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Microsoft Gets the DTs

Microsoft Corp. announced one of its most wide-ranging mobile deals ever, at the start of the CeBIT trade fair in Hanover, Germany. The software giant has added Deutsche Telekom AG to its growing list of carrier partners.

DT, Europe’s largest telecom company, says it plans to develop an extensive range of corporate and consumer wireless access services based on Microsoft software. DT’s cellular arm, T-Mobile, has already announced plans to develop a Pocket PC wireless device. The parent company says there will be more.

The DT deal builds on the foundation that Microsoft started to erect at the 3GSM conference back in February, when the company announced that it was working with mm02 PLC, Orange SA, SingTel, Telefònica,Telstra Corp., TurkCell, and Vodafone Group PLC.

Microsoft is looking for a toehold in the higher end of the mobile phone market, the so-called “smartphone” segment, which is currently dominated by companies like Nokia Corp. and Ericsson AB. Another company that could lose out to Microsoft is Symbian Ltd. – Microsoft's major rival in the smartphone operating system market at the moment.

With the coming of third-generation wireless networks, network operators have become increasingly hung up on ways to make money from the wireless data services they will be able to offer on the new networks. This is especially true of European carriers that have spent billions on procuring the licenses that will enable them to offer such 3G services. It is widely accepted that one large market will be enterprise customers, looking for secure access to wireless email and corporate intranets along with other wireless applications.

Microsoft has a massive installed base of customers that use its Exchange email software, and it has recently started to offer wireless access to that data through its Mobile Information Server. This ready-made market, which will also likely spend money on the other services Microsoft and its carrier partners will develop, is what operators are looking to tap into through partnerships with Microsoft.

Deutsche Telekom said yesterday that it will use various elements of Microsoft’s .Net software to develop services that will allow wireless access to ERP, CRM, e-commerce, messaging and calendaring, and workflow applications.

The operator also announced two Microsoft-based services that will enable subscribers to roam and access information across its entire network and subsidiary networks, including Austria, the Czech Republic, the Netherlands, Poland, Russia, the U.K., and the U.S. Based on Microsoft Mobile Information Server Enterprise and Carrier editions, the new services will provide wireless access to corporate intranets and Microsoft Exchange Server data, including email, contacts, and calendars, as well as color HTML browsing and access to VPNs on laptops, PDAs, smartphones, and WAP-enabled phones, among other devices.

Carrier partnerships are also crucially important to Microsoft if the company is to succeed in the mobile market. Through operator deals, the company gets its MSN brand right on the handset through tie-ins with carriers. In addition, operators like Deutsche Telekom can bring some of the economics of selling mobile phones to selling Pocket PC devices. They can sell the gadgets with a service plan and possibly transfer some of the cost of the device onto the customer’s monthly bill. This gives the carriers an advantage over Microsoft’s existing PC-oriented partners like Compaq Computer Corp. when it comes to wireless.

In related news at CeBIT, U.K. operator mm02 (formerly BT Cellnet) announced that it would have its first smartphone based on Microsoft’s Pocket PC 2002 Phone Edition (the software formerly know as Stinger) out in Europe in May.

— Dan Jones, Senior Editor, Unstrung
http://www.unstrung.com
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