Industry experts believe that Microsoft's recent purchase of VoIP telephony firm Media-streams.com marks the latest stage of a campaign to expand the software giant's desktop phone capabilities in a bid to penetrate smaller enterprise markets.

"Microsoft's acquisition of Media-streams.com is not significant in and of itself, but Gartner sees it as another indicator of Microsoft's advance into the enterprise telephony market," said Gartner vice president Bern Elliot.

The acquisition provides Microsoft with Media-streams.com's ePhone click-and-call product, which is a small-enterprise system with a subset of PBX features designed to assist in desktop-oriented telephony and to provide telephony based on Session Initiation Protocol (SIP).

The product contains an advanced architecture based on SIP-CSTA (Computer Supported Telephony Application).

EPhone integrates with Microsoft Exchange, Outlook and Active Directory, and has IBM Notes email product integration.

"Although Microsoft has not disclosed its plans, Gartner believes that the company seeks to improve the desktop telephony capability of Communicator, integrate it with future releases of Office and add to its consumer products," said Elliot.

The analyst pointed out that Microsoft's strategy is designed to allow it to offer a more complete telephone offering for small and midsized businesses.

Elliot also believes that some of these functions will also find their way into large-enterprise telephony products.

Zurich-based Media-streams.com has experience in the French and German markets, which may help Microsoft penetrate the European telephony space.

Microsoft announced on 3 November 2005 that it was buying privately held Media-streams.com. Terms of the deal were not disclosed.

Gartner advised firms using or evaluating Microsoft Live Communications Server and Communicator to not expect any changes to these products in the near term as a result of this acquisition.

In the longer term, the analyst firm advised Microsoft customers to expect these applications to include ePhone-like functions as an option.