Microsoft makes more stabs at wireless
Windows on the phone has never matched Windows on the desktop. Can two new plans help? Fortune's Stephanie Mehta scrutinizes Microsoft's strategy.
NEW YORK (Fortune) -- Microsoft's is stepping up its quixotic, seven-year quest to become as ubiquitous on mobile phones as it is on desktops.
At a convention of the Cellular Telecommunications Industry Association Tuesday, Microsoft (Charts, Fortune 500) CEO Steve Ballmer will unveil two initiatives aimed at boosting Microsoft's presence in the mobile world. The company has built a new server specifically designed to help corporate IT departments manage their fleets of mobile devices. The Redmond, Wash.-based company also is financing a new startup, Enterprise Mobile, that will manage and deploy mobile devices for corporate customers.
The announcements, plus Ballmer's planned appearance as a keynote speaker at the wireless industry's preeminent event, underscores Microsoft's commitment to attempting to conquer the wireless world. "We started with desktop. Over the last 17 years we've built a server platform. We're in the process of building an online platform, and wireless represents the fourth platform we're trying to build," says Pieter Knook, senior vice president of Microsoft's mobile communications business. "With one billion handsets and three billion subscribers worldwide, from a numeric standpoint it certainly is the biggest opportunity."
Easier said than done. Globally Microsoft's Windows Mobile operating system for so-called "smart phones" remains a market laggard, while the Nokia-backed Symbian operating system dominates - particularly in markets such as Japan and most of Europe. Meanwhile, it faces stiff competition for corporate users with Research in Motion's (Charts) popular Blackberry messaging platform.
Yet Microsoft has little choice but to move to the mobile world. In many emerging markets, the mobile phone may be the only computing device populations use; globally, as Knook notes, wireless devices far outnumber "fixed" computers. With its two announcements today, Microsoft seems to be aiming at a very specific, and potentially lucrative, niche: Corporate customers who want to deploy wireless devices much the same way they issue PCs or laptops.
"Enterprise Mobile will help with the deployment, and tools like our server can do the management, so your (IT department) is not spending all its time managing these things," Knook says. Indeed, the idea for Enterprise Mobile, a Watertown, Mass.,-based company, was prompted by a conversation founder Mort Rosenthal had with Ballmer about the difficulty of deploying mobile devices in corporate IT departments. (Microsoft is an investor in Enterprise Mobile.)
Most companies' tech teams don't have the expertise to work with mobile devices, while other groups lack the resources to evaluate and purchase all the new gadgets coming online. Meanwhile, a growing number of employees are clamoring for smart phones to help them take their desktop applications on the road.
Rosenthal says his ideal clients are looking for more than just e-mail on their phones. "We know a lot of companies that are happy with their RIM e-mail solutions, and if e-mail is all they are going to do, they could easily stay happy," Rosenthal says. "All the customers who we're engaged with have at least some sort of 'beyond messaging' twinkle in their eyes."
Though it is formally launching today, Enterprise Mobile already is working with a handful of companies including Au Bon Pain. It also is working with software vendors to help them get their products optimized for use on Windows mobile devices.
Donald Frieden, CEO of mobile software provider SAT Corp., says he thinks Microsoft's involvement in Enterprise Mobile, plus its new server, will help accelerate corporate America's adoption of mobile data services. "Microsoft invented software distribution, they are reinventing the deployment of mobile across large enterprises," he says.
Carriers such as AT&T (Charts, Fortune 500), the nation's largest wireless operator, see Enterprise Mobile as a way of extending their reach in enterprises. While AT&T has its own sales force that works with big companies to deliver data services, Jeff Bradley, a senior vice president in AT&T's wireless business-to-business division, says a third party such as Enterprise Mobile can help with the nuts and bolts of deploying devices and mobile software in a big company -- helping AT&T sell more data services. "I want companies like Enterprise Mobile to remove the obstacles to adoption," he says.
Indeed, the main issue corporations may have to contend with is the fickle nature of the wireless end user. While few people care about the PC on their desks or even the laptop assigned to them by the IT department, executives take their mobile devices seriously. "Will the device be bought for you by the company, or will you buy a device from a set choice of brand names?" muses Microsoft's Knook. He admits there may be some employee resistance to being told they can only pick from a small number of Windows Mobile-enabled devices. Perhaps Ballmer's next order of business will be to get Windows Mobile installed on the next wave of "it" phones.