Microsoft-Nortel Alliance Augurs Partner Opportunities

Microsoft and Nortel Networks executives said Tuesday the companies' alliance to unify business communications in software will create sizable service opportunities, including for channel partners.

Under the wide-ranging Innovative Communications Alliance announced Tuesday, Microsoft and Nortel said they will collaborate on research and development to converge voice and IP networking services with software. Their goal: To replace the traditional desk telephone with a software communications platform and graphical user interface that unifies e-mail, voice mail, instant messaging, audio/video, telephony and voice-over-Internet call processing.

Plans call for Microsoft and Nortel to develop joint sales and marketing programs, including a training and sales incentive program for their respective sales forces, as well as to build an ecosystem of ISVs, systems integrators and telephony partners to deliver joint solutions to customers.

Although Microsoft and Nortel said they will tap into their solution provider channels to build that ecosystem, it's unclear which products, solutions and services partners will be authorized to sell.

Nortel, however, is positioned to take a big bite out of the services business that results from the partnership. According to a statement issued Tuesday, for example, Nortel is identified twice as Microsoft's strategic partner for advanced communications solutions and as the strategic systems integrator for Microsoft's unified communications platform.

In a conference call Tuesday, Microsoft CEO Steve Ballmer applauded Nortel's willingness to create a systems integration division focused on Microsoft's unified communications platform and Nortel's plans to deliver new applications and infrastructure to the market.

"This means our customers can and will quickly evolve from a traditional phone system to a unified communications platform," Ballmer said. "Systems integration services from Nortel mean customers can deploy these capabilities knowing they have a trusted and expert voice provider to rely on. "

The Toronto-based networking and communications company said it has an aggressive plan to derive significant service revenue from the partnership. It projects more than $1 billion in new revenue through 2009 from professional services, voice products and applications, and data pull-through in the enterprise.

When asked if most service and product revenue will go to Nortel, Ballmer said there will be plenty of opportunities in the small- and midsize business market for traditional Microsoft partners, as well as for integrators focused on its unified communications platform.

"We want our partner channel to engage. Nortel will try to touch the global 1000, but there are hundreds of thousands of businesses. And the only way to do that is through a strong [systems integrator] channel and from the broad channel that we court," he said.