Microsoft, Nortel set business communications pact

NEW YORK, July 18 (Reuters) Microsoft Corp. on Tuesday said it has set an alliance with Canada's Nortel Networks Corp., the latest step in Microsoft's drive to promote software as a way to simplify how workers communicate with each other.

Under the agreement, the companies will develop traditional business phone systems into software, with a Microsoft unified communications software platform and Nortel software products to provide further advanced telephony functionality.

They will enter into a four-year agreement that can be extended, under which the companies will license some of each other's intellectual property and deploy the other's technologies in their corporate networks.

REUTERS VJ DB2132