Real Time Communications Featured Article

Fear Microsoft, the Phone Company

March 20, 2015

This week Microsoft announced Skype for Business.  Coming in April, is its new client, server and "online service."  Everyone else in the UC world needs to start to worry if they aren't partnering with Microsoft, because the company is not fooling around. It is bringing four key advantages to the table that, at the very least, should cause worry among UC software vendors and Internet telephony /cloud voice providers: Integration, cloud, bundling, and brand.

Skype for Business is based upon the Skype interface and delivers an expanded Lync feature set with enterprise-grade security, compliance and control, plus the ability to contact anyone currently in the Skype world.  It's built right into Office, so presence, IM, voice and video calls and online meetings are all an integrated part in office.

Integration with Office means businesses will be able to go UC crazy.  No plug-ins, no additional software.  Voice, video, and online meetings are all integrated into Office, so users will be able to move seamlessly into real-time communications from any Office application. Avaya (News  - Alert), Cisco and other UC infrastructure players don't do the basics of word processing, spreadsheet, email, and PowerPoint.  Microsoft is embedded into businesses of all sizes through Word, Excel and Outlook.  Plugging presence, IM, voice, and video directly into Office by leveraging Skype is going to be one of those killer moments that people will look back on three years from now as a turning point for the UC world.

Businesses will be able to get Skype for Business through the cloud, including "enterprise voice," audio conferencing and connections to the PSTN.  It's going to go into production later this year in the U.S., followed by a global rollout. "This means Office 365 can be used for all your conversations—written, audio and video," said Microsoft.

Companies can choose to access the Office 365 bundle either over-the-top (OTT)  or through a Microsoft-blessed "ExpressRoute" connection—a dedicated Ethernet MPLS VPN connection.  Microsoft has been partnering with Tier 1 service provides such as AT&T, BT, Level 3, and Verizon for dedicated/direct Azure cloud connections.   Businesses have the option to get a dedicated connection or do a cross-connection at an exchange provider such as Colt or Equinix.

Either way, businesses can buy what they need via a cloud service rather than having to deal with servers and software maintenance.  It's going to become an attractive one-stop-shopping option for businesses that need IT as a service (IaaS).

Speaking of one-stop-shopping, Microsoft understand the power of bundle.  It has put serious investment into data centers as a part of its "mobile first/cloud first" strategy and has shiny new masses of servers around the globe that want to fill up.  The company has already offered bundles combining Office 365 with storage and Skype minutes.   Skype for Business means Microsoft  is deploying the ability to provide all the IT and phone needs for businesses—a capability that Tier 1 phone providers haven't mastered for the SMB world, and only have done so begrudgingly for the enterprise world.  ITSPs need to think long and hard about what happens to their SMB customers when Microsoft starts flooding the market with a one-bill option for services.

Microsoft's final advantage is in its brand. You don't have to explain to people what Microsoft is or establish its credentials as a player, unlike the discussions that have to take place when a third-party walks into a business.  Cloud providers are going to have to explain why businesses should stick with them rather than to switch to Microsoft.

I don't expect an overnight shift in the UC and ITSP world when Microsoft starts selling this fall, but businesses already using Microsoft products, especially Office 365 as a OTT cloud service, are going to end up migrating phones and that's going to cause problems.

Edited by Dominick Sorrentino

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