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

Gates: Well, customers all have different requirements, and I think that channel capacity to really assess those customer requirements and match not just our software piece but also the applications and the hardware to what that customer needs, I think that will probably be one of the limiting factors in how quickly this rolls out. I think it's going to roll out very quickly, but I think that will be one of the governing factors. I completely agree that the channel capacity in the U.S. is limited because it's an explosive area, so of course there weren't a bunch of people sitting around who were VoIP experts ... I'm not personally an expert, but we may have to get creative about the training opportunities and learning opportunities that there are.

There's a growing open-source community around VoIP right now. Do you expect that open-source will take on as big a role in voice as it has in some of the other technology areas you're playing in?

Gates: Well it hasn't taken on a big role in most areas. Take a look at virtual machines or databases or things like that. Go back and look at the prognostication about the role they would play. The value of support and having the relationship and the way that packaged software certainly from us and some others is sold in a very high-volume, low-priced way. There's always an interest in open-source. Open-source will always be there. I'm not saying it's going away, but in terms of what's actually used in many of these categories, it's actually proven to be very, very small.

And you're expecting to see the same in VoIP?

Gates: Well in consumer voice, Messenger is free, Skype is free, so at the consumer level, it doesn't have to be open-source but you've got a lot of free options. But as you move up and you want the encryption, manageability, connection to the directory and just that incredible relationship ... I think this would be a category that's particularly difficult for open-source software to have an impact on. You never know.

You also have the ResponsePoint line, which is aimed at smaller business. How is that going to be brought together with what you're talking about here today?

Gates: We'll definitely bring it together, but ResponsePoint is about a super simple to buy and install offering where you're not bringing in a bunch of third-party software that's unique to your type of business. It doesn't have a gigantic check list of features. It works super well. It's the easiest thing to set up there's ever been; it's the easiest thing to use there's ever been. There are common technologies between ResponsePoint and Office Communicator. We see some good cross-fertilization there, but that is on-premise, simple, it does exactly what it says it does. It's not a platform-type play. It's pretty clear which customers should look at ResponsePoint vs. which should look at Office Communciator. Over time as we grow Office Communicator down and we grow ResponsePoint up, you get three to four years out and they'll become a single product line. But today it's kind of bi-polar in terms of who they address.

How would you say using unified communications has impacted your own business life?

Gates: For me, say I want to get a hold of Steve Ballmer, if he's busy, then I can just look at his calendar, and because of my connection where he's declared a relationship, I can see free time and schedule time. His presence is available to me. I tend to work odd hours, on the weekends. Sometimes I don't want to be interrupted, sometimes I'm just sitting doing e-mails and if someone needs to call me, I can offer that. And presence is the tool that makes that very straightforward for me.

I'm a very heavy e-mail user. I send and receive a lot of e-mails. I use SharePoint a lot. You might be surprised internal to Microsoft that phone calls, although they're important and they're done, they play less of a role than they would in most companies ... Seeing the RoundTable [videoconferencing unit] come in has been great. We do our board meetings using Live Meeting because we have board members who sometimes can participate but not be in the same location, particularly our interim meetings.

Has Microsoft actually cut its own travel budget as a result of rolling out unified communications?

Gates: Yes. There are a ton of trips we can identify that even going back over the last couple of years with Live Meeting, it's just something we take for granted, that we've been able to reduce. Also because we have development centers all over the globe, there's a lot of communication taking place at fairly unusual hours. So if I'm in a hotel room and I've got Office Communicator and have connected up my PC, I can make and receive phone calls and I'm just going over the Internet. I'm not paying extensive roaming charges like if I picked up my cell phone. So for those who are collaborating internationally, this software has been a huge benefit for them.

What would your advice be then to channel partners that are following you into this market?

Gates: They should assess how they can get customers to think about the productivity benefits or the cost-savings here. This change allows both productivity benefits and cost-savings. If you leave the PBX in place and put the software on the side, then you're driving the productivity benefits. You could get some savings by having more calls be over the Internet and get some savings by connecting up to mobile phones. There are some plans where over time the desktop phone is modernized and others where the desktop phone basically disappears because between your mobile phone and the big screen on your Windows PC, if you're doing collaboration or customers interfacing you want the big screen. If you want the mobility, then obviously your mobile phone comes in. So they have to assess for their customer base, are they seeing these opportunities? The reason things are exploding now is that there's this phenomenon that when some customers start to do it and talk to other customers, then the willingness just jumps up dramatically. To be frank, the reliability of VoIP phone calls has been very high for some time, but the richness of the software in terms of the release we're doing now, and the sense that boy, everybody's moving to do this wasn't there. Now, it's pretty clear and this way you can evolve into it.

Partners will always be driven by the customers that they know, the industries, the area. For some partners this will be a chance to go out and get new customers because the number of people who really understand how to help customers do these things will be quite small for the next couple of years relative to the opportunity.