Microsoft and Nortel plan to unify their efforts to develop "unified communications" products to break down the barriers between telephony, voice mail, e-mail and instant-messaging systems.
The companies have struck a four-year alliance to jointly develop and sell unified communications systems, they said Tuesday.
The companies' goal is ultimately to replace the office PBX, voice-mail system, e-mail server and instant-messaging system with a single software platform based on products such as Microsoft Office Communications Server 2007 and Microsoft Exchange Server 2007 unified messaging.
As part of the deal, Nortel will move its traditional business phone systems on to Microsoft's unified communications software platform, adding additional functionality with its own software.
Microsoft will have "deep collaboration" on development of the products, which will include call-centre applications, telephony and mobile access systems, and data-networking infrastructure, the companies said.
Microsoft sees unified communications as a way to communicate via e-mail, voice mail, VoIP instant messaging and video in a professional environment, using a single identity.
Microsoft's Windows Live Messenger service already links many of those functions to a Hotmail e-mail address for consumers.
The companies will form joint teams to develop products for fixed, wireless and enterprise networks, targeting carriers, enterprise customers and small and medium-size businesses, they said.
They hope that their collaboration will result in products with Microsoft's reputation for ease of use and Nortel's for network reliability.
To market the jointly developed products, the companies have formed an organisation called the Innovative Communications Alliance. They will build a joint sales channel with its own training and incentive program, they said.
Nortel will also become Microsoft's systems integration partner for advanced unified communications products. The deal could bring Nortel as much as US$1 billion in additional revenue, the company said. Nortel had revenue of around $10.5 billion in 2005.
The companies' chief executive officers, Steve Ballmer and Mike Zafirovski, will give more details at a news conference later on Tuesday.