Switching Hour: Hoping to extend its dominance...

Switching Hour: Hoping to extend its dominance of the personal computer market to the burgeoning telephone business, Microsoft Corp. on Tuesday will unveil software products to deliver and manage telecommunications services.

Microsoft says it will make its robust computer software operating system, Windows NT, interoperable with the core switching and networking controls that are used by telephone carriers to, among other things, set up and route calls and perform credit card verification.

The move, which comes a decade after the telephone industry overhauled the switching network’s architecture to boost transmission speeds and pave the way for new services such as caller ID and call forwarding, could lower costs and spur innovation at a time when the new telecommunications reform law is drawing new competitors into the local telephone business.

The foray into telecom is Microsoft’s latest bid to provide industrial-strength software solutions for Fortune 500 companies, which now largely rely on the venerable Unix software system to handle large-scale transactions and support huge numbers of users.

Microsoft is aiming to integrate Windows NT with the switching network so that end users can have more access and control over telephone support, routing and billing systems without having to go to the local phone company to make changes.

“The [Telecommunications Act] of 1996 opens up the market significantly, and in 1998 the European market will also open up” as a result of deregulation, said Bill Anderson, director of telecommunications industry marketing for Microsoft. “Up until now, the telephone market has been a homogenous and incestuous market, with a very finite number of suppliers and telecom companies. But now that’s beginning to change. . . . There’s a whole new range of companies we can sell to.”

For instance, Tandem Computers Inc., a Cupertino, Calif., company working with Microsoft, has developed software that enables users of wireless phones to have their calls automatically switched to a regular telephone when a user arrives at home or at the office, to take advantage of less expensive rates.

With the personal computer market maturing, Microsoft Chairman Bill Gates has been promoting Windows NT with religious fervor, gaining a significant foothold for the operating system in processing financial transactions at banks and institutions as well as in handling electronic mail and other Internet chores for businesses large and small.

But telecommunications, where businesses demand bulletproof reliability, could prove tough to crack. Experts say the reliability of Windows NT remains untested in huge, demanding installations such as those required to run telecommunications services.

Indeed, Unix was developed decades ago by AT&T; in large part to manage phone systems, and has clearly proven its strengths in that area. Windows NT “is still not robust enough to run the entire telephone system,” said Jerry Krasner, director of computer and telephony consulting at Venture Development Corp. in Natick, Mass.

And Microsoft is having some trouble running a telecommunications service of its own--Microsoft Network, an Internet access business.