Alcatel (NYSE:ALA) announced a couple of days ago a partnership with Microsoft (Nasdaq:MSFT) geared towards developing an integrated IPTV delivery solution.  The idea is enable MSOs to deploy IPTV faster and cheaper.  This relationship is the first significant one that unites a major triple play solution vendor and one of the top IPTV software vendors.

Interestingly enough, prior to signing this agreement, Microsoft and Alcatel were competing in the IPTV middleware segment (in fact, Telecom Italia was trialing both platforms).  Alcatel had acquired a couple of software houses to create its own IPTV offering (the Open Media Suite).  But Microsoft kept piling win after win (SBC, Verizon, a trial at Bell South, and Swisscom. among others), and Alcatel had to implement Microsoft's IPTV system in deals where it was the primary equipment supplier for DSLAMs and routers (such as SBC, for instance).

So nothing like a partnership to solve the issues.  By jointly developing an IPTV solution with Microsoft, Alcatel saves considerable system integration time (since it can integrate Microsoft's software into its hardware).  Microsoft wins a way to tap into the world's large carriers.