11/19/2007 -- It looks like things are about to get a lot more competitive for Cisco Systems Inc. and other players in the IP phone segment. That's because Microsoft last week announced Response Point 2007, its long-awaited IP phone solution for SMBs.

Industry watchers are impressed with Response Point, which -- even though it's Microsoft's first foray into IP phones for SMBs -- turns out to be a reasonably feature-complete offering.

"[I]t creates opportunities for [Microsoft] to compete for small business voice accounts that it was not able to address effectively with its existing portfolio," said Robert Arnold, a senior analyst for enterprise communications with consultancy Current Analysis. "However, the new platform enters an extremely crowded market and it may struggle for both visibility and differentiation against other sophisticated offerings."

All the same, Arnold conceded, Microsoft's mega-brand recognition gives it an advantage: "Microsoft is now entering this space with a communications platform that is competitive in its first release in terms of features and applications capability."

There's a lot to like in Response Point, according to Arnold. For one thing, it more directly targets voice communications -- and is a better fit for SMBs, to boot -- than Redmond's more ambitious Office Communications Server offering.

"Adding Response Point to its portfolio enables Microsoft to pursue opportunities within SMB voice markets that were previously unavailable to the company," Arnold said, citing Response Point's end station auto-discovery features, auto attendant, embedded voicemail, CTI, Outlook integration and other capabilities which help make it competitive with established SMB PBXs in its first release.

Just how much does Response Point up the competitive ante? It's comparatively inexpensive, for starters: Microsoft partners Quanta and D-Link sell 20-phone Response Point systems for less than $5,500, according to Arnold.

"Additionally, Microsoft's well-publicized financing program allows customers to make monthly payments on Response Point purchases, which increases the appeal of the system to small business owners wary of large capital investments in new technologies," he said.

Elsewhere, Arnold pointed out, customers can mix and match elements from different Response Point models, conceivably using D-Link phones with Quanta Syspine gateways.

"Response Point does not afford customers the same types of growth opportunities presented with competing SMB PBXs," he conceded. "Small systems from Alcatel-Lucent, Avaya, Cisco, Mitel, Nortel [and] Siemens Enterprise Communications...offer solutions that can grow in a modular fashion through stacking servers, adding expansion cabinets and even migrating to larger systems while preserving existing investments."

At this point, Arnold said, Microsoft can't offer customers who outgrow its default Response Point capacities any similar options. --Stephen Swoyer