Bill Gates says today's systems are like mainframes before PCs and software changed everything. Cisco agrees—and aims to win the race
by Aaron Ricadela, Technology, Businessweek
The way Bill Gates sees it, Microsoft has the chance to upend business communications the way it did when the PC supplanted centralized computer systems in the 1980s.
On Oct. 16, unveiling new Microsoft software that can tie together phone calls, e-mail, and video conferences, Gates drew an analogy to IBM's once-popular mainframe computers: All the features are built into a single product, controlled by a single company. The situation is similar, he said, to the traditional office telephone systems sold by Cisco Systems, Avaya Communications, Nortel Networks, and NEC. "We've seen this before. This is just like the computer industry before the personal computer came along," said Gates. "This has been its own world, untouched by the power of software."
To capitalize on this purported opportunity, Microsoft is looking to exploit the dominant position of its Office suite, providing extensions to those business-productivity tools to perform many of the same tasks as traditional phone systems at perhaps three-quarters the cost. To spur uptake, it's encouraging partners—including Dell, SAP, Ericsson, and even traditional phone-system vendors such as Nortel—to create their own compatible software and sell installation services for the new products, dubbed Microsoft Office Communications Server and Office Communicator.
Instead of selling an end-to-end system that directs calls to the proper extensions, stores an employee directory, and connects conference calls, Microsoft will embed those features in the new software to interact with its e-mail, word processing, and mobile-phone applications, as well as programs made by partners. "We've got a very different way of being able to do things," Gates said.
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