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Microsoft-Qualcomm targets corporate
enterprise market
By Antony Bruno
Qualcomm Inc. and Microsoft Corp. plan to announce this week they are
creating a new wireless communications company to focus on the
integration of wireless data, information technology and computers.
According to information leaked to the press last week, the venture aims
to extend Microsoft's Windows CE operating system to Code Division
Multiple Access phones created by Qualcomm. But many expect an
announcement that will address issues far beyond mere handsets.
Speculation is the two will team with other strategic partners to deliver a
complete, end-to-end corporate enterprise solution of which wireless will
be only a portion.
‘‘Windows CE in the handset is not where the money is. The big money is
in the back office,'' said Richard Luhr, an analyst at Herschel Shosteck
Associates Ltd., which soon will release a report titled, ‘‘The Strategic
Implications of Computing and the Internet on the Wireless Industry.''
Luhr said Microsoft wants its software not only in the handsets but the
corporate servers as well, and that Microsoft is teaming with a wireless
company to make its back-office software more attractive. For its part,
Qualcomm is looking to include its CDMA handsets in a much larger,
in-demand solution to make its products more attractive.
‘‘Qualcomm sees it as a way to push CDMA forward. Microsoft sees it
as a way to get its foot in the door of the wireless data industry that
doesn't exist yet,'' Luhr said.
By joining forces, the companies also can better battle a shared rival, the
Symbian venture, which includes Motorola Inc., L.M. Ericsson and Nokia
Corp. Symbian is backing the EPOC operating system from Psion plc.
Through the Symbian venture, Psion's EPOC operating system now has a
head start over Microsoft's Windows CE in the wireless arena, and even
Bill Gates has admitted the company poses a significant challenge.
‘‘Yes, this is a reaction to Symbian. It's about who can get their hooks
into the corporate enterprise first,'' Luhr said. ‘‘This is really big in that it
shows Microsoft is not going to give up. They're going to go after the
market with anybody who's in there.''
However, there are challenges. Many say Windows CE is not optimized
for handset use.
‘‘I think Windows CE has a long way to go to fit into the size, memory
and processing constraints of these devices,'' said Konstantin Zsigo,
president of Zsigo Wireless Data Consultants Inc.
If any other smaller company suggested using a system like Windows CE
on wireless phones, they'd be laughed at, Zsigo said. ‘‘But this is
Microsoft.''
Either Microsoft could evolve Windows CE to fit Qualcomm's handsets,
or Qualcomm could create smarter handsets to better handle Windows
CE. Either way, Microsoft's muscle could add firepower to the emerging
wireless data market.
‘‘I would be very concerned when Microsoft enters a market like this,''
Zsigo said. ‘‘All people huddled around independent, non-Microsoft
groups are in trouble. Microsoft has the power to freeze a market for a
year without delivering anything, that's how powerful they are. People will
stop everything for 12 months just to see what happens.''
But to the wireless data industry, the announcement Microsoft is planning
such a potentially large venture is a ray of light illuminating a field longing to
emerge from the shadows of obscurity. Already, magazines representing
the nation's larger business journals have contacted wireless data analysts
accustomed to speaking only with wireless press.
Zsigo feels the entrance of heavy hitters like Microsoft and Qualcomm will
get the attention of application developers, who have paid little attention to
the industry because it lacked mass-market interest.
‘‘Microsoft brings developers to the table,'' Zsigo said. And Qualcomm
‘‘has a mainstream distribution of product.'' Together, they could produce
a popular wireless data system.
‘‘It wouldn't be considered a speciality product. Then you have an
immediate route to the mass market.''
The wireless data industry for years has been trying to make a business of
bringing corporate intranet data to mobile devices. To date, the data
networks, technology and devices to do so have been fairly specialized,
expensive and limited to vertical markets.
The stumbling blocks include the matter of adding a wireless public
network to an existing private system, the security issues of transmitting
sensitive data over public wireless data networks and the limited handset
availability and coverage of those wireless data networks.
Microsoft wants to deliver a solution using its software in the back-office
servers as well as any terminal connected to it, including wireless phones.
That would go a long way in meeting the first stumbling block
mentioned—compatibility.
To address the security issue, reports last week said the new company
will create a call center that will handle those sensitive links between
corporate environments and public networks in a protected fashion.
As for availability and coverage, CDMA handsets and networks are much
more prevalent than even the leading equivalent in the wireless data
industry today. While Cellular Digital Packet Data networks have
expanded in the last year, the technology still lacks footprint in many cities.
‘‘[CDMA] has a much larger footprint than CDPD. It solves the problems
of reliability and availability,'' said Zsigo.
Why Microsoft chose to go with CDMA technology likely has to do with
the fact L.M. Ericsson, the leading Global System for Mobile
communications provider, has backed Symbian. While Qualcomm likely
will tout its partnership with Microsoft as an endorsement of CDMA,
analysts believe Microsoft will not stop with one technology standard.
‘‘We don't see this as a big win for Qualcomm,'' Luhr said. ‘‘This won't
be the only venture Microsoft gets involved in; not by a long shot.''
He predicted the software giant soon will look to other technologies,
including GSM.
‘‘CDMA is a tiny piece of the market ... So Microsoft is going to play
with it for a while, but they're going to get hungry for more,'' Luhr said,
defining the venture as a test. ‘‘This is just the first salvo.''
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