Microsoft won’t compete with telcos on applications

Microsoft has claimed it has no plans to compete with telecommunications carriers and providers, despite predictions made in February by IDC.

John Hennessey, a telecommunications industry manager at Microsoft, said that, while Microsoft was certainly targeting increasingly telecommunications-related applications, the vendor had no intention to expand into hardware or otherwise directly compete with telcos.
'That's certainly not the plan whatsoever,' he said.

However, Hennessey said what Microsoft was doing was developing functionality in the Windows operating system so organisations could develop and deploy new applications that lent themselves to Session Initiation Protocol (SIP) and thus to emerging telecommunications technologies such as Voice-over-IP (VoIP).
'It's certainly not a competitive stance. It's actually a co-operation,' Hennessey said.

IDC Australia released a statement 9 February predicting that the software giant would be competing with telcos within two years.

Landry Fevre, a telecommunications research program manager at IDC, claimed that continued growth in sending voice over data networks using SIP would position Microsoft as a competitor to networking hardware vendors such as Cisco, Avaya, Alcatel, Siemens, Mitel, Nortel and 3Com.
'Even though the market remains embryonic today, it will be all about software and who else but Microsoft is best positioned in this market?' Fevre said.

A recent Fevre study, 'Australia VoIP Services Forecast and Analysis', suggested VoIP would continue to be a centrepiece of 'next-generation' networking. The VoIP services market was expected to nearly double every year for a total four years -- from $14.3 million in 2002 to $288 million by 2007.

The compounded annual growth rate was expected to reach 62 percent, the report said.

In three years, SIP would be as disruptive to traditional telephony and carriers as the PC had been to mainframe technology in 20 years, the Fevre report claimed.

Microsoft's Hennessey agreed that voice-and-data was going to dramatically alter communications, especially as convergence accelerated around internet-based functionality such as Instant Messaging (IM) and VoIP.
'Key is the location of the individual and the location of the information that individual is trying to access,' he said. 'You need to be able to use that in a more efficient manner. Our relationship with telecommunications becomes more and more important.'

Microsoft's role was to produce software that could facilitate that transformation, Hennessey said.