News

Microsoft Ends Response Point Phone System

• By Kurt Mackie
• May 17, 2010

Microsoft on Friday announced that it has discontinued its Response Point phone system for small businesses.

Sales will end on Aug. 31, the Response Point team announced, and Microsoft is also ending product support and partner support. The decision isn't exactly new as Microsoft pulled its engineering team back from the product in May 2009. Now, however, Microsoft is pulling the plug.

"After taking a good look at the Microsoft Response Point offering and the needs of small businesses, we've decided to discontinue the sale, support and development of the Response Point phone system for small businesses, effective August 31, 2010," the team wrote.

Microsoft also said that demand for Response Point was not enough to sustain it as a "viable standalone business moving forward." However, the company promised to address the needs of small businesses in the future with its Office Communications Server (OCS) product.

Response Point software is a PBX replacement designed to serve from one to 50 employees. It was billed as easy to install and maintain by nontechnical workers and enabled voice over Internet Protocol communications. Response Point featured a voice recognition system that let users contact their officemates by simply speaking a name into the receiver. The software was priced at about $5,500 for a 20-phone system, with extra phones costing $149 to $159 each.

Rob Horwitz, research chair at Directions on Microsoft, speculated that the delay in announcing the discontinuance of the phone system may have had to do with Microsoft's completion of OEM contracts. He noted several possible reasons for ending the product.

First, there likely was a technology overlap with OCS and it was costly to both develop the product and maintain the partner support channel for it. Second, the small business PBX market held little profit, "especially for a company that needs hundreds of millions to make the revenue meter budge by a perceptible amount," Horwitz explained by e-mail.

Finally, Horwitz noted that Response Point's main champion, former CEO Bill Gates, has moved to other endeavors.  Gates now serves as Microsoft's chairman and is less involved with the company's operations.

OCS is a complex product, and it's not clear how it might be simplified for small businesses. Horwitz speculated that rather than rolling Response Point efforts into OCS, Microsoft might be "better off with a hosted solution for small businesses."

Customers can continue to use the Response Point system after Aug. 31, according to Microsoft's announcement. The Response Point Web page will be maintained until Nov. 1, 2011.