Answer the phone; it may be Microsoft

Microsoft is bound to play a growing role in enterprise telephony systems over the next few years, helping them to evolve beyond the simple features such as speed dial, conference call and voice mail most companies know today. What is less clear is what that role will be.

The Redmond, Washington, software giant is likely to muscle in on the territory of traditional vendors of PBXes (private branch exchanges) and even threaten the desktop handset, through PC-based "soft phones," according to some industry analysts. However, Microsoft and some major vendors in that market say they do not see themselves on a collision course. Microsoft may increasingly provide the platform software for telephony, but more specialized vendors will write the applications on top, they said.

It may be a tempting target: Counting both the servers and clients in this category -- IP (Internet Protocol) PBXes and handsets or soft phones -- IP-based telephony products worldwide should bring in $6 billion per year by 2008, according to IDC analyst Tom Valovic, who earlier this year wrote a report on Microsoft's possible future in this market. Between 10 percent and 30 percent of that spending will go toward applications, IDC estimates.

Cisco Systems's acquisition of Latitude Communications, announced last week, may be a step up the software stack toward what has been Microsoft's territory in the data world, some analysts said. Latitude makes audioconferencing, videoconferencing, and Web-based collaboration tools.

A Microsoft move deeper into telephony and communications software could place complex decisions in the laps of IT executives who are used to dealing with one vendor for telephony systems and others for data applications, Valovic said. Microsoft could be part of a coming shakeout.

"Life will probably be initially more complicated but eventually more simple," he said. "There's going to be a transition of vendors. We don't know which vendors are going to be the winners and who will be the losers."

At the same time, telecommunications departments and IT groups will need to work out where the new telephony infrastructure should go, said analyst Zeus Kerravala of The Yankee Group. The same functions may be available on traditional computing platforms and on network platforms such as routers, he said. A company should not do it two different ways.

What's most disrupting to the once staid business of enterprise phone systems is voice over IP (VOIP), which makes phone calls into data packets. The special requirements of transmitting the spoken word finally are being met by prioritization systems that can set voice apart as it flows over the same network as other packets. Basic IP networks send data packets without regard to exactly when or in what order they arrive. Thus, the decades of organizations having two totally different networks are slowly coming to an end, vendors and industry observers have said.