Ontario-headquartered global telecoms giant Nortel on Thursday announced a groundbreaking four-year alliance with Microsoft that could impact on web-based communications worldwide.

Branded the Innovative Communications Alliance, the partnership will develop and market software for integrating voice, email and video services for businesses. It will draw on Nortel's experience of digital innovation and Microsoft's software expertise.

Both companies will contribute to development and marketing costs, as well as cross-licensing each other's patents.

To quote the corporate prose of the formal announcement: "[The ICA] involves a shared vision for the future of business communications and a shared strategy that involves tight integration at the technology, channel, business engagement and customer experience levels."

All of which, believes Nortel ceo Mike Zafirovski, will generate sales of more than $1 billion over the next two years. The agreement, he said, will give the Canadian firm a head start over rivals focussing on software-based communications products.

Microsoft, increasingly slow off the starting-block in the enterprise race, has finally woken up to the fact that rivals such as Cisco and IBM have stolen a march in the mushrooming field of VoiP [Voice Over Internet Protocol] and other net-centric media.

At the web-based ICA press conference, Microsoft ceo Steve Ballmer prophesied that all business communications will become web-based. "It's 100% that it's going to happen and happen quickly. The only question is how quickly in business?"

Data sourced from BBC Online; additional content by WARC staff