Wireless Move Could Fall Short

Microsoft, AT&T Wireless deal to suit small companies, may leave bigger enterprises wanting.

A new deal struck between Microsoft Corp. and AT&T Wireless last week could make it easier for companies to buy wireless equipment in the future. However, it is not likely to produce the enterprise application nirvana the two companies are promising, industry experts say.

The two Redmond, Wash., companies last week announced a plan to jointly develop and market software, Pocket PC devices, smart phones and laptops that provide remote users wireless access behind the firewall to e-mail and other enterprise applications. Services based on the new software will be available next quarter, officials said.

In addition to this agreement, AT&T Wireless intends to start selling next quarter a device based on Microsofts Pocket PC Phone Edition. It announced plans to follow that up next year with a device based on Microsofts Smartphone 2002 platform.

While observers said the partnership is promising for small businesses that need a one-stop shop for basic remote access to e-mail and calendar functions, enterprises that have more-complex needs for vertical applications will get less out of it.

"Its pretty easy to build out mobile extensions to e-mail, but where you really start to differentiate yourself as a mobile application developer is in more-complex applications like sales force automation and customer relationship management," said Joe Laszlo, an analyst with Jupiter Research, a division of Jupiter Media Metrix Inc., in New York. "Those are things that are outside of what Microsoft and AT&T Wireless are doing."

Potential customers agreed.

"If we are talking about base- line services such as e-mail, calendaring, basic info [and] corporate portal solutions, I would probably stick with the carrier," said Jorge Abellas-Martin, senior vice president at Arnold Worldwide, in Boston, and an eWeek Corporate Partner. "For more-complex applications like ... custom integration, consumer services, I would probably use a third party."

"Unless the alliance results in a product that meets a specific business need, it doesnt impress me that much," said John Schaaf, business analyst for Novartis Pharmaceuticals Corp., in East Hanover, N.J. Schaaf said Novartis plans to deploy later this year 1,000 Research In Motion Ltd. BlackBerry devices, which he called "proven technology."

Neither Microsoft nor AT&T Wireless has a great track record in wireless. Microsoft has had two false starts with wireless middleware—first in getting rid of its 50 percent share in third-party middleware company Wireless Knowledge Inc. and then in nixing its own Mobile Information Server middleware shortly after it was launched. AT&T Wireless, for its part, has bounced among several network technologies.

One area where the companies may offer innovative products is location-based technologies. Every wireless carrier is having trouble meeting a federal mandate to enable emergency operators to pinpoint the location of wireless phones within 100 yards. But in the meantime, Microsoft and AT&T Wireless plan to use slightly less accurate technology for other location services, officials said.

Still, even Microsoft officials said the alliance might need third-party help to serve the enterprise. "Expect to see a leading [systems integrator] as the chief implementation specialist," said Ed Suwanjindar, a product manager for the Mobility Group at Microsoft.