Verizon, Microsoft to Offer Mobile Data Services

Verizon Wireless and Microsoft have formed a partnership to co-develop and market wireless data services aimed at consumers through the Microsoft Network and at enterprises through back-end systems. Enterprise offerings will use the .Net Enterprise Server as the gateway for mobile business applications, such as providing Outlook e-mail service to mobile phones and Pocket PCs.

Steve Ballmer, chief executive officer of Microsoft, said in a statement that the deal with Verizon Wireless "ushers in the next generation of wireless data services for consumers and enterprise customers." Microsoft and Bedminster N.J.-based Verizon Wireless plan to launch the new "VZW with MSN" service Friday with a multimillion-dollar advertising blitz and a direct mail campaign to more than 100 million consumers.

Verizon Wireless is the nation's largest cellular carrier, with 30 million subscribers out of a total U.S. base of 136.4 million.

The new service will allow Verizon Wireless subscribers to access popular MSN services from any Web-enabled digital phone, including the MSN Messenger instant messaging service, Hotmail, .Net Alerts, and MSN Information Services. The two companies said they also plan to co-develop new mobile applications, including location-based services for Web-enabled phones, smart phones, and Pocket PCs.

Microsoft Takes on Another Sector

Tim Scannell, an analyst at Shoreline Research in Quincy, Massachusetts, said Microsoft's partnership with Verizon is just one part of a long-range plan by the software giant to extend its market dominance to yet another area.

"They have always wanted to own the mobile space," said Scannell, who called the agreement with Verizon "a significant positioning move in the United States. They know in a year or two, a lot of applications are going to end up on a mobile pipeline to consumers and business users."

But, Scannell said, he doubts that the Verizon Wireless/MSN deal will have much impact on other carriers. "No one is going to switch carriers because of Microsoft and applications that are not yet available," he said.

Ken Dulaney, an analyst at Gartner in Stamford, Connecticut, characterized the agreement as akin to throwing something "at a wall and see what sticks." He said he doubts that the agreement will serve as an inducement to enterprise customers.

"Most organizations do not look to their [cellular] carrier for application advice," Dulaney said. "They see them as a pipe and that is it, and the carriers have not shown they can provide much more."