Windows Phone 7 Apps Controversy, Cloud Offerings Dominated Microsoft Week

Microsoft's week revolved around its large cloud contracts and updates to its Windows Phone 7 app-submission and payment schedules.

Microsoft's week was all about the cloud and Windows Phone 7.

On the Windows Phone 7 side of things, Microsoft announced this week that it would adjust its schedule of payouts to Windows Phone 7 developers, moving up its timetable from February to January. This could have been in response to rising developer complaints about payout timing for their apps.

Starting Dec. 9, Microsoft also started offering a "Report" link through Windows Phone 7's app-submission platform, App Hub, with current download and transaction reporting information for apps and games. The two types of reports include Download Reports, which offer a graphical view of daily and cumulative downloads, and Payout Reports, with payout data for all Marketplace applications.

"These reporting features include the ability for you to create custom views and apply filters," reads a Dec. 9 posting by Todd Brix on The Windows Phone Developer Blog, "providing the flexibility to see app performance data the way you want to help make app development and business decisions. Reports can be filtered by date, country and application."

After January 2011, Microsoft plans on processing developer payouts on a monthly basis, for both Windows Phone 6.x and Windows Phone 7 apps. The company has also tweaked certain elements of the app registration and submission process.

If Microsoft wants to build a robust app ecosystem to compete with similar offerings from Apple and Google, it needs to actively court third-party developers traditionally responsible for the bulk of application storefronts' offerings. In order to increase Windows Phone 7's appeal, Microsoft recently introduced a way to create apps using Visual Basic. On the consumer side of the equation, Microsoft hopes those apps, in conjunction with Windows Phone 7's unique user interface, will attract those users who would otherwise gravitate toward either the iPhone or a Google Android smartphone.

In the meantime, though, Microsoft also seems reluctant to share any sales numbers for Windows Phone 7 devices, which launched in the U.S. market in early November. During a Dec. 7 conversation with Walt Mossberg at the D: Dive Into Mobile conference in San Francisco, Joe Belfiore, Microsoft's corporate vice president and director of Windows Phone Program Management, declined to offer any hard data along those lines.

"We're not talking about numbers yet," he told Mossberg, according to a rough transcript posted on All Things Digital, which runs the conference. "It's just too soon to talk about numbers."

Meanwhile, Microsoft continued to amp its aggressiveness in the cloud context.

The company's "all in" cloud strategy involves convincing governments and industry that it can provide everything necessary for their cloud-computing needs: online applications and storage, redundancy, and security. Government contracts play a particularly large role in that strategy, and Microsoft has pursued them with a vengeance: In October, for example, New York City Mayor Michael Bloomberg and Microsoft CEO Steve Ballmer announced a partnership that would bring the BPOS platform to around 30,000 city employees.

But Microsoft also finds itself up against Google, which is pursuing many of the same contracts in its bid to expand revenue streams beyond search and advertising, and cloud-software companies like Salesforce.com.

On Dec. 8, Microsoft used its corporate Website to tout its cloud contract for the United States Department of Agriculture's Enterprise Messaging Service (EMS), which includes e-mail, Web conferencing, instant messaging and document collaboration features.

"Migrating an enterprise of USDA's size and complexity from multiple environments, across multiple agencies, requires not only a trusted enterprise-ready solution, but also a partner that is able to work with us and navigate everything from archiving to authentication to mobile phone support," Chris Smith, chief information officer at USDA, wrote in a Dec. 8 statement.

Under the terms of the USDA's contract with Dell for Microsoft Online Services, some 120,000 users across 21 e-mail systems will migrate to the consolidated cloud platform. The shift to the new system is scheduled to begin within the next four weeks.

Microsoft's announcement came days after Google announced a contract to provide Gmail and Google Apps to the General Services Administration, and the timing illustrates the increasingly tit-for-tat nature of the two companies' conflict over cloud contracts. In November, Google used the federal government, alleging that the Department of the Interior had unfairly restricted its bid to update its e-mail and messaging system. Microsoft's BPOS-Federal suite eventually won that contract, estimated at $59 million over a five-year cycle.

Microsoft this past week also took a swipe at Salesforce.com. In "An Open Letter to Salesforce.com Customers," timed for the start of Salesforce's annual Dreamforce conference, the company dangled a $200-per-user rebate for any organization that switches from Salesforce to Microsoft Dynamics CRM Online.

At Dreamforce, Salesforce unveiled products such as Database.com, its new stand-alone cloud database for IT pros creating applications. That heightens the cloud-software company's competition with Microsoft and its SQL Azure cloud-database service.

Throughout mid-2010, Microsoft and Salesforce filed a series of intellectual-property lawsuits against one another, a battle that eventually ended in August when Salesforce agreed to compensate Microsoft for its patents. But Salesforce.com CEO Marc Benioff nonetheless enjoys poking at his rival in public speeches.