Well, Microsoft has let the cat out of the bag and leaked word that Microsoft OCS 2010 will "remove the need for PBX equipment within your organization". I'm certainly not surprised. Let's flash back to last year where I wrote and article titled Microsoft OCS 2007 R2 Heralds the Death of the IP-PBX. In it I wrote:

"Office Communications Server 2007 R2, debuting just one year after the Microsoft unified communications launch, highlights the pace of innovation that is possible with software," said Stephen Elop, president of the Microsoft Business Division at Microsoft. "This new release puts Microsoft on a rapid path to deliver voice software that does much more than a network private branch exchange (PBX) and with much less cost."

Interesting quote, eh? Does this not sound like Microsoft is sounding the death knell for the network PBX (IP-PBX)? This is an interesting turn of events. Microsoft hasn't been pitching OCS 2007 as an IP-PBX replacement, but rather as something complementary. In fact, I remember talking with Microsoft about this last year (2007) and they went out of their way to explain that OCS 2007 is not an IP-PBX replacement. Also, Microsoft has many IP-PBX partners in the OCS 2007 arena, including Mitel, Nortel, and others. Slip of the tongue? Or is Microsoft going full-out into the IP-PBX arena? Certainly, the fear by many IP-PBX vendors is that one day Microsoft will offer a full-fledged software-based IP-PBX replacement, but I don't think that day has come yet - even with the new features in OCS 2007 R2.

Now with OCS 2007 R2 fully launched and with added support for direct SIP trunking, the next logical step is a 100% Microsoft UC solution without the need for a PBX/IP-PBX at all. Of course, Microsoft OCS 2007 R2 is still currently very limited in the support it has for SIP IP phones. Most businesses aren't ready to toss desktop phones for a 100% software-based softphone solution, i.e. Microsoft Communicator. So OCS 2010 will have to support SIP phones from popular SIP phone players such as Aastra, Polycom, and snom. Perhaps Microsoft will borrow or acquire the technology from SmartSIP, which recently launched an add-on for OCS 2007 R2 that enables any SIP phone to work with OCS.

So where did I hear that Microsoft was aiming to eliminate the need for a PBX in OCS? I discovered the information within a document on Microsoft's website titled 'Microsoft Unified Communications Business Value Tool'. On Page 24 it states:

You will deploy Office Communications Server 2010, which expands on the communications capabilities delivered in OCS 2007 R2. This release is designed to remove the need for PBX equipment within your organization and replace it with an integrated communications system that dramatically reduces management costs and gives end users innovative tools to communicate and collaborate across geographic boundaries from their office, home or on the road.

Not only do they state they will eliminate the PBX, but they declare the next version name of OCS (OCS 2010), which as far as I know Microsoft hadn't announced yet. Many UC/VoIP experts predicted that eventually Microsoft would attack the IP-PBX space alone, but one has to wonder if alienating their IP-PBX partners is such a good idea. One of their strongest OCS partners is Nortel, who is experiencing financial difficulties and is probably not in a position to pressure Microsoft to back off. Mitel is another strong partner as well that could be impacted by Microsoft's decision. Of course, Nortel and Mitel could still go after the SIP-based IP phone space within the OCS arena, but the IP phone market is much more of a commodity with a much lower margin than a full-fledged IP-PBX. Of course, there's always the high-end media phone market with large margins. For instance, Polycom recently announced their VVX1500 media phone, which created some buzz.

I doubt OCS 2010 will have all the advanced call center functionality you get from Nortel, Avaya, Mitel, etc. After all, this will be Microsoft's first release that doesn't rely on the IP-PBX to do the intelligent call routing & handling. They'll probably have some rudimentary call queues and skills-based routing, but not much else. Don't expect predictive dialing in OCS 2010, a mainstay of the call center market. Still, a 100% software-based IP-PBX with unified communications capabilities will be a compelling choice for many businesses.