Microsoft Corp. (NASDAQ: MSFT) and Nortel Networks Corp. announced that their alliance is expanding to include new communications products for 2007.

The companies said new products will take advantage of joint technologies to simplify Voice over Internet Protocol (VoIP) solutions, interoperability with Nortel hardware and the latest version of Microsoft Exhange, and additional features to their existing conferencing solution.

In addition, the companies said that they have already equipped more than 20 joint demonstration centers in North America and Asia, with more than 100 to open by mid-year.

The average employee gets more than 50 messages every day on up to seven different devices or applications, said Microsoft CEO Steve Ballmer in a released statement. Software can and will help address the ongoing challenge of managing communications and this challenge is the driving idea behind our alliance with Nortel.

Together, we will evolve VoIP and unified communications to integrate all the ways we contact each other in a simple environment, using a single identity across phones, PCs and other devices.

Nortel also added 11 core integration services to help customers build, deploy and support joint solutions from the companies, including end-to-end project management.

The new solutions include:

- UC Integrated Branch, a product that will combine Nortel and Microsoft technology to deploy VoIP and unified communications in remote offices by the fourth quarter of 2007.

- Unified Messaging, which will allow interoperability with Nortel Communication Server 1000 and Microsoft Exchange Server 2007 by the second quarter of 2007.

- Nortel Multimedia Conferencing to Microsoft Office Communicator 2007, which will deliver a unified experience across applications such as voice, instant messaging, presence, and audio and video conferencing. The solution will be available by the fourth quarter of 2007.

Shares of Microsoft rose 18 cents in mid-day trading to $31.34 on the Nasdaq exchange.

Microsoft Steve Ballmer