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Summary:

Microsoft’s Steve Ballmer and Nortel’s Mike Zafirovski are an interesting pair. They’re both tasked with revitalizing companies and bringing innovation to their institutions and have faced significant hurdles in recent months. The companies are holding a joint press conference to announce a partnership and outline their […]

Microsoft’s Steve Ballmer and Nortel’s Mike Zafirovski are an interesting pair. They’re both tasked with revitalizing companies and bringing innovation to their institutions and have faced significant hurdles in recent months.

The companies are holding a joint press conference to announce a partnership and outline their plans for communications like VoIP and IM or what they like to describe as “unified communications.” Is it really a big deal? Who knows, for both companies are looking desperately for good news.

Beleaguered Nortel has far more troubles than even Microsoft and its EU fine–I spoke with Mike Zafirovski earlier this year and he described his mental state as “forceful optimism.” Nortel’s stock is just above $2 today, but rose in recent trading this morning. Nortel will likely benefit from the team, as the company needs more business software deals. But we’ll just have to wait and see how much of an upside Microsoft will get.

Update#2: The details of the joint annoucement are here. Still not clear what these two companies will do together, and hard to decipher the pr-speak.

Alec says, “public cloud presence plays, like Tello, are going to come under pressure as a result. For now, the alliance’s focus on enterprise and carrier means that there is plenty of room to innovate, even though the stakes have just become higher.” Also, this cannot be good news for Cisco and Avaya. (Any thoughts?)

Update: Nortel exec Richard Lowe also wrote this story on the differences between WiFi and 3G, while Wi-Fi Networking News’ Glenn Fleishman takes it down a notch. The title says it all: “Nortel Exec Pens Bizarro World Column on Google WiFi.”

  1. I believe this is excellent for both Nortel and MS. I also think Cisco is looking on and scratching their head. Cisco is playing-out as a loner in the big picture.

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  2. Wow, the more I read and think about this deal, the more dyanamic it really becomes. Microsoft really needs a tight association with a real telephony company to get validation and respect in the telephony world. Nortel gets to hug the desktops of virtually every business in the world. This could have been a merger IMO.

    This is big!

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  3. Nortel are picking the food from the teeth of a crocodile. They’re not going to ultimately be able to stay in the apps space. Their traditional PBXs and deskphones have been pretty terrible. I suspect we’re eventually going to see an invasion of consumer-like companies and products into the enterprise, because (i) they’re far better, and (ii) a whole generation of new users will expect to stay in touch with their extended networks, most of whom will be outside the enterprise. The IT/telco manager are value-subtract, and they’re the people buying this kit.

    If I was Nortel’s big boss, it would be all about delivering tons of bandwidth at incredibly low costs absolutely everywhere. Forget the rest.

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  4. http://www.newheights.com/mediacenter/press/2006/may25_2006/

    I think the above predates the MS Nortel arrangement but is actually in customer hands.

    The announcement isn’t a big deal for MS, they plan on working with all manufacturers for their Communication Platform. This could be a big negative with communiations firms (like Nortel) surrendering the desktop to MS on the interface into their Call functionality. I don’t see Cisco going this route.

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  5. Newheights and Sipquest are both Nortel partners for UC software. I believe Nortel is stepping up a (big) notch and partnering with MS. It’s smart IMO. Somebody will do it and MS will be on the desktop. NT might as well join in. Same for anyone IMO. MS has the software advantage, like it or not. They will be the player on the screen.

    NT provides everything but the UC interface, so they get their piece. Can’t be too greedy or you get cut out. Cisco needs to do something. They aren’t a software, in your hands, type of player. Cisco is a big partner with IBM and Sametime. My bet is MS went to Cisco and didn’t get the deal they wanted. ??

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  6. I don’t believe Sipquest is a partner of Nortel. I think they just have done Inter-operability testing with the Nortel MCS 5100.

    also – I don’t beleieve NT is exclusive in the arangment with MS. Both Mitel and Siemens have deals with MS if I’m not mistaken.

    I agree that Cisco probably told MS to get lost. But I wonder whether IBM has a compelling enough product to beat MS on this front?

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  7. http://dyork.livejournal.com/189708.html

    I knew I had read this some where recently.

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  8. After reading their material (link below), I believe this really is something special.

    http://www.innovativecommunicationsalliance.com/

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  9. Avaya and Cicso lose out big. This will turn out to be the biggest telecom deal of the year.

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  10. Two losers do not a winner make. Both MS and Nortel are reliant on business models that are being superseded, and combining them won’t help. Each needs to create new business units to compete in the new space. As the saying goes, cannibalize your own business before someone else does.

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