Microsoft, AT&T Partnering Up

Microsoft Corp. and AT&T Wireless announced a strategic alliance Wednesday to begin offering new wireless services to business customers.

The partnership aims to simplify communications between employers and employees, the companies said in a joint news release.

In the past 18 months, Microsoft has forged partnerships with at least five major wireless carriers in the United States to carry a cell phone or wireless device that runs Microsoft operating software.

Under the agreement, both Redmond, Wash.-based companies will develop software and services that will let business users access their corporate e-mail, calendars, data and other business applications.

It will also incorporate existing AT&T Wireless services, including pinpointing the location of a wireless user.

Customer trials already have begun and the first set of services and devices using Microsoft Pocket PC Phone Edition software should be available commercially in the fourth quarter of the year, the announcement said.

The new PocketPC Phone Edition combines computing functions with phone capabilities in a handheld device.

"Today's announcement is further proof that wireless communication is rapidly becoming the lifeblood of our working lives," AT&T Wireless chairman John Zeglis said in a news release. "Together, AT&T Wireless and Microsoft can build on our core competencies to enhance the productivity of today's mobile work force and better serve our corporate customers."

The goal is "a simple, out-of-the-box mobile experience that can be easily installed, managed and maintained," Zeglis said.

The development follows months of collaboration between Microsoft and AT&T Wireless and is designed to capitalize on Microsoft's dominance in business desktop software, particularly its popular e-mail programs.

But Microsoft will face competition from the Symbian operating system that is used by several companies in Europe, including cell phone company Nokia.

In the United States, Microsoft will have the advantage of a dearth of smart phones.

Juha Christensen, corporate vice president for Microsoft's mobile devices group, said Microsoft is positioning itself as the wireless telecommunications industry shifts from customers talking on the phone to customers accessing data on the phone.

In the past several months, the company has announced deals with Cingular Wireless, Sprint PCS, Verizon Wireless and VoiceStream Wireless, which is part of Deutsche Telekom.

"The vast majority of what goes through carriers is really going to be wireless data," Christensen said. Traffic is going to be moving "from ears to eyes."

Carriers are growing increasingly receptive to Microsoft, he said, as the cash-strapped companies learn that building their own software services is proving to be very expensive.

"We'd like to see our software on as many handsets as possible," Christensen said.

Microsoft needs to form partnerships with as many carriers as possible, said Michael McGuire, an analyst with Gartner G2.

"If they're going after the wireless and enterprise space, it behooves them to work with AT&T Wireless," he said.