Nortel inks deal with Microsoft

CYBERMEDIA NEWS

Microsoft and Nortel entered into a strategic four-year alliance based on a
shared vision for unified communication. The alliance will allow both companies
to drive new growth opportunities and transform businesses communications,
reducing costs and complexity and improving productivity for customers. The
agreement included provisions for extending it beyond the initial four years.
Nortel will be Microsoft's strategic partner for advanced unified
communications solutions and systems integration, the two companies will form
the innovative communications alliance and Microsoft and Nortel will deploy the
other's technologies in their enterprise networks.

Nortel and Microsoft will change traditional business phone systems into
software, with a Microsoft unified communications software platform and Nortel
software products to provide further advanced telephony functionality. This
software-centric approach will provide the easiest transition path for
businesses, helping enable them to reduce the total cost of ownership and better
protect current and future investments. It will also more quickly enable the
creation of new, innovative applications.

Mike Zafirovski, President and CEO, Nortel

“Nortel and Microsoft have each led fundamental transformations in their
own market - Nortel's digital innovation and Microsoft's software on every
desktop,” said Mike Zafirovski, President and CEO, Nortel. “By combining our
unique strengths, Microsoft and Nortel will accelerate the delivery of unified
communications - delivering to our customers a higher-quality user experience,
with greater reliability and lower total cost of ownership. That's where we
can make a real difference.”

“We are investing together because the communications industry is at an
inflection point,” said Steve Ballmer, CEO, Microsoft. “We will have deep
collaboration in product development with Nortel, allowing us to rapidly deliver
high-quality, highly reliable solutions that will support mission-critical
communications. The opportunity for our customers is fantastic. We will enable
them to realize tremendous economic and business benefits from unified
communications.”

“This is a gutsy play for Nortel - accelerating the move of our voice
technology into software and working with the world's software leader as part
of our broader business strategy to transform the company into a software and
services leader,” Zafirovski said. “From this transaction, we believe we can
capture well beyond $1 billion in new revenue, ramping up with increased
momentum through 2009 via professional services, voice products and
applications, as well as data pull-through in the enterprise.”

“Unified communications will drive the next major advance in individual,
team and organizational productivity in today's 24x7 work environment,” said
Jeff Raikes, President - Business Division, Microsoft. “Our software-based
approach puts people at the center of communications through a single identity
across e-mail, voice mail, voice over Internet protocol (VoIP) call processing,
instant messaging and video, and intuitively embeds communications capabilities
into people's everyday work processes, including the Microsoft Office system
and third-party software applications.”