Given the advantages of working with Microsoft, Drummond said the Converged Office with the CS 1000 "is actually a better product" than Nortel's Multimedia Communications Server product.

Zeus Kerravala, an analyst at Yankee Group Research Inc. in Boston, said he wasn't surprised that customers might find Converged Office better than the Nortel MCS. Working with Microsoft is also a wise move for Nortel as it emerges from years of financial problems, he added.

"For Nortel to rebound, partners like Microsoft are going to have to play a key role," Kerravala said. Without partners, Nortel cannot create a large enough presence to take on market leaders like Cisco, he added.