Microsoft, which late last month unveiled a roadmap for new unified communications capabilities to be integrated with software such as Microsoft Office, has aligned with Nortel Networks on a broad, four-year unified communications strategic partnership.

Announced today by Microsoft CEO Steve Ballmer and Nortel CEO Mike Zafirovski, the agreement initially calls for the companies to integrate research and development efforts and cross-license intellectual property related to business enterprise solutions and software. Microsoft and Nortel also will jointly train and integrated sales team that will deliver new unified communications products and applications beginning next year. The companies already have created a software interface between Nortel’s CS 1000 enterprise call server and Microsoft’s Live Communications Server.

Microsoft officials said the partnership helps Microsoft deliver on its promise to embed IP telephony and more communications capabilities into its software. “This is really about converged communications, and it punctuates the fact that voice is absolutely part of our roadmap at Microsoft,” Ballmer told a webcast audience. “What we’re both endorsing is a software-centric view of communications.”

Zafirovski said the unified communications market could mean $1 billion annual incremental revenue to Nortel. He added, “We believe the functions of tradition business phone systems are moving to software. This will make our combination of unified communications products easier to use.”

Nortel has been pressing forth on a unified communications philosophy for the last few years, with products such as its Multimedia Communications Server 5100 and CallPilot Unified Messaging System carrying the banner. However, Zafirovski said earlier this year that the Canadian company would shed some product and business units where it couldn’t be a market leader to focus on handful of core growth markets—he identified enterprise communications as one of those growth markets.

“This agreement is a major milestone for Nortel,” he said. “It’s also a perfect example of how we want to organically manage our R&D.”

Sales efforts of the partners initially will focus on upgrading about 20% of Nortel’s installed customer base. Microsoft’s unified communications roadmap and IP telephony promises have generated some uncertainty thus far among potential competitors who have been wondering how the software giant will address the opportunity. “We’ve expected Microsoft in IP telephony for a while,” said an official at one IP PBX vendor who declined to be identified. “We’re not sure how this affects us, but we are concerned it could stall a lot of enterprises that were in the middle of upgrades.”