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Microsoft: Big Money in VoIP Software

An executive in Microsoft says organizations that will switch to Internet based telephone systems (VoIP) working on the company`s software will make billions of dollars in revenues. According to Jeff Raikes, president of Microsoft`s business division, the switch to Internet based telephone services will gain momentum in the next three years, and Microsoft`s new server software will change telecommunication system industry in much the same way the Windows operating system changed the computer industry. "You`re going to see history repeat itself," Raikes said at an interview before his keynote speech at "VoiceCon Spring 2007", a Web-based telephony industry conference.

Microsoft`s strategy in the VoIP market is dissimilar to that of Cisco, which sells its systems complete with software and hardware. Microsoft is working on building a business modal like that it used in the PC market, with its software at the core. Last year, the software giant signed an agreement with the Canadian telecom equipment manufacturer Nortel, aimed at the VoIP market. According to Raikes, the software market generated by the switch to VoIP will be worth $35-40 billion annually, in the next few years. "Ultimately, it will mean billions," Raikes said.

A growing number of companies have adopted some sort of VoIP technology, mainly in efforts to cut costs. Zeus Kerravala of Yankee Group estimates that approximately 82% of US companies use VoIP to some extent, though only a mere 8% fully integrated the technology. For the time being, the high price tag of fully integrating VoIP is deterring companies from maling the switch, but Raikes says that the cost is expected to be cut in half, during the next three years. Microsoft projects that 100 million business users will be able to have a telephone conversation through VoIP using Office, within three years, double the current number.