VoIP's Future Rosy, Microsoft Biz Chief Says

Published: March 14, 2007

by Alex Woodie

While voice over IP (VoIP) is benefiting some businesses today, we haven't come close to tapping the technology's vast potential to improve how people collaborate, according to Jeff Raikes, the Microsoft Business Division president. In fact, VoIP will have such a colossal impact on communications that it will make standard telephones as obsolete as "that old typewriter that's gathering dust in the stockroom," Raikes said.

Last week, Raikes predicted a coming VoIP revolution in a keynote address at the VoiceCon Spring 2007 conference in Florida. The gist of his speech was we haven't seen anything yet with VoIP. "Software is set to transform business phone systems as profoundly as it has transformed virtually every other form of workplace communication," he said. "Over time, the software-based VoIP technology built into Microsoft Office Communications Server and Microsoft Office Communicator will offer so much value and cost savings that it will make the standard telephone look like that old typewriter that's gathering dust in the stockroom."

Raikes also announced the start of the public beta tests for Microsoft's two key VoIP products: Office Communications Server 2007, the follow-on to Live Communications Server 2005 that will form the hub of Microsoft's VoIP strategy, and function much like a "voice server"; and Office Communicator 2007, the client component that will allow users to place and receive VoIP calls using their computers, eliminating the need to buy special VoIP phones. Private betas for these products began in December. Product shipments are planned by the end of the second quarter of 2007.

Microsoft also unveiled plans to share the "interoperability specifications" that will make it easier for Microsoft's business partners to build VoIP gear that hooks into Office Communications Server 2007 and Office Communicator 2007. Specifically, these vendors--Nortel Networks, Alcatel-Lucent, Cisco Systems, and Siemens Communications, Avaya, LG-Nortel, Mitel Networks, NEC Philips Unified Solutions, and Polycom--need to understand Microsoft's implementation of the Session Initiation Protocol (SIP), the "presence awareness" technology that next-generation collaboration solutions will use to determine whether other people using SIP-enabled gear are available to take a VoIP call, enter into an instant messaging (IM) session, participate in a Web conference, or other forms of collaboration.

We are on the cusp of the VoIP revolution, predicted Raikes. "Within three years, more than 100 million people will be able to make phone calls from Microsoft Outlook, SharePoint, and other Microsoft Office Systems applications; and customers will be able to gain this value with VoIP solutions that are half the cost of what they are today," he said.

There are several issues that must be resolved before VoIP can go mainstream, however. First, the cost of VoIP handsets, which currently account for 40 to 45 percent of a total VoIP installation, according to Gartner--must come down. Also, voice quality has to get closer to the quality of hardware-based PBX telephone systems before users make the switch en masse.

But once these issues have been worked out--and Microsoft claims voice quality is better with Office Communications Server 2007 than competing offerings--then VoIP has the capacity to permanently change the economics of telephony. Robert Sincavage, section manager of Web and Collaborative Systems for the BMW Group, sees a huge upside. "This product sets the stage for a back-end infrastructure where archaic hardware PBXs will be replaced by software and industry-standard servers, potentially resulting in dramatic economic benefits," he said.

But it's more than just saving money on telephone calls--it's about making people more productive, according to Raikes. "For those people freed from voicemail jail and telephone tag, critical projects won't grind to a halt or slow down," he said. "They won't waste time calling three different numbers, or checking six different inboxes. Instead, these communications-empowered people will make better decisions faster, enabling their companies to outpace the competition."

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