Companies Worldwide Embrace Microsoft and Nortel Communications Solutions

Innovative Communications Alliance celebrates one-year anniversary.

REDMOND, Wash., and TORONTO — July 16, 2007 — One year ago Microsoft Corp. and Nortel* entered into a unique alliance to transform business communications by combining Nortel’s network quality and Microsoft’s reliable unified communications software. Today, businesses are embracing the benefits of the alliance and have purchased and are deploying more than 430,000 licenses for joint solutions. As such, these customers are enhancing their business communications for improved productivity and to help lower total cost of ownership.

Over the past year, Microsoft and Nortel have begun to streamline their licensing to make it easier for customers to buy and manage joint solutions, hosted more than 60 road show events in 35 countries, and opened 100 lab and demonstration centers worldwide for companies to experience the solutions firsthand. As the alliance enters its second year, the companies are continuing their joint research and development across enterprise, carrier and mobile product lines and are poised to ship a variety of new and updated products in the coming months, including Nortel’s UC integrated branch.

“Our relationship with Nortel is an important component of our strategy for unified communications, and over the past year we’ve hit significant milestones that benefit both companies,” said Gurdeep Singh Pall, corporate vice president for the Unified Communications Group at Microsoft. “In the year ahead, we expect to see even more robust customer interest around the world based on our joint technology solutions.”

“Nortel’s alliance with Microsoft has been a tremendous success for us and our customers,” said Steve Slattery, president of Enterprise Networks at Nortel. “Our deep collaboration in product development is providing businesses with better ways to communicate, and our joint go-to-market activity has already produced impressive results. In addition, our alliance with Microsoft is opening doors to new customers for our entire enterprise portfolio and is a key reason for the accelerated performance of our Enterprise Solutions business year over year.”

Global Customer Adoption

Customers such as Indiana University (IU), Worcestershire Health Information and Communications Technology (ICT) Services (WHICTS) and 4ward Momentum have embraced the industry relationship and continue to experience significant business value.

IU: Academic Excellence Through Better Communications

Indiana University, one of the largest universities in the United States, is deploying Nortel’s Communication Server (CS) 2100 and a beta version of Microsoft® Office Communications Server 2007 to improve desktop productivity and give workers access to combined telephony, e-mail, collaboration, presence, instant messaging and desktop services.

“Scholarship and student lifestyles are very communication-intensive,” said Brad Wheeler, vice president for information technology and chief information officer at IU. “Our move to unified communications at IU begins an era of long-anticipated media convergence to give our students and faculty an educational advantage at one of America’s most IT-savvy universities.”

Unified Communications Makes for Healthier Patients

As the central IT organization serving three National Health Service trusts in Worcestershire, England, Worcestershire Health Information and Communications Technology (ICT) Services (WHICTS) is deploying Nortel’s CS 1000 and Microsoft Office Live Communications Server 2005 to connect health professionals across the county more efficiently and create better ways for remote employees to share information, thus helping to streamline patient care, have a positive impact on productivity and reduce travel costs.

“We cover a large, remote area, and until now our health professionals have had to spend a considerable amount of time traveling between facilities in order to consult patients and collaborate with colleagues,” said John Thornbury, director of ICT at WHICTS. “The primary impact of unified communications will be seen across the primary care facilities, where the way we operate will become significantly more efficient, while further down the line, telemedicine will make it possible to share applications and information across disparate locations. Our new Nortel and Microsoft solution will significantly reduce the time staff members spend on the road, enabling us to cut travel costs, use time more efficiently and be more environmentally friendly.”

Simplicity in Communications: A Forward-Thinking Idea

4ward delivers powerful, innovative, yet user-friendly outsourced IT, telephony, and unified communications solutions targeting small and medium-sized businesses in Hong Kong. 4ward initially deployed a unified communications solution consisting of Nortel’s CS 1000E with CallPilot and Office Live Communications Server 2005 for its internal IT network as a proven success case before offering unified communications services to its customers.

“4ward makes IT and communications solutions easy to buy, easy to own and easy to live with so customers can focus on their core business, not their infrastructure,” said Brad Pfeffer, managing director, Asia-Pacific at 4ward. “Our unified communications system combines the power of Nortel’s IP telephony with the collaboration capability of Office Live Communications Server and the unified messaging features of Microsoft Exchange Server 2007 to provide a seamless user-friendly experience.”

More information about the Innovative Communications Alliance is available at http://www.innovativecommunicationsalliance.com

About Nortel

Nortel (NYSE/TSX: NT) is a recognized leader in delivering communications capabilities that make the promise of Business Made Simple a reality for our customers. Our next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel’s technologies are designed to help eliminate today’s barriers to efficiency, speed and performance by simplifying networks and connecting people to the information they need, when they need it. Nortel does business in more than 150 countries around the world. For more information, visit Nortel on the Web at www.nortel.com For the latest Nortel news, visit www.nortel.com/news

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx