Microsoft's Gates: Say Goodbye to VoIP As You Know It

Later, in a conversation with CMP Channel Assistant News Editor Jennifer Hagendorf Follett, Gates said Microsoft channel is evolving to meet the new opportunity, but noted that channel capacity could be the biggest challenge the Redmond, Wash.-based vendor faces as it moves into the unified communications market against foes like Cisco Systems. He also downplayed the likelihood of Google and open-source VoIP staking a claim in the enterprise space, and revealed how his own work life has changed as a result of the technology.

Edited excerpts of the conversation follow.

Why does Microsoft need to be in the VoIP market, and when did you first determine that was the direction you needed to go in?

Gates: We're all about the magic of software and improving the kind of experiences and productivity people can have by providing software. So we've got, of course, Windows PC, we've got Office Server, we've got Exchange and SharePoint, on the mobile phone we have Windows Mobile, and as we looked at a scenario that we could improve dramatically, the telephone just kept coming up. It was actually a little over five years ago that I had some of the top engineers move over to work for Jeff Raikes [president of Microsoft's Business Division], and he created this new business area. People like Gurdeep Singh Pall, who's the head of engineering, moved over from the Windows networking team. So we built a team, there were a few acquisitions, very small but that was an element of it ... but now is the first time we've got a solid product line, so it's the opportunity to bring telephony into this world so that you only have one directory and have all this flexibility that whenever you see someone's name, getting their presence, being able to get in touch with them, not having to worry about phone numbers.

In some sense you could say it's interesting how long people have wanted to stay with their traditional PBX because it even though it wasn't well integrated but it kind of worked. Now we're showing people an evolutionary way to get these benefits when they choose. They can actually drop the PBX all together and just have software running on the Windows server.

You mentioned that earlier from the stage, and I'm wondering, what does that mean for your partners like Mitel or Nortel who have those IP-PBXes in their portfolio?

Gates: Well Nortel is a good example as is Mitel ... Their skill sets include working with people in different industries, so they're willing to take their software and put it up on top of our horizontal platform. Now that's a big restructuring for them; it's a big leap to organize themselves for this new, more horizontal, software-focused structure, but they're taking that leap. They see that as a good opportunity, so their assets carry over into this world. Sometimes when you get an industry structure change like this like we did in computing with the personal computer, now 30 years ago, the traditional vendors have a tough time making the transition. Sometimes you have changes like this and people realize what they have that's unique that they should double down on.

NEXT: Can Microsoft get VoIP right the first time?