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And now, Wintelecom
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March 15, 1999: 3:31 p.m. ET
Microsoft, Intel to take on voice and data networking with Nortel, HP
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NEW YORK (CNNfn) - Having won control over the computer industry, Microsoft Corp. and Intel Corp. Monday unveiled their plans to tackle the telecom- and networking-equipment market.
The software giant and the chip behemoth are teaming up with Nortel Networks (NT) and Hewlett Packard Co. (HWP) to develop a new line of voice- and data-networking equipment in an attempt to crack a market with $250 billion a year in sales.
The agreement underscores the rapid convergence of voice and data traffic over the Internet, with telecom and networking companies joining forces to tap into the lucrative market.
Two new products, to be offered under the HP brand, will allow businesses to send voice, video and data traffic over their computer networks.
Together, Microsoft (MSFT) and Intel (INTC) already provide the so-called "Wintel" software and hardware configuration now found on the huge majority of personal computers. "Wintel" computers run a version of Microsoft's Windows family of operating systems on an Intel Pentium-derived microprocessor.
Under the alliance, the two companies will work with Canadian telecom giant Nortel to develop networking products that would compete directly with products from market leader Cisco Systems Inc. (CSCO) and other firms.
The companies made the announcement at a press conference Monday afternoon.
Wintel-based telephony
Unlike most existing network gear, which uses the Unix operating system to handle voice and data traffic, the new products will conform to standards based on Intel chips and Microsoft's Windows NT operating system.
As the fourth member of the alliance, Palo Alto, Calif.-based HP will manufacture and sell two new products under its brand name.
The HP business communications server, designed for small- and medium-sized businesses, will include Nortel's Internet protocol (IP) technology and Microsoft Windows NT Server.
The communications server is designed to provide such telephone-system functions as voice mail and Internet protocol telephony over corporate networks.
The HP business messaging server, targeted at medium-sized and large corporations, will incorporate the Microsoft Exchange e-mail server and Nortel's CallPilot messaging capabilities.
CallPilot messaging gives customers access to voice, fax and e-mail messages through a single desktop application or a phone call. Business travelers, for example, will be able to listen to voice-mail messages or view faxes on such PC software as Microsoft Outlook.
"We're integrating voice and data services on one platform -- with a single management interface and a single link to the Internet," said Lewis Platt, HP chairman and chief executive officer.
"The benefits for our customers will be cost savings and the simplicity of unified communications and IT applications."
Over the past several months, several top firms have joined forces to take advantage of the convergence of voice and data networking.
In January, Lucent Technologies Inc. (LU) acquired networking firm Ascend Communications (ASND) for $20 billion.
Last June, Nortel made waves with its $9.1-billion acquisition of Bay Networks.
Microsoft shares rose 3-13/16 to 164 in late-afternoon trading, while Intel shares slipped 7/16 to 117-13/16. Nortel shares added 1-15/16 to 60-3/4, while HP shares climbed 2-1/8 to 71-1/8. 
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