Partner/Competitor Matrix

While Google’s moves are beginning to position it as both a potential partner and competitor, Microsoft may be even more so in that position. Microsoft today provides a variety of software and services to fuel service providers’ core businesses, from plain old server software to IPTV middleware and set-top software and more. At the same time, Microsoft’s telecom ambitions, particularly in the area of unified communications and software-as-a-service, place it potentially in competition with the service provider market. “Coopetition” isn’t a new concept in the telecom world, but for service providers a potential Microsoft/Yahoo deal adds yet another dimension of complexity to the partner/competitor matrix.

Web-Telephony Route-Arounds

Yahoo has been fairly silent on the Web-telephony/unified communications front. Microsoft, on the other hand, has broad ambitions there with the release late last year of Office Communications Server and its unified communications strategies. And Google is clearly eying the telephony market as well with its spectrum bids, Grand Central acquisition, VoIP-enabled Google Talk software. While no Web-based telephony company or startup has taken a leadership position yet that would cast fear into the hearts of service providers, a strong move by a larger player like Microsoft/Yahoo or Google will likely have a much bigger impact. It’s an area carriers must continue to watch closely.

A Grand Duopoly

We’ll take a bit of a U.S.-centric view here, but clearly a Microsoft/Yahoo combination will compete with Google as the two big dogs in the online/mobile search and advertising markets. Will the major U.S service providers, notably AT&T and Verizon, pair up and partner along those lines as well? So far, AT&T seems to be playing both sides of the fence, dealing with Yahoo on portal content and ads and working closely with Apple on the iPhone (noteworthy because Apple and Google seem linked on a number of fronts including Google CEO Eric Schmidt serving on Apple’s board). On the social network front, Microsoft has aligned with Facebook while Google is linked with MySpace. Will we seem the same sort of choosing up sides on the Web/telco side? One would think so.