Microsoft UC Launch: Office Communications Server 2007 Hits the Market

| October 18, 2007 | Enterprise Communications | Competitive Intelligence Report

| Analyst: Rob Arnold

Current Perspective: Positive
Vendor Importance: Very High
Market Impact: Very High

Event Summary

On October 16th Microsoft announced the worldwide availability of its unified communications products, including Office Communications Server 2007, Office Communicator 2007, Office Live Meeting 2007, Roundtable, and a service pack update of Exchange Server 2007. More than 50 partners joined Microsoft to announce new products and services built on Microsoft’s unified communications platform. These partners include the following: systems integrators, telephony providers, Nortel, Ericsson, Mitel, independent software vendors and phone and device manufacturers.

Analytical Summary

• Current Perspective: Positive on Microsoft’s making Office Communications Server (OCS) 2007 generally available, because the company is now delivering a unified communications solution with more robust capabilities and more advanced call features to businesses off all sizes. Microsoft customers and partners can now move forward with their support and deployment of a Microsoft product that has been in development for more than a year, while Microsoft can now try to prove that it can effectively compete as a developer of VoIP solutions.

• Vendor Importance: Very high to Microsoft, because even though it was pre-announced and is an upgrade to an existing Microsoft product, OCS and its Microsoft-designed handsets and video system is a milestone for the company marking its official entry into voice communications markets.

• Market Impact: Very high on the enterprise communications markets, because Microsoft has a vast array of assets for use in becoming a very disruptive force in any market. The company has already developed a groundswell of support from many communications product developers, despite the direct competition OCS may present to their alternative enterprise voice, messaging, conferencing and presence solutions.

Recommended Competitor Actions

• PBX developers should continue working with Microsoft to integrate their voice and conferencing systems with OCS. Customers with in-house Microsoft application expertise, significant investments in Microsoft technology, and interested in using OCS for corporate instant messaging will demand integration with OCS from their PBX systems suppliers.

• PBX developers able to deliver unified communications solutions without the help of Microsoft software should highlight the advantages of sourcing telephony, instant messaging, and other communications products from a single vendor. This is much the same argument that Microsoft will use to market its unified communications offerings, and there is no reason PBX developers should not do the same.

• PBX developers selling unified communications solutions that rival OCS should note Microsoft’s general lack of experience with voice communications and the rather unimpressive call processing capabilities that seem to be included in the first iteration of OCS.

Recommended End-User Actions

• Enterprise buyers should remain highly skeptical of Microsoft claims that OCS can serve as a viable alternative to traditional voice systems until the company can provide better proof points in this regard. Until it becomes more clear that OCS can in fact serve as a PBX alternative, enterprises should treat OCS as primarily an instant messaging platform with comparatively limited voice capabilities.

• Enterprises without a significant investment in Microsoft business applications and those preferring Linux servers over Windows have plenty of unified communications options to choose from. 3Com, Avaya, Cisco, Alcatel-Lucent, Nortel and Interactive Intelligence all have mature unified communications solutions that are not dependent on Microsoft’s LCS/OCS for the instant messaging and presence component.

Top