Microsoft Corp. and Nortel Networks Corp. have struck a four-year deal to develop and sell products that make it easier for business people to locate and communicate with one another.

The wide-ranging alliance announced Tuesday marks the latest step in Microsoft's ambitious plan to find success in the communications technology business.  Is this because the market for the Windows operating system and Office software continues to grow more saturated?

Obviously.  Here's Steve:

"People say, 'How is Microsoft going to grow?' You know, you usually have to start with something pretty big. Everybody communicates. Everybody uses the phone," Microsoft Chief Executive Steve Ballmer said in an interview with The Associated Press.

The investment in communications technology also shows that Microsoft has a place in a much broader set of devices than the traditional PC, he said.

"Four or five years back people were asking, 'Are people going to need PCs? Maybe all they're going to need is phones,'" he said. "I mean, the fact of the matter is I think people are going to want to have things with big screens and little screens, keyboards and no keyboards -- and I just want them to all run our software."