Microsoft's new Lync software targets corporate phone world

Since the dawn of the Internet, software companies have predicted it will replace the traditional phone system. That has started happening in some areas, with the rise of Skype for Web-based phone calls and with instant messaging.

Microsoft believes the next frontier, replacing whole phone systems, could be next. On Wednesday, the company launched Lync, a new communication software aimed at replacing corporate phone systems.

It's hoping companies are ready to ditch their traditional phone systems for Lync software and servers.

"We're seeing different functions — communications, messaging, instant messaging, co-authoring, conference calling, presence — those are things people are dying for us to bring together," said Kurt DelBene, president of the Microsoft Business division.

He hinted this could be another billion-dollar business for Microsoft, one that recalls the company's success with SharePoint, which combined file sharing, Web portal software and search into a collaboration suite that has sold like gangbusters.

"It feels to me like another SharePoint business," DelBene said.

Microsoft showed off the unified-communication software Wednesday in New York. Chairman Bill Gates showed up briefly, via a video call from Seattle.

"This is probably the most important thing to happen for the office worker since the PC came along," he said.

The software combines voice calling, instant messaging, video conferencing and Web conferencing in a single package. It will be available for sale Dec. 1.

Microsoft renamed all of its communication software Lync in this release, deep-sixing the products' previous names: Office Communicator, Office Communication Software and Live Meeting.

In New York, Microsoft demonstrated users making calls from software similar to how an instant-messaging service works.

Workers can search for colleagues, dial an on-screen keypad or through an attached phone, or connect to a videoconference call with a virtual white board on a touch-screen monitor.

The software automatically senses whether the receiving worker is on a call, logged in or in a meeting; the software then updates that worker's status.

Lync can also start video calls with Windows Live Messenger, Microsoft's free instant-messaging software, as well as on the home television via Kinect, Microsoft's new motion sensor for the Xbox 360.

Next year, Microsoft plans to release Lync software for Windows Phone 7 and the iPhone.

The company also is set to offer Lync as a cloud service through Office 365, the online suite Microsoft plans to launch next year that includes Exchange, Word, Excel and PowerPoint.

"What we have with the Microsoft release is really an important step toward clarifying what the next generation of communication would look like," said Bern Elliot, vice president of research at Gartner.

Companies can opt for different features in the software without replacing their entire phone systems, but selling the whole suite is Microsoft's end game.

DelBene said Microsoft switched to the software for all of its communications and is saving $250 million a year. The savings from audio-conference calls alone is $75 million, he said.

Will Lync be as reliable as the phone system?

"That is the $100 million question. Certainly that's the holy grail that Microsoft has been designing towards," said Scott Gode, vice president of product management and marketing at Azaleos. The Seattle company manages software services such as Lync and Exchange for companies.

DelBene said Lync's architecture has a lot of backup systems built in, even disaster recovery that would back up everything to another location during an earthquake.

Gartner's Elliot said companies are at the "early stage" of trying out unified-communication software on small groups, both from Microsoft and its competitors, Cisco and Avaya.

"This is a huge market. But Microsoft is leading in the advance of this new paradigm," he said.

Shell, the oil company, has plans to convert 28,000 workers to Lync, according to Microsoft.

Boeing and Nikon have also started using the software.

"We're doing some major deployment numbering in tens of thousands of seats," said Sonu Aggarwal, chief executive of Unify Square, a Microsoft partner in Bellevue that helps companies move to unified-communication software.

"This is getting very real and out there."

He predicts the business world will spend the next decade making the switch.

"We're just seeing the very beginning," Aggarwal said. "We're scratching the surface on a major transformation."

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com