Microsoft Eyes Mobile Messaging Market

Cell phones have been steadily morphing into portable computers that busy executives are using to keep in touch with clients, suppliers and co-workers while on the go. Now, after passively watching this market take hold, Microsoft (Nasdaq: MSFT) has decided that it wants to become a key player, an attainable but not an inevitable goal.

The company has been lured by the growing importance and increased use of wireless e-mail . "Businesses are using technology to provide their employees with more mobility because it makes them more productive," notes Monica Basso, research vice president at market research firm Gartner (NYSE: IT).

Because executives are out of the office so much, their view of cell phones has changed. By the end of 2008, Gartner expects half of all employees who access e-mail via a wired PC to also rely on wireless e-mail via some type of handheld device, such as a smartphone. "Accessing information simply by turning on a phone and clicking on your messages is easier than trying to download data with a laptop computer," Gartner's Basso told TechNewsWorld.

Gearing Up for Five-Fold Increase

Consequently, sales of the handheld devices are on the rise. By the end of 2006, the number of wireless business and consumer e-mail users is expected to reach 20 million worldwide -- and that number will swell to 100 million in 2010, according to Gartner.

Microsoft wants a part of that action. Its latest foray is based on simplifying enterprise messaging management by leveraging its Exchange Server infrastructure, which is already running in many companies' networks.

The vendor's mobile messaging system consists of Exchange Server Service Pack 2 and Messaging and Security Feature Pack (MSFP) software that is now bundled in many handheld devices that run the Windows Mobile 5.0 operating system. The combination automatically sends out new e-mail and contact information to handheld devices over cellular networks in a manner that Microsoft calls Direct Push.

The new system is simpler to operate than the previous one. Earlier, users relied on Exchange's Short Message Service (SMS) messaging features. When a new e-mail reached an Exchange server, the server generated an SMS text message, which was sent to the user's smartphone. The message told the user to log on to Exchange and download the new e-mail message.

One Versus Many

The new Microsoft system enables IT departments to manage one vendor's suite of products rather than work with a series of standalone systems. Windows Mobile devices now support high-quality voice functions as well as mobile e-mail on a single device, and a single corporate computing infrastructure rather than multiple devices and complex computing infrastructures. In such an integrated environment, companies can take advantage of the clustering and backup features found with the Windows operating system.

In the Microsoft approach, Exchange directly delivers e-mail to and from Windows-based mobile devices without requiring complex middleware or additional third-party software. Since such items are often required by many of its competitors, the Microsoft approach can be a less expensive option than alternatives.

Microsoft has provided a functional generic wireless e-mail option for customers, and many may want it customized to meet their business needs. "When it comes to generating support from third parties, Microsoft does as good a job as any vendor in the industry," notes David Via, an analyst with e-mail market research firm Ferris Research.

Mimicking the Desktop

End users may also benefit from the recent Microsoft initiative. The handheld system will run applications similar to those found on their desktop and server systems, so training and application integration is simplified.

While the Microsoft system offers some potential benefits, it does possess some limitations as well, however. In certain cases, users may find that their carrier and device selections do not mesh; for instance a Palm Treo 700w, which runs Windows Mobile 5.0, may be available only through Verizon, but a company's mobile carrier may be Cingular.

Microsoft is moving into a competitive market, one that has been dominated by Research In Motion (Nasdaq: RIMM) with its Blackberry system. To date, business users have been fiercely loyal to the popular handheld.

BlackBerry Popular With Third Parties

One reason is the company has been successful in convincing third parties to support its platform. "One of the best kept secrets in the industry is the volume of add-on applications available for the BlackBerry," Ferris Research's Via told TechNewsWorld. "RIM has done an excellent job in working with third parties."

Because RIM provides all of the pieces (hardware, applications, and management software) along a connection, it can offer higher availability than even the Microsoft approach. RIM's focus on making sure that BlackBerry connections stay up has meant that users have come to expect 99.95 percent availability with these systems.

Security has been another draw. "Large enterprises are quite concerned about e-mail security and the BlackBerry system is able to ward off outsiders because it is proprietary and closed," said Ferris Research's Via.

The system offers more functionality than Microsoft's Direct Push. While the new release is better than previous iterations, the Microsoft system lacks e-mail search features, cannot easily delete a large number of messages, and offers limited integration between its calendar and e-mail features.

As a result, Microsoft faces a significant challenge in the wireless e-mail market. The market may grow to be so large, however, that there will be room for multiple players.

"It will be very difficult to displace RIM in the short term, but Microsoft will do well in the wireless messaging market simply because it is growing at such a healthy rate," concluded Gartner's Basso.