The announcements came in a joint press conference held in New York by their respective CEOs, Steve Ballmer and Mike Zafirovski. The event also featured the now obligatory demo of Unified Communications at work, with Paul Duffy, group product manager for UC at Microsoft interacting from his laptop with co-workers in other locations via a hardphone from the Canadian equipment vendor, a softphone, email and IM, all from a single Office Communicator client and guided by their respective presence status.

There was an element of The Story so Far… at the beginning of Zafirovski’s speech, as he recounted what’s been done since the two companies first announced the ICA partnership in mid-2006. In essence, this is a converged office for SME offering based on Nortel’s CS1000 PBX and Microsoft’s Live Communications Server, or as it is now known, Office Communications Server (OCS).

That offering will be extended into the enterprise market, as well as carrier-hosted services, in the second half of this year when Toronto-based Nortel brings the CS2000 and CS2100 versions of its PBX to market, Zafirovski went on.

Beyond that, he announced three new offerings, two of them for the second quarter of 2007 and the third for the fourth quarter. The first is Unified Messaging, where Exchange 2007’s unified messaging capability will be integrated natively into a Nortel PBX via the Session Initiation Protocol (SIP) for IP telephony, enabling click-to-call functionality from within the email environment.

The second is the integration of Nortel’s multimedia conferencing technology with OCS, enabling Office Communicator to be the dashboard for audio and video conferences, with a variety of other forms of communication included in the same session.

Then in the fourth quarter the companies will launch an offering called the UC Integrated Branch, an agglomeration of server softwares covering what, Ballmer explained, are usually a number of separate boxes in branch offices right now, namely a router, a switch, a FAX, a PBX and something to handle the interface with conventional PSTN telephone networks, which can either be the TDM side of a hybrid PBX or a media gateway where an all-IP PBX is in use.

In the Q&A session afterwards, Ballmer was quizzed as to how ambitious the partners’ ambitions were in conferencing: would they be happy just to enable desktop conferencing, or would they seek to go more upmarket, maybe even all the way up to dedicated rooms, as their archrival in UC, Cisco, has recently done, or HP before it?

In response, he revealed that a piece of hardware we call the Roundtable Camera will be launched with OCS towards the end of this year, precisely to address this more high-end conferencing requirement. Furthermore Paul Rowe, head of Nortel’s enterprise solutions marketing for the EMEA region, revealed to Computer Business Review in December that the networking vendor’s MCS5100 product will form the high-end conferencing server within OCS, so clearly the partners’ conferencing ambitions aren’t limited to the desktop.

This area of activity, as well as the UC Integrated Branch offering, shows the ICA partnership moving into head-on competition with Cisco. That company offers conferencing both with its MeetingPlace platform for mainstream enterprise customers and, more recently, the really high-end TelePresence room for the immersive, as if they were on the other side of the table experience.

Nortel and the Redmond, Washington-based OS giant may never go as far as to launch a full conference room offering complete with altered codecs to lip-sync the participants, specially developed plasma screens and the directional audio that follows speakers from one screen to another. They will, however, clearly want to go upmarket while all the time seeking, as Ballmer put it, to democratize conferencing, i.e. make it cheaper and available to more users.

As for the UC Integrated Branch, it is clearly going to compete with Cisco’s Integrated Services Router (ISR) portfolio, where again multiple functions are delivered on a single platform. Cisco’s competitors quibble with the integrated epithet, arguing that bundled would be more correct because the box takes a performance hit as more functions are turned on, which presumably should not be the case with an integrated device.

Semantics aside, however, there is nothing to say that the Microsoft/Nortel offering would present the same characteristic when it comes to market. Indeed, the only one of these branch-in-a-box offerings that claims to suffer no such hit is the Services Gateway from dedicated start-up NetDevices Inc, whose operating system was specifically developed for such multi-function operation. NetD is too small a player to make much of an impact, however, and its best hope is probably to be acquired by a bigger fish.

Another interesting aspect brought out in the Q&A was when someone put to Ballmer that the UC demo had indeed been very similar to things IBM, Avaya and countless other vendors do when they’re talking up similar technology, so how is ICA’s offering going to be different?

The others have no integration into other areas of informant management such as SharePoint, Outlook or the rest of the Office experience, he responded, making it clear that the ICA partners will seek to leverage their US offering’s ability to be tightly coupled with Microsoft’s ubiquitous office productivity suite to stand out from the crowd.