In Microsoft's view, it means a unified way of communicating through its products and through a new interoperability standard. The products include Microsoft Office Communications Server 2007, Office Communicator 2007, Office Live Meeting, and a 360-degree videoconferencing tool called Roundtable.

The standard is Unified Communications Open Interoperability, which will certify that qualified telephony systems work with Microsoft's unified communications software.

Up to 30 Percent Savings

Microsoft said that its solutions could reduce the cost of the average corporate VoIP system by half, and could result in "dramatic time savings" and cost savings of up to 30 percent over traditional systems.

The announcements by the Redmond, Washington-company embraced a wide range of communications, from videoconferencing and "presence" to instant messaging. Nora Freedman, an analyst at IDC, said unified communications is "really about streamlining voice capabilities into key business applications," including SAP, Oracle, and others, as well as Microsoft Office.

"The critical issue," she said, "is voice." She noted that the real value proposition for all sizes of businesses is not so much productivity and cost savings, which are key Microsoft points, but "removing the human latency" that is present in many businesses.

Lowering human latency matters across the board for businesses, she said, whether it means a mechanic trying to communicate with a vehicle's owner while both parties keep moving around, or a stockbroker trying to get the most return in the quickest way possible. The idea goes beyond merely increasing productivity, she explained, because it can mean the ability to make more money.

Microsoft Versus Cisco

Freedman noted that the current field for such technologies is "complicated," with Microsoft's position being "the most formidable player from the software perspective" in a "religious war." That war is with Cisco.

While there are several major players -- including Nortel, Siemens, Alcatel, and IBM -- the central competition is between Microsoft and Cisco, she said. Microsoft is looking at a unified communications solution from the point of view of managing via the desktop , while Cisco's orientation is on the intelligence of the network .

Freedman's own viewpoint about this religious war, she said, is "nondenominational," Neither the desktop nor the network can solve the problems separately, she added.

According to Freedman, Cisco appears further along in leading the field, but she said it's hard to say where the competition stands now. What is clear, she said, is that customers of all sizes, even multinationals, are eager to have a unified communications approach that is simple to implement and manage.