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Tuesday, October 16, 2007 - Page updated at 12:00 AM

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Microsoft looks to link tools for communication

Seattle Times technology reporter

Microsoft executive Gurdeep Pall can scroll through his contacts list and see whether his staff members are on the phone, in a meeting, out of the office or eagerly awaiting his call.

With a click on his secretary's name, he calls her. He adds other staff members to the call by dragging and dropping their names from his contact list. Then he shares a table clipped from a spreadsheet, which everyone can see on his or her own computers.

"From a collaboration perspective, these are the kinds of tools you need today, as opposed to dealing with cumbersome ways of getting into conference calls," said Pall, a Microsoft vice president in charge of the software he's demonstrating.

His desk phone has no numbers. He makes calls from his computer. His conference table has a 360-degree video camera that can record the gestures and facial expressions of everyone sitting around a meeting table and transmit it to colleagues thousands of miles away.

This is the office equipped for unified communications, a new set of products Microsoft Chairman Bill Gates will help his company launch today.

Microsoft will compete with telecommunications and networking giants Avaya, Nortel and Cisco Systems, and several smaller companies trying to gain a share of the unified-communications market — which really encompasses several lines of business, including voice calling, e-mail, instant messaging and video and Web conferencing.

The promise of unified communications is in combining all of those modes of communication and selecting the one most appropriate to reach someone based on the person's current situation.

If Pall needs to reach people who are out of the office, instead of looking up their cellphone number he can click on their name and the system automatically dials.

The software is also built to work closely with applications such as Outlook, which automatically draws information from an individual's calendar to set his or her presence. If Pall has a meeting at 2 p.m., everyone who looks him up in the directory will see that and refrain from calling him and send e-mail or instant messages instead.

Henry Dewing, principal analyst at Forrester Research, said businesses are very interested in these capabilities. When they hear the term "unified communications," however, they don't necessarily know what it means or how they will benefit.

The benefit, he said, comes from increased efficiency when easier communications are built in to business applications. A salesperson, for example, can e-mail contacts from within software for managing customer relationships, rather than closing that software and opening up an e-mail program.

Defining the size of the unified-communications market is tricky. Microsoft Business Division President Jeff Raikes has called it a $40 billion opportunity.

But analysts said much of that market is money that companies already spend on various communications technologies united by the new software.

"The bottom line, billions and billions get spent every year on communications, e-mail, instant messaging, voice mail, video conferencing, etc., and unified communications promises to make those investments more productive," Dewing said.

Zeus Kerravala, senior vice president of global enterprise research at The Yankee Group, said unified-communications offerings could open up related markets to competition.

"All of the things that you can do with unified communications we do already," he said. "The thing that makes it interesting is vendors easily slide into tangential markets and take share. ... If a vendor does crack that code and find a way to address all those other tangential markets, there's a lot of upside to gain."

Microsoft's software-centered approach to the market is different from its largest competitors.

Cisco, which dominates network equipment much the way Microsoft dominates operating systems and productivity software, is building out unified-communications offerings from its position of strength, Kerravala said.

"I think what we're headed for here is a bit of a holy war" between Microsoft and Cisco over whether unified communications should be based on software or networks, Kerravala said.

He and other observers dismissed an event in August at which Microsoft Chief Executive Steve Ballmer and Cisco CEO John Chambers pledged to work together.

"I think that was just a matter of show," Kerravala said. "Customers I talk to would like to use both Cisco and Microsoft. Neither has made it particularly easy to use both."

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

Copyright © 2007 The Seattle Times Company

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