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Microsoft's Next Great Software Gambit

It was back to the future for Microsoft today. The company's chairman and co-founder Bill Gates took the stage here to help launch the company's Unified Communications (UC) software. In other words, he was here to talk phones.

Gates told an audience of about 2,000 customers, partners and media that office phone systems haven't changed much in the 30 years since the first crude personal kits were launched. Putting aside advances in mobile phones, he said office phones have added a lot of buttons that people don't know what to do with, and small screens that don't provide a lot of information.

"At Microsoft, we spend $700 to give someone a new phone when they move offices, and it takes about a week," Gates said. "It should be as simple as updating a name in a directory."

Simplifying the task in just such a way is Microsoft's goal with its new Office Communications Server (OCS), which also offers the ability to add VoIP, video, instant messaging, conferencing and presence to Microsoft Office applications.

For a large company, the potential savings in time and money from Microsoft's UC solution can be substantial, it said. The software giant's own general manager of unified communications marketing, Kim Akers, said about 20,000 Microsoft employees change offices each year, representing a tremendous potential cost -- unless businesses switch to a UC solution.

"Eventually, the PBX goes away," Gates said. But he also discussed the hefty investments most companies have in their current PBX systems, adding that OCS can complement those legacy systems to help smooth the transition.

Microsoft has even enlisted major PBX makers to support its initiative. Nortel Networks, Ericsson and Mitel Networks all announced next-generation software applications that would build on Microsoft's voice platform. Nortel already has numerous joint deployments with Microsoft to early customers.

In all, some 50 companies today announced new products and services based around Microsoft's UC platform.

Microsoft also said 155 customers with 300,000 users are already using early versions of Office Communicator 2007 client software. Intel represents a big hunk of that total; Microsoft said the chipmaker has moved all of its 104,000 employees to the platform.

Tim Berquist, a network engineer with Joslyn Sunbank Company and a Microsoft Certified Engineer, said he was impressed with what Microsoft showed. His company uses Cisco networking products that he said can be cumbersome to integrate with Microsoft Exchange.

"There's a lot we can do to make it work better, but it's expensive," Berquist "I like what Microsoft is showing because we run a lot of meetings with remote customers and the ability to simplify the process and [add] features like presence would be helpful."

Jeff Raikes, president of Microsoft's Business division, expects a dramatic uptick in the adoption of unified communications technology. He said that "in the next three years, more than 100 million people will be able to click to communicate from within applications. He also predicted infrastructure costs will be half of what they are currently.

Today was also the official launch of Microsoft's RoundTable, the $3,000 videoconferencing system the company has shown previously in prototype. "We really see this for customers of all sizes, from small businesses that want to collaborate better, to big business with multiple locations," Gates said.

Microsoft sees communications devices merging: one phone number, one identity.

Gates further discussed collaboration and the changes afoot in communications technology in a message sent to key customers earlier today. In the e-mail, he said communicating remains so complex because we're hampered by disparate devices.

"In the office, we use a work phone with one number," he wrote. "Then we ask people to call us back on a mobile device using another number when we are on the go, or reach us on our home phone with yet another number. And we have different identities and passwords for our work and home e-mail accounts, and for instant messaging.

And as more of our communications and entertainment are transmitted via the Internet, he said, a new wave of software-driven innovations will eliminate the boundaries between various modes of communications.

"You'll also have more control over how you can be reached and by whom: when you are busy, the software on the device at hand will know whether you can be interrupted, based on what you are doing and who is trying to reach you," he said.

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