JV between MS and Nortel

Ubiquitous computing is the philosophy that Microsoft strongly
belives in and yesterday it took a gaint step in realising it's
dream. The colloboration between Nortel and microsoft certainly is a
step that can pioneer a massive change in the way people communicate
all around the world. The technology, outreach and the money that
microsoft has, no doubt will play an important role in making this
collobaration a successful one. As Microsoft CEO Michael Ballmer
said "It is Shame on Microsoft if this does not work out ". I
provide some examples to stregthen my argument.

A look at history of computing provides the evidence for
communications and software are bound to cross eachother at some
point. Original invented for doing large scale calculations the role
of computer has changed over the years. Computers today are being
used not only to prepare software and do large scale computations
but also for communicating with your peers whereever you are.
Electronic mail has had a deep impetus on the way people keep in
touch all round the globe. VOIP, Online Chat are some of the othere
examples which would emphasize the merger of communication and
computing.

As I Stated before Microsoft takes ubiquitous computing very
seriously and it comes as no surprise that it is chartering into the
unknown waters of Communications. Microsoft Office is on of the
largely used softwares all around the world and the company can
obviously leverage on it's oureach by writing additional plug-ins
for this project. The market is expected to be close to 40bn$ in a
couple of years. If this proves to be true and the alliance provides
a breakthrough, it stregthens Microsoft's position beyond
imagination. It is understood from the excerpts from an interview
with Microsoft's business head Jeff Reiks that the software that
would be written would have the capability to analyse where to
transfer your call (a choice between your office phone, home, your
mobile) depending on your status. Such an indepth analysis and
programming requires a lot of skill which microsoft has got in loads.
Networking company Nortel stands to gain a lot from the deal.It's
share has already seen a 6p.c growth and the people at Norton are
optimistic about this growth being sustained over a long period in
the future. Norton estimates that they are going to gain
approximately 1bbn$ from this deal. If the alliance continues for a
longer period (the current deal is for 4 years), the stakes might be
much higher.

Having said all this , it is not to say that this alliance is going
to be unchallenged and the sailing is going to be smooth. Microsoft
may be the largest software company in the world but the world of
networks and communication is an entirely new domain to them. There
are well established comapnies like AVAYA and CISCO who have lot of
domain knowledge and industrial experience along with the monetary
power. These comapnies also have a similar vision and they have
already entered into tie-up with IBM, another large scale provider
of software. This battle for the highly productive market is going
to be a treat for all the analysts out there.

To sum it up, This alliance marks a transformation of the industry
dynamics. It also shows the changing strategy of Microsoft , willing
to come out of the traditional software that has proved to be highly
successful and experiment on other fronts. The clash for the market
share is going to be huge. With the likes of AVAYA, CISCO, IBM,
MICROSOFT, NORTEL in the battle field it can be called as "The Clash
Of The Titans".

Prasad



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