Microsoft (MSFT) To Battle Cisco (CSCO) For Business Communications Dollars

Microsoft (MSFT) said it expects its unified communications product — the company’s effort to link e-mail, instant messaging and phone systems over Internet networks — to become one of the fastest-growing segments of its $16 billion business division. The company made the prediction at an event to introduce its Office Communications Server 2007, which allows users to e-mail, instant message, video conference or make Web-based phone calls from within the company’s Office applications, according to Reuters.

Cisco (CSCO), which controls much of the global router market and recently bought video conferencing company Webex, would like to own the same bit of real estate.

The truth of the matter is that both companies are likely to pick up significant business in the enterprise VoIP, video conference, and instant messaging areas. And, over time, the big losers will be the large telecommunications companies who provide complex and expensive voice systems for big companies.

The business-to-business units of Verizon (VZ) and AT&T (T) are going to face tough going in the next two or three years.

Douglas A. McIntyre