Microsoft The Unifier?

You could argue over whether Microsoft’s continued embrace of new alliances, such as in open source and telecommunications, was forced on it or a reflection of a new era of leadership at the software behemoth.

Given its antitrust struggles in the U.S., Europe
and Asia, some of its partnerships that help settle long-running monopoly abuse charges are to be expected.

But company-watchers also note that Microsoft is bending to market realities as customers force the company into waters that it cannot navigate on its own.

Take its alliance with networking provider Nortel
in the unified communications space.

The companies just introduced three new products and a road map on providing companies with a single tool for integrated voice, instant messaging (IM) and e-mail communication. Most important, it helps position Microsoft and Nortel for a piece of the action in the growth of Internet telephony, as well as the rest of the IP-enabled communications bundle.

Richard Ptak, principal analyst with Ptak, Noel & Associates, said Microsoft
will need more partners like Nortel, as convergence mixes up traditional divisions between hardware and software in the unified communications sector.

“They’re going to have to be doing more collaborating with other industry
giants because of the overlap of voice and data processing, and they just
don’t have the chops to do that alone. So they’re going to have to be a
better partner [than in the past],” he told

Microsoft’s new pattern extends to its own software sector, too. Later this month,
the company is set to roll out the first significant enhancement to Duet, a
product it unveiled this summer in partnership with SAP .

The product is sold to companies as a way of increasing employee
productivity by integrating Outlook’s user interface (UI) with SAP’s flagship ERP  application suite. By creating a more familiar UI, the two companies say they are making it easier for customers to with data in SAP data repositories.

Chris Caren, general manager of office business applications at Microsoft, said the companies are marketing Duet jointly and, although their sales organizations sell separately, both companies share in customer wins “regardless of who makes the sale.”

Udo Waibel, senior vice president of emerging solutions for SAP, said the approach is helping it sell more licenses. “More than 30 percent of Duet sales are to users that have not been licensed with SAP before,” he told

Charles King, principal analyst with Pund-IT Research, said that these kinds
of alliances prove that “Microsoft is seeing it doesn’t have to build the
road and own the road — that in certain areas, it makes sense to hook up
with an experienced player in a new market and potentially laugh all the way
to the bank.”

Microsoft is also working with Oracle , a longtime rival, in order to improve integration between its Office productivity tools and the database vendor’s ERP products. Forrester analyst Ray Wang told he believes the product may provide even deeper integration than Duet.

In perhaps the most telling sign of a softer yet canny approach to its competition, Microsoft signed a
peace pact with long-time rival Novell in late 2006. The deal, though ripe with complexity, keeps Novell’s open source enterprise Linux products, such as SUSE Linux Enterprise Server (SLES), out of Microsoft’s legal cross-hairs over potential copyright disputes against the Linux-based operating system.

As previously reported by, the companies will offer customers looking to run Linux and Windows side by side in a virtualized environment Novell’s SUSE Linux Enterprise Server (SLES) and a subscription for SLES support along with Microsoft Windows Server, Microsoft Virtual Server and Microsoft Viridian. It’s a level of integration and cross-support that would have been a non-starter years ago.

Microsoft spent the better part of two decades “having a very long enemies
list,” said Laura DiDio, analyst with the Yankee Group. But as the market has become more competitive and complex, the company realizes that has little room for error. DiDio credits
Ballmer with helping chart a different course for the company. “He’s shown himself to be more flexible and agile than earlier in his career.”

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