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Microsoft is working on a "service in the sky" for unified communications, an executive said Tuesday at the VoiceCon conference in San Francisco.

The company's current focus for the fast-growing trend of combining voice, video, text and other forms of communication is Unified Communications Server 2007, which Microsoft said it will unveil October 16 at a San Francisco event featuring Chairman and Chief Software Architect Bill Gates. But at the same time, it is working on providing these capabilities as a service, said Warren Barkley, a principal group program manager at Microsoft. He mentioned the project in passing at the end of an early-morning panel session at VoiceCon. He didn't give a timeline for availability.

Barkley cited the need to serve small businesses that increasingly are widely distributed. Unlike large enterprises, they generally lack the IT resources to set up and run a communications system that reaches employees around the world.

Microsoft already offers a hosted collaboration platform, LiveMeeting, and is moving to offer applications such as CRM (customer relationship management) as services. One of the key benefits of unified communications is the ability to integrate voice and other communications into productivity applications, and Microsoft's move could be aimed at a convergence of the two trends.

Cisco Systems, still a rival in unified communications despite the two companies' announcement Monday that they will make their products work together, earlier this year acquired hosted collaboration provider WebEx. But neither company has talked much about offering unified communications itself as a network-based service.

WebEx already offers WebOffice, a set of applications offered as a service, although Cisco said at the time of the acquisition that it wasn't planning to become a SAAS (software-as-a-service) powerhouse.