The companies launched a global Internet telephony service that they said lets businesses dramatically reduce upfront costs and positions firms to add video and data handling features to desktop phones.

"There is a clear demand for this," said Nick Earle, senior vice president of Cisco's European Services Organization. "The economic downturn has accelerated the demand for private cloud solutions out there."

Private cloud solutions are computer applications or services designed exclusively for particular businesses or organizations but hosted online.

Such cloud services are typically paid for as they are used rather than burdening companies with the costs of buying, installing and maintaining the needed hardware or software.

"Enterprises want consumption-based pricing," Earle said. "This actually meets the new budgeting model for CEOs."

Cisco and BT will provide telephony systems that let users "pay as they go."

The endeavour builds on services Cisco and BT have provided in Britain for about a year.

"In essence, we are taking that capability and making it global in tune with the market which is heading toward the cloud," said Simon Farr, who leads Unified Communications and Collaboration Marketing at BT.

"It's a significant launch. We are absolutely working hand-in-hand with Cisco."

Cisco and BT plan to offer the service in North America by early next year and then expand in Europe and into the Asia Pacific region.

"Right now it is voice, but the architecture is built so we can add instant messaging, video, and telepresence into the desktop telephone over time," Earle said. "It will become a hosted universal communications capability."

The move comes as Cisco shifts from specializing in computer network "plumbing" such as routers to being a platform for online services in markets challenging IBM, Hewlett-Packard and other technology titans.

(c) 2009 AFP