The companies will enter into a four-year alliance agreement, with provisions for its extension. Nortel will be Microsoft's strategic partner for advanced unified communications solutions and systems integration and the two companies will form the Innovative Communications Alliance (http://www.innovativecommunicationsalliance.com) as a go-to-market vehicle, described as "[a] unique agreement...[involving] a shared vision for the future of business communications and a shared strategy that involves tight integration at the technology, channel, business engagement and customer experience levels."

They have described the alliance as "a decisive step further" that will "transition traditional business phone systems into software, with a Microsoft unified communications software platform and Nortel software products to provide further advanced telephony functionality...[and] provide the easiest transition path for businesses."

Microsoft and Nortel will deploy each other's technologies in their enterprise networks and Nortel will become a strategic systems integration partner for the advanced unified communications solution.

They will form joint teams to collaborate on product development that spans enterprise, mobile and wireline carrier solutions. Both companies say they will invest substantial resources in marketing, business development and delivery. They plan to "develop a series of compelling solutions for a range of customers, including small and medium-sized business, large corporations and service providers."

• Nortel takes new tack to serve the enterprise

Co-incident with their joint announcement of the alliance, Nortel announced a new "services-led business focus," that the company claims will deliver tailored solutions to both enterprise and carrier customers.

Dietmar Wendt, the recently appointed president of Nortel's Global Services business, said: "We want to be the 'partner of choice' and the number one network services and solutions provider in all segments where we choose to compete...To achieve this, we plan to relieve our customers of network concerns by ensuring they have the right hardware, software and configurations for maximising interaction of networks and components from multiple vendors, integrators.

According to Wendt, "Nortel can take over these time-consuming details for customers, freeing valuable resources to focus on their businesses, not their networks. Key next steps include building on our base of qualified resources in the regions through hiring and by establishing additional delivery partner relationships. We also need to improve our partner incentive plans, establish competitive pricing, and execute on our new relationship with Microsoft."

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