Microsoft Week Involved Phone 7, Office Web Apps, Cloud

Microsoft's key news this week came out of its TechEd Conference in New Orleans, where the company pushed the gathered developers and enterprise customers on the business-centric virtues of its upcoming Windows Phone 7. In addition to promoting that upcoming smartphone platform, Microsoft also indicated that its Yahoo search-and-advertising agreement was on track, and released its Office Web Apps, it own cloud-based productivity offering, to users in select countries. While Microsoft currently dominates the traditional productivity software space, it faces a potential battle against browser-based Google Apps.

Microsoft used its TechEd Conference in New Orleans this week to push a vision of the company as aggressive in the smartphone and cloud spaces, encouraging the gathered developers and enterprise customers to think about creating business-centric applications for its upcoming Windows Phone 7 platform.

Windows Phone 7 is intended as a total revamp of Microsoft's mobile franchise, with the first devices running the operating system expected to release near the end of 2010. At TechEd, the company hosted a number of deep-dive sessions, as well as product demonstrations, designed to highlight its viability as a business platform. In contrast to rivals such as the Apple iPhone, whose user interface centers on pages of mobile applications, Windows Phone 7 aggregates mobile applications and Web content into subject-specific "Hubs."

"More than 90 [percent] of our target customers for Windows Phone use their smartphone for business purposes," Paul Bryan, a senior director of Windows Phone at Microsoft, wrote in a June 7 posting on the Windows Phone Blog, timed to the first day of TechEd, "and 61 percent use their phones equally or more for business than personal use. This is why we designed Windows Phone 7 to combine a smart new user interface with familiar tools such as PowerPoint, OneNote, Word, Excel and SharePoint into a single integrated experience via the Office hub."

Microsoft CEO Steve Ballmer and other Microsoft executives have taken pains over the past few months to assure business users that Windows Mobile will continue to be supported after Windows Phone 7's release, despite some analysts viewing the lack of an upgrade path as a potential stumbling block for many enterprises.

"We understand that while Windows Phone 7 will bring a new level of business productivity to a broader range of customers than we've ever reached before," Bryan noted in his blog post, "for more highly managed corporate scenarios or where customers have made significant investments in applications on Windows Mobile 6.x, Windows Mobile 6.5 may remain the best choice in the near-term."

Microsoft also released details of its new Windows Phone Marketplace. As part of an annual $99 registration fee, third-party developers will be able to submit five free apps (rising to $19.99 each after that) along with an unlimited number of paid apps, will get a revenue share of 70/30, and have the ability to publish to all available Marketplace markets.

If Windows Phone 7 proves popular, however, it could create a situation for Microsoft similar to that confronting Apple, which has been accused of inconsistently policing its own App Store. While Microsoft's guidelines for apps are stringent, banning libelous or explicit content, it will inevitably find itself judging submissions that fall into more of a gray area; how it handles those cases could help determine whether Windows Phone 7 becomes a favored platform for developers.

Speaking of the cloud, Microsoft announced June 7 the availability of Office Web Apps on SkyDrive for users in the United States, the United Kingdom, Canada and Ireland. The platform allows users to view and edit Word, PowerPoint, Excel and OneNote documents online, via, although some advanced features have been reserved for the desktop-based version of Office 2010.

Besides viewing and editing, the Web-based versions of those applications allow users to collaborate on Excel and OneNote files in real time, and view Word and PowerPoint documents on smartphones. Two other features include version history, which allows the user to cycle through older edits of documents, and enhanced search, a more comprehensive drill-down into currently stored files.

Office Web Apps represents Microsoft's attempt to counterprogram Google Apps and other cloud-based productivity programs, which display the potential for robust growth despite their occupying a tiny percentage of the productivity-software market. According to Gartner, Microsoft held 94.23 percent of the productivity-software market in 2009, as measured by revenue, while Google held .09 percent. Nonetheless, the company could also face something of an uphill battle in persuading users to upgrade to Office 2010 from previous versions, none of which exhibited issues or problems that would impel a mass migration.

Microsoft made Office 2010 and SharePoint 2010 available to business customers starting May 12, with the consumer rollout scheduled for this coming week.

With regard to the cloud, other Microsoft announcements indicated that the company's upcoming deal with Yahoo-which will see Bing power the Web portal's back-end search-is on track to have most of its major components in place by the end of 2010.

"We're hopeful to go prior to the holidays. We've publicly announced that we're going to shoot for that," Bill Koefoed, Microsoft's general manager of investor relations,reportedly told the audience during a June 9 appearance at the RBC Capital Markets' Technology, Media and Communications Conference. But that also came with a note of caution: "We're clearly going to make sure we optimize for customer experience, and so there is a potential that it could flip 'til after the holidays."

Koefoed's statement follows previous announcements by both Microsoft and Yahoo, which likewise cited that "end of 2010" timeframe for the 10-year agreement, which will see Yahoo's U.S. advertisers and publishers ported onto Microsoft's AdCenter platform; those earlier missives also sounded a similar note of caution about the possibility of delays. In a May 6 posting on its Search Marketing Blog, Yahoo indicated that the transition to AdCenter could be delayed into 2011 if unexpected problems crop up.

But even with their forces combined, both Yahoo and Microsoft face a tough battle against Google, which continues to hold a dominant share of the search-engine market. According to analysis firm comScore, Google held 64.4 percent of the search-engine market in April, while Yahoo occupied 17.7 percent and Bing reached 11.8 percent.