabled cost-effective product, one that does not require gateway and same time provide investment protection and minimum restrictions. Microsoft, thus has gained great advantage and as the key engine to future growth in UC market." Said Song-hun Oh, an assistant director LG-Nortel.

MS-Nortel alliance, asserting pressure on IPT firms
It’s clear that Microsoft's entry into the UC market and subsequent alliance with Nortel is affecting major brands such as Cisco, Juniper, Avaya, Siemens and most IPT vendors and MS’ application competitor IBM.

When it comes to the market share, MS dominates e-mail, messenger, and Office sectors which are critical part of running UC application. "MS has the distinct advantage in UC. There’s licensing issue for the enterprise environment but without Windows OS which is widely used by industry, could create number of compatibility issues. There is no denying that MS has the upper edge with growth in the market." said, manager Han-woung Lim of Alcatel-Lucent.

Naturally, most of IPT based vendors look to join up in partnership with MS. Alcatel-Lucent, Avaya and Cisco also remain in partnership with MS to gear up for future moves. We could see a release of a unique product with MS-Nortel alliance but it won’t be a huge problem, sources said.

Look for more alliances between MS-IPT vendors beside Nortel.
Cisco also looks to be altering their strategies -- continuing to cooperate with Microsoft. In Korea, clearly the rivalry between Microsoft and Cisco exists although Cisco has never acknowledged.

"We are not competing against MS. Most of our UC applications are developed with MS base in mind. Thus far both companies are headed for different markets" and "It is up to the consumers to choose. I suggest it is inappropriate to use the word competitors. Rather, alliance is better description, an indication of natural course of action with flow of current market." said, Kyung-ho Yang, director of Cisco Korea.

In conclusion, even if unique UC solution was made available as a result of the MS-Nortel partnership, it will be considered as just another product and therefore insignificant. And in order for MS to enter into UC market, it will have to partner up with many IPT vendors to keep alliance.

However, considering the infancy of present domestic Korean market, most companies will try to adapt same global strategy of their parent companies and it will be hard for them to deny the pressure from MS-Nortel competition.

A CIO of one US construction firm who considers to bring in Cisco's IPT solution but hesitated upon MS-Nortel alliance said, "Cisco has its own client software, and it would have required a big change. Cisco says you can integrate their solution with Microsoft, but it still would have been a headache for my IT guys. And like they say, Time is money." is showing a thumb down according to CNET.

IBM looks to hookup with Cisco to counter MS
Meantime, IBM, looks to be on head-on course with MS, as a main competitor in its application side. As a counter move to MS’ UC main strategy 'People-Ready' (single platform for all communication technology) it came out with 'Ready for business' strategy. This too reveals strengthening of the partnership with Cisco, Siemens, Lucent, Avaya and IPT vendors.

Especially, continuing a close tie with Cisco with targeting both IBM Lotus notes based messenger 'Sametime' users and ones looking to bring in Cisco IPT as a main marketing strategy. It seems the company is building strong relationship on current ‘sametime’ clients to prospect future upgrade to Cisco IPT.

An IBM affiliate said, "MS and IBM will solidify competition in the UC market. To compete with MS with its alliance Nortel, we will base from eclipse, an open source, open policy to all IPT vendors to strengthen our partnerships."