Taking on the PBX

Microsoft Chairman Bill Gates and Microsoft Business Division President Jeff Raikes launched the business communications software at the Bill Graham Civic Center in San Francisco, Oct. 16.

After months of anticipation, Microsoft Corp. officially unveiled its unified communications software in late October, and officially declared war on the PBX.

Microsoft Chairman Bill Gates says the package available via Microsofts certified VAR and systems integrator channel represents nothing less than a massive disruption in how telephony works. Its a transformation of the traditional PBX, he said at the launch event, making no bones about his target. Its about the ability to bring in third parties, and by moving phone calls into the Internet we gain far more effectiveness in how companies work, both inside and with partners and customers.

To wit, the suite of software includes Microsoft Office Communications Server (OCS) and its client, Communicator, which give businesses access to VoIP, video, corporate information and applications, presence information, text, instant messaging (IM) and third-party applications available across home, business, customer, partner and mobile networks. Its software-based, and works within the context of Microsoft Office. For instance, imagine moving the mouse over the authors name in a report, initiating a pop-up window with presence information and click-to-call, IM and video chat capability.

The vendor also announced Microsoft RoundTable, a $3,000 video conferencing device that has a 360-degree camera that captures a panoramic view of meeting participants, tracks the speaker and can record meetings. And, the suite includes a new version of Microsoft Office Live Meeting and an update to Microsoft Exchange Server 2007.

Oh, and OCS also will save users 20 percent to 30 percent in costs over more traditional voice systems, while bolstering productivity, Microsoft says.

Whats this all about? Gates asked rhetorically in his keynote. Microsoft is all about the magic of software taking software and letting people be more productive and creative. Today we are taking the magic of software and applying it to phone calls. He noted that the new software takes the phone call far beyond what one typically considers a call: The PBX has been in its own world and untouched by the magic of software. So that central software innovation is being brought to the business telephone experience.

And that means that the PBX had better watch its back.

Microsoft RoundTable integrates with Microsoft Office Live Meeting to provide a 360-degree panoramic video conference. Microsoft Office Communicator 2007 includes customizable presence options. Microsoft Office Communicator 2007 features a Conversation History folder.

He went on: We can look around the office and say theres been a lot of change that has taken place, Gates said. Every 10 years or so what you think about the personal computer has been very different, for instance. He noted the evolution from DOS to GUI-based systems to the Internet, and noted the parallel path the mobile phone has taken from briefcase to credit card-sized handsets, with ever-higher processing power. But the office phone, pretty much the same, he explained. It has lots of buttons, and you say wow, I wonder who uses those buttons? Its so opaque and you dont like dropping a phone call, so people dont use the features. So it really jumps out as the element in our life of rich communications that needs to be changed. The phone call is the one thing not yet pulled in and subject to the hardware and software revolution.

In fact, the hegemony of the PBX is so bad, Gates said, that only one in three workers have successfully transferred a phone call, and even fewer have been successful at a conference call. The PBX, he said, is in its own world, and untouched by the magic of software, while the desk phones had a special relationship with the PBX and no other communications. Also, until now, telephony has been a function of purchasing through one company, in a vertically integrated fashion, end-to-end. That model worked fine because the pieces worked together and there was a fairly large market, said Gates. But once you picked a PBX vendor, that was it. If you move a phone, they say wow, now were making money off of you, rather than initial sale, he added, citing that Microsoft was spending more than $700 and one week to set up a new office. That was a real point of frustration because we think of it as a new entry in the directory, where you type in new extension and the persons ready. Now we have standard servers running a software platform that uses SIP and has the ability to connect in other pieces of software.

Taking a look at the functionality in the software illustrates the point. Jeff Raikes, president of the Microsoft Business Division, has an issue with dialing blind, phone tag, voice-mail jail and disconnected communications; and notes that the average worker spends 37 minutes per week dealing with voice mail, which adds up to 30 hours per year of lost productivity. We want to put identity and presence at the core, he says. I dont want to get in touch with your phone number; I want to get in touch with you.

And so, Microsoft OCS means that remote users can call into Microsoft Exchange and use interactive voice commands e-mail, voice mail, main menu etc. to have email read, listen to voice mail and schedule a calendar item. Communicator Mobile, available on Windows Mobile devices, provides presence information and contact information, with click-to-call capabilities. From within Microsoft Exchange, a user can see presence information and send an IM from Exchange. The IM subject line is picked up automatically from e-mail, and a link is included that the recipient can click on to read the original e-mail in question. A user can also click to call from within an IM conversation, connecting via a softphone on the laptop, and he or she can conference in third parties by dragging and dropping names from a buddy list with presence. The participants also can add one-click video to the multiparty call thanks to the Web cam. People can be disconnected from the call with a right-click.

The software also will integrate with upcoming versions of Microsoft Dynamics ERP products and the Microsoft CRM release due later this year, and will be able to integrate with third-party applications via SIP. For instance, take a digital records application. With OCS integration, when a customer calls for service, her information could pop up on the screen, so as the call is passed around, the relevant information should be passed around as well.

Will Microsofts push into the PBX space sound the death knell for folks like Cisco Systems Inc. and Avaya Inc.? While those vendors are entrenched deeply with large customer bases, Raikes remains bullish. He predicts that within three years more than 100 million people will be able to click to communicate, at a 50 percent less cost. But it seems to be an if you can beat them, join them scenario, as evidenced by the more than 50 partner announcements that were made in conjunction with the Microsoft OCS launch. Notably, Nortel Networks confirmed pending availability of five software-based solutions and applications to enhance OCS as part of the Innovative Communications Alliance. Nortel also said it is on track to more than double the number of OCS-certified engineers in its UC systems integration practice. Ericsson announced the Ericsson Enterprise Mobility Gateway, which will be built on VoIP call management in OCS to bring office communications to any mobile device. Mitel Networks Corp. meanwhile announced plans to develop a software-based solution that leverages OCSs VoIP call management capabilities to meet the specialized telephony needs of SMBs in vertical markets. Conferencing leader TANDBERG also announced its plans to build a video- and Web-conferencing solution incorporating Microsoft unified communications software, and SAP will build presence and click to communicate functionality into Duet, the joint product it developed with Microsoft to allow users to tap SAP software via Microsoft applications. Now you can see rich presence and SAP info side by side in the Office suite, says Raikes, so you have critical information at a glace.

And, Cisco said in August that it would team with Microsoft to provide interoperability between their systems. Whether the rosy outlook turns out to be correct is not yet determined, but VARs would do well to keep an eye on whether the PBX becomes an endangered species.