Microsoft and Intel set for telecoms link-up
By Richard Waters in New York and Roger Taylor in San Francisco
Microsoft and Intel are expected today to announce a joint attack on the fast-growing telecommunications equipment business, marking their biggest push yet into an industry worth an estimated $250bn a year.
Together with hardware suppliers Hewlett-Packard and Nortel, the two are expected to unveil an alliance that, if successful, could open up a huge new market for Microsoft's Windows NT operating system and Intel's Pentium microprocessors. Most telecoms equipment currently operates on proprietary software using chips produced by a range of manufacturers, including Motorola.
The venture could also advance the introduction of corporate networks combining voice, data and video signals on the same infrastructure. At present, the telecoms bridge between most companies and the public network handles only voice traffic, and sits alongside separate data equipment.
The plan is for Nortel to build routers, switches and servers for corporate computer networks running Microsoft NT software and handling both data and voice communications.
Roger Wery, executive vice-president of Renaissance Worldwide, a consulting firm, said the technology alliance could act as a wedge giving Intel and Microsoft their first big stake in telecoms equipment. By introducing the open technology architecture of Microsoft and Intel's "Wintel" alliance it could also bring down prices rapidly, he added.
Nortel initiated the new four-way alliance, in a departure from usual practice in the telecoms equipment market. Competitors such as Cisco Systems and Lucent Technologies produce both the hardware and the software needed for their equipment.
The venture could give Nortel the opportunity to get in on the ground floor of a growing market, even if it runs the risk of undermining its profitable voice telecoms business lines.
Other telecoms equipment suppliers could eventually be brought into the alliance if it proved successful.
It is understood that the new range will be marketed by Hewlett-Packard under its brand name. Hewlett-Packard has an alliance with Cisco Systems to provide systems to network operators such as telephone companies and internet service providers.
Windows NT has yet to gain a foothold in the telecoms industry, although it has fared better with banks and retailers. Critics claim that it is less suited to large-scale applications than rival Unix.
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