Nortel Networks and Microsoft together rolled out a raft of products and services on Wednesday aimed at delivering business communications over software and Internet networks.

Nortel, the biggest maker of telephone equipment in North America, and giant software company Microsoft aim to capitalize on a shift by companies to cheaper Internet-based communications.

The partnership, first announced in July, has yielded "dozens" of customer deals thus far, with hundreds more in the works, according to the two companies. Nortel said it would reap about $1 billion in new revenue over the life of the four-year agreement.

The two are working on integrating business communications such as e-mail, phone, instant messaging and video conferencing on Internet networks. They say their technology will improve productivity and reduce costs to their customers.

The push by Microsoft and Nortel into the business communications market pits the companies against Cisco, IBM and Avaya.

In the past, Microsoft's Ballmer has said that all business communications will be Web-based within 10 years.

Ballmer declined to specify how much the partnership could means in terms of new business for Microsoft, but said the initiative could encourage customers to adopt more expensive software licenses to take advantage of new products available as part of the alliance.

Microsoft and Nortel also said Royal Dutch Shell is among the customers that plan to move their networks onto a software-based communications system they are building.

On Wednesday, they announced 11 new services and three new products co-developed as part of their alliance. The two companies also announced the opening of more than 20 showrooms for their technologies around the world and plan to add about 100 more by the middle of the year.