Microsoft and Nortel are to join forces to sell unified communications -- products which integrate business applications with voice, video, email and instant messaging.
The chief executives of both companies launched the joint operation, which they are calling the Innovative Communications Alliance, to sell and market such offerings at a press conference on Wednesday afternoon.
The push by Microsoft and Nortel into the business communications market pits the companies against Cisco Systems, IBM and Avaya.
In the past, Microsoft's Steve Ballmer has said that all business communications would be Web-based within 10 years.
Ballmer and Mike Zafirovski first said back in July 2006 that they would work together on product integration, but this is the first time they have laid down concrete plans.
At the centre of the four-year deal is Microsoft's Communicator and Office Communications Server software and Nortel's Multimedia Communications Server -- its IP PBX.
The pair announced 11 new services and three new products developed as part of their alliance. The two companies also announced the opening of more than 20 showrooms for their technologies around the world and plan to add about 100 more by the middle of the year.
The global agreement will focus on two centres where the world's top IT professionals will be shown proof-of-concept services -- one in North Carolina in the States and one at Nortel's Eureopean headquarters in Maidenhead, England.
Reuters contributed to this report