Microsoft/Vodafone/Moviles In Mobile E-Mail Deal

Microsoft on Monday unveiled the second part of its mobile phone strategy when it launched a service in conjunction with Vodafone, the world's largest mobile phone operator, and Telefonica Moviles.

The three companies say they will sell a service to companies that want to give employees access to office e-mail and calendars via standard cell phones.

Announcements in Britain, New Zealand and Madrid highlighted the first commercial launch of Microsoft's Mobile Information Server, a large computer that provides a secure corridor between company data and a mobile device.

"Microsoft has made it quite clear that it's attacking the mobile market from two directions: the server and the cell phone," says Ben Wood, an analyst at research group Gartner.

The announcement differs from previous, more limited Microsoft announcements--with British Telecommunications-- in that, this time, the Mobile Information Server is designed to give access to any office software from a wide range of handheld computers and cell phones.

In Britain, Vodafone and Microsoft intend to sell the OfficeLive service, which they will manage on their own computers, for about $7 per month per user, plus additional air-time.

OfficeLive will initially give access to Microsoft's own popular e-mail program Outlook, but it will soon expand into other applications and will also offer access to Outlook archrival Lotus Notes later this year.

"All popular applications will be included," says Ian Germer, director of product and strategy for Vodafone Multimedia. "Not just Microsoft applications. Lotus Notes will come later this year."

Employees can check their inbox and reply to e-mail over any WAP 1.1-enabled cell phone, which can be current second generation GSM or 2.5 generation GPRS with always-on Internet.

In Britain, Vodafone intends to grow its revenues from data and Internet access from the current 7 percent of sales to 20 to 25 percent by 2004.

Microsoft Targets Corridor Between Office And Cell Phone

The service is an attempt by Microsoft to dominate the corridor between office software and mobile devices, an area that is just emerging as professionals seek access to their office information anywhere and at anytime.

But customers say it is too early to tell whether they want Vodafone and Microsoft to unlock their office software.

Although U.S. computer and printer maker Hewlett-Packard was referred to as one of four launching customers, that company seems more interested in selling the Mobile Information Server as a service to its enterprise clients as opposed to an internal communications solution.

"The jury is still out on how we're going to do it [giving its sales team and engineers on the road access to their office information]," says Vodafone account manager Mark Southcott. "Our perspective is not just implementing internally, but also seeing whether we can make a business out of this."

Office Outlook Makes Move To Thin Cell Phone Version

As a middle man between the office and the handset, Microsoft is also in a strong position to make its own software look a lot better than someone else's when e-mail hits a handset.

"Microsoft has said its service is optimized for its phone client," Wood says. "This does leave open a question mark of what it means for applications from other software vendors."

Thin versions of Microsoft Mobile Explorer and Outlook will come with certain handsets later this year, and these applications will automatically be launched if office e-mail is being pulled in by the cell phone user, says Adam Anger, Microsoft European marketing manager for mobile devices.

However, these new handsets are several months away and Vodafone will introduce the new service over rather bland WAP browsers, which come as standard with any WAP phone currently sold.

"This is the first version of the service," says Jonas Persson, commercial director of Microsoft's mobility solutions center in Stockholm. "We're not there yet."

Three software companies battle for a dominant position on mobile devices. Microsoft and Palm fight for supremacy in the handheld computers space, with Palm still having most of that market.

Meanwhile, Britain's Psion-owned Symbian also faces competition from Microsoft, but seems to have the upper hand when it comes to future generations of smart cell phones, as the world's top five cell phone makers have licensed its software.

Microsoft has so far only signed up second-tier cell phone makers, such as Britain's Sendo, Japan's Mitsubishi and South Korea's Samsung.

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