Microsoft Goes After The Phone Company

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Microsoft has begun trials of a new VoIP system that will work on its server software and be intergrated into its Office suite of business software. It is probably safe to say that it is not good news for the phone companies.

The new product, called Microsoft Office Communications Server, will be out in the Spring of 2007  Other large software providers like Oracle and IBM are already moving into segments of the VoIP business.

Microsoft’s CEO has predicted that within 10 years, hundreds of millions of people will change the way they handle their voice communications.

With the cable companies already providing these functions to consumers, the Microsoft move into the business market is another blow to companies like Verizon, AT&T, British Telecom, and Deutsche Telekom that rely on fixed line revenue for a larger portion of their revenue.

Whether they can replace these dollars with money from new TV services is still open to question. But, if Microsoft is moving into the market, the odds are getting worse.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.