Microsoft's Communication Products Shift Sparks Mixed Reaction

Microsoft Corp.'s decision to dump Speech Server as a standalone product and roll it into its flagship communications software was seen Tuesday as good news for the company's overall product portfolio, but bad news for partners.

In addition, at least one analyst said the product roadmap announced at the SpeechTEK 2006 conference in New York could hurt Microsoft's credibility among enterprise buyers.

By dropping Speech Server as an independent product and integrating it into Office Communications Server 2007, Microsoft is building a stronger platform, analysts said. Speech Server would add speech recognition and text-to-speech capabilities in the unified-communications product, which is set to ship in the first quarter of next year.

"A speech interface will help Microsoft set OCS apart from a number of other unified communications platforms on the market," Brian Riggs, analyst for Current Analysis, said in an email response to a request for comment. "In general, speech integration will make OCS a much stronger platform for voice- and text-based business communications."

Avery Glasser, analyst for Opus Research Inc., agreed that OCS would be a stronger product, but warned Microsoft partners that the new roadmap was "an ecosystem changing event.""Enterprise infrastructure providers have to decide where their products fit in a newly defined solution stack," Glasser said in a research note.

Glasser expected Microsoft to incorporate into OCS capabilities found in computer telephone integration (CTI) systems and in telephone switching systems, called PBXs. As a result, Microsoft partners Genesys, Siemens and Avaya should start wondering whether they are helping Microsoft drive voice communications into the data center, which is handled by IT departments, and relegating themselves to support roles, Glasser said.

Besides the impact on partners, the product change could hurt Microsoft's credibility in the communications market. Killing Speech Server as an independent product could make businesses question whether the company can be trusted to follow through on its promises, Riggs said.

"To be successful, Microsoft does not want businesses questioning whether investments they make today in Microsoft-based communications products will retain their value in the future," Riggs said. "Going forward, Microsoft cannot be so wishy-washy in terms of product positioning if it intends to win the trust of enterprise buyers."