Is That Microsoft Calling?

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's 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 private branch exchanges (PBXs) 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 don't 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 PBXs 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 and 30 percent of that spending will go toward applications, IDC estimates.

Cisco Systems' acquisition of Latitude Communications, announced earlier this month, 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.

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