Microsoft News Tracker

Reuters:

Microsoft Corp. on Tuesday said it has set a communications alliance with Canada’s Nortel Networks Corp. the latest step in Microsoft’s drive to promote software as a way to simplify how workers communicate.

Nortel said it expects to reap more than $1 billion in new revenue over the life of the four-year pact, under which the companies will shift traditional business phone systems into software, allowing customers to cut costs.

“We believe we can capture well beyond $1 billion in new revenue, ramping up with increased momentum through 2009 via professional services, voice products and applications, as well as data pull-through in the enterprise,” Nortel chief executive Mike Zafirovski said in a statement.

Nortel (which is overcoming some recent troubles) has its fingers in a number of telecom pies, but traditionally has been a provider of business telephone systems. This is likely a win-win for both players as Nortel gets a leg up on new technologies and Microsoft gets an entry to the business phone system market. I would observe that Nortel also collaborates with other companies like IBM in other technical areas. The press release has more details on the four year agreement.

Update: John Dvorak has a more skeptical view:

Part of the lure here seems to be Microsoft’s much touted “Unified communications platform.” This is yet another one of those half-baked Microsoft sounds-good-on-paper-fix-all-problems ideas that eventually drifts off into an obscure nook, sputtering. Nobody is even sure what it is — as usual.

Let’s be honest here: Insofar as communications is concerned, specifically, Microsoft is a laggard and Nortel is too. Two laggards do not make a juggernaut.