Microsoft Blocks Reimbursements for iPhone, BlackBerry, Android

Microsoft has decided that it won't reimburse its employees who decide to use a BlackBerry, iPhone, or Android-based device.

The news originally broke on Silicon Alley Insider, which received a tip that Microsoft discontinued a variety of its perks after cutting its work force earlier this year. According to the report, "Microsoft won't pay for its employees' Apple iPhone data service plans anymore, even if they're used significantly for work purposes." The report went on to say that Microsoft "will only reimburse data plans for Windows Mobile-powered smartphones."

A Microsoft representative confirmed the report, telling Silicon Alley Insider that the company's reimbursement plan is, in fact, "limited to Windows Mobile devices." The representative went on to say that the "policy took effect as part of the broader cost saving measures announced earlier this year."

In typical fashion, the Web exploded with news of the announcement. Some said it wasn't a big deal, claiming a variety of companies have decided against reimbursing employees for their cell phone coverage to save money. It's simple economics. But others weren't so happy with the move.

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Those who typically take Microsoft to task for practically everything the company decides to do, said it's just another example of the software giant taking liberties with employees and using its power to shut out its main competitors. They say that it's just more of Microsoft being Microsoft.

The reality is this: it makes sense for Microsoft to stop paying for all those plans. It has nothing to do with Microsoft's so-called hatred for Apple, Google, RIM, and Symbian, and everything to do with its desire to limit the amount of unnecessary expenses it needs to dole out every month to employees.

Microsoft is struggling in the current economy. Sure, the company is still making bundles of cash each quarter, but its profits have fallen by more than $1 billion. It was forced to layoff employees for the first time in its history earlier this year. That's not a sign of a company that's performing at the right level to maintain its success. So, in an attempt to stem the bleeding, Microsoft decided that phone reimbursements were no longer in effect.

Some are probably wondering why, if Microsoft didn't have any ulterior motives, it would only pay for Windows Mobile devices from now on. It's a fair question. But consider the alternative: headlines would turn from Microsoft shafting employees to Microsoft executives turning their backs on their own platform. Critics would have a field day. And Microsoft press representatives would need to answer questions about the company being cheap, rather than focusing on more pressing issues.

Loyalty, anyone?

There's another element at work that isn't getting enough attention: company loyalty. Although there may not be anything sinister behind Microsoft's decision to stop reimbursing employees who don't use Windows Mobile devices, I do think it can be used to the company's advantage. There's something to be said for supporting the company you work for. In the enterprise, it's a common issue with companies that have poor morale. They're always trying to find ways to make employees happier, so they will spend more time investing in the company, instead of waiting for the company to invest in them. It's business 101.

So, now that Microsoft won't be paying for BlackBerry devices and iPhones, an imaginary line has seemingly been drawn: will you support Microsoft and use a Windows Mobile device or will you thumb your nose at your employer and buy an iPhone? If you want to support other companies, your employer won't pay. But if you do support your employer, your employer will return the favor.

It's an interesting move -- and one that the company probably won't admit to. But it makes sense on many levels.  Microsoft needs all the supporters it can get in the mobile space. If its employees are invested in the technology, they will be more willing to do what they can to either improve it (if they work on that team) or promote it. It gives Microsoft a built-in marketing and product development arm that it might not have had before.

That might be an intended consequence of Microsoft's decision to stop paying for competing plans or it might not. In either case, we shouldn't jump all over the company for doing something that, to be quite honest, makes some real sense.

And now, all Microsoft needs to do is totally revamp Windows Mobile and make it relevant. That shouldn't be too hard, right?  Ehem.