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Microsoft is moving into the carrier voice-over-IP arena via a sales and marketing agreement with Sylantro Systems Corporation, maker of a software platform for advanced IP Centrex and hosted communications services. Service providers use Sylantro's VoIP feature server to offer hosted PBX services to businesses. Under the agreement, Sylantro will deliver Microsoft's Hosted Messaging & Collaboration applications with its VoIP feature server and will also port its server to the Microsoft platform.

Hosted IP PBX services are growing in popularity among users, and Microsoft wants a piece of this market via its carrier customers. "With the Sylantro agreement, Microsoft is entering the VoIP carrier space," says Michael O'Hara, general manager of the service provider business for Microsoft.

IDC predicts that the hosted IP PBX market will grow from $60 million in 2004 to $7.6 billion in 2008, with a compound annual growth rate of 282%. Yet, the IP PBX is just beginning to gain traction. "In 2005, hosted IP telephony accounted for .5% of business lines," wrote Frost & Sullivan in a report titled, "North American Hosted IP Telephony and VoIP Access Services Market."

By combining Microsoft's Hosted Messaging & Collaboration software with Sylantro's VoIP feature server, users will obtain new features. For instance, an enterprise worker compiling an Excel spreadsheet listing all revenue targets for each member of his company will have contact information on hand for all his colleagues simply by clicking on the person's name in the spreadsheet. When a particular name is highlighted, a drop-down tool bar tells whether that person is available or in a meeting and gives that person's phone number and the option to dial them directly from the Excel application or send an e-mail or instant message.

Microsoft has made a series of announcements this year leading up to the Sylantro deal. On January 10, Microsoft launched Hosted Messaging & Collaboration, a package that allows service providers to deliver Hosted Exchange Messenger, instant messaging software, and SharePoint, an application for sharing and storing documents. On February 14, Microsoft also launched its Connected Services Framework that enables service providers to provision, manage and amalgamate multiple services. Service providers such as Bell Canada, Cellcom Malaysia and BT are already using the Connected Services Framework. Sylantro plans to integrate its VoIP feature server with Microsoft's Connected Services Framework.