Microsoft said it expects its unified communications product -- the company's effort to link e-mail, instant messaging and phone systems over Internet networks -- to become one of the fastest-growing segments of its $16 billion business division.

Revenue growth from unified communications will outpace "by a multiple" that of the overall Microsoft business division, which had revenue growth of 13% in fiscal 2007, Jeff Raikes, president of the business division said without offering specific figures.

Microsoft said its server software and the Office Communicator software application that runs with it also will transform communications and the industry at large.

"This is just like the computer industry was before the personal computer came along," said Bill Gates, chairman, Microsoft, referring to how PCs dramatically changed a computer market dominated by large mainframe manufacturers.

The Microsoft co-founder said personal computers and mobile phones have taken huge technological strides in recent years, but that office telephones have not kept pace.

Microsoft said its offering is less expensive than those of rivals because it adds to and uses functions in existing products such as Exchange e-mail server and its Active Directory service used by IT administrators.

When asked how a possible slowdown in technology spending could affect demand for the new unified communications products, Raikes said he expects a slowdown not to have any effect because the product can save companies money in travel and phone implementation costs.

Reuters