Microsoft, Qwest Team Up on VoIP

Microsoft and Qwest Communications today revealed they are collaborating to provide VoIP (voice over Internet protocol) and other telecommunications convergence services to SMBs (small and medium-size business customers), making Qwest the first service provider to leverage Microsoft's recently launched VoIP software suite.

The companies made the announcement at the Fall 2005 VON conference, which is being held this week in Boston.

Microsoft and Qwest--which also will provide e-mail, Internet access, instant messaging, and VoIP integration with other desktop applications--will roll out their first joint services early next year, according to Michael O'Hara, general manager of Microsoft's communications sector.

Microsoft's contribution to the joint project is its Solution for Enhanced VoIP, a suite consisting of hosted versions of several Microsoft server products, including Microsoft Exchange Server 2003, Microsoft Office Live Communications Server 2005, and Windows SharePoint Services with Sylantro Systems' Application Feature Server. Microsoft and Qwest are working to deploy this suite with Qwest's OneFlex VoIP network services, O'Hara said.

On the Move

Microsoft has been moving into the VoIP market of late as the technology--which until now served primarily as a way for consumers to make inexpensive voice calls on telephones or PCs--becomes more attractive for businesses when coupled with the applications they already use.

"VoIP on its own is interesting, but it's just cheap phone service," said Maribel Lopez, a vice president at Forrest Research. "Voice when you integrate it with other things starts to become more interesting. The ability to have an Outlook address book [with] click-to-call [capability]...there's value-add there."

Microsoft, which launched its Solution for Enhanced VoIP services in June, said it would be working with service providers to deliver VoIP services over their networks for traditional telephone calls; those networks typically provide clearer connections than current PC-to-PC voice services.

To improve computer-to-computer VoIP, Microsoft last month acquired Teleo, a developer of services and technology that allow users to make and receive voice phone calls on their PCs via the Internet. The software giant plans to incorporate Teleo's VoIP technology into its own software to upgrade online services from its MSN division.

Use With Instant Messaging

All of the major instant-messaging chat clients--such as MSN Messenger, America Online's Instant Messenger, and Yahoo's Messenger--provide services that enable users to make voice calls on their PCs.

Tuesday's deal gives Qwest an edge over telecommunications competitors to provide VoIP to SMBs, a potentially huge revenue source for service providers offering convergence applications, Lopez said.

"If you think of the consumer market, they're not enamored with [value-added] features," Lopez said. "SMBs can benefit from a robust feature set, the [low] price, and the capabilities VoIP can provide with other productivity applications, such as CRM and collaborative software."