Microsoft is teaming with Nortel, the global telecommunications giant, to push its software for integrating voice, e-mail and video communications out to businesses.

Microsoft Chief Executive Steve Ballmer said the alliance, announced Monday, puts his company "in the business of VoIP [voice over Internet protocol] quite clearly."

Voice communication, delivered digitally via the Internet, is a key component of Microsoft's unified-communications strategy, which the company announced last month.

Microsoft has five new or updated products in this area scheduled for release in the next 12 months, Ballmer said.

"This is a beginning," said Lisa Pierce, a vice president at Forrester Research covering enterprise communications. "All of us in IT have been anticipating the tighter and tighter linkages between software and telecommunications."

While specific financial terms were not disclosed, Microsoft is making a payment to Nortel for intellectual property, and the companies will invest jointly in research and development and marketing of unified communications.

Microsoft is designing products to let workers locate and contact colleagues through voice, instant messaging, video conferencing or other means. The system is designed to allow workers to communicate from computers, mobile phones and traditional desktop phones.

Nortel, based in Brampton, Ontario, is creating a division to focus on upgrading business networks to Microsoft's unified-communications platform.

"Nortel wins by gaining the software expertise of a key player in the industry and also by expanding our market," said President and CEO Mike Zafirovski, adding that the company sees the opportunity for "well over $1 billion" in additional professional-services and voice-products revenue over the next three years as a result of the alliance.

Microsoft Business Division President Jeff Raikes said on the company's Web site that Nortel will have "development resources co-located with our unified-communications team in Redmond."

Nortel has a regional sales office in Bellevue with about 125 people, a company spokesman said. It had 35,370 employees globally at the end of last year.

Raikes estimated the potential market for unified-communications products is upward of $40 billion.

Microsoft has entered several new markets in a search for the next multibillion-dollar business to drive growth beyond its core products.

Voice alone is an $11 billion to $12 billion market, said Zeus Kerravala, Yankee Group's lead communications and network analyst. "If Microsoft is looking for a growth market, voice is one," he said.

Microsoft and Nortel will be competing with the likes of IBM, Cisco and Avaya.

Pierce said 15 percent of North American companies with more than 1,000 employees are using some form of unified-communications technologies and 30 percent are evaluating it, according to a survey Forrester performed this spring.

Benjamin J. Romano: bromano@seattletimes.com

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