Executives said today the new venture, intended to develop mobile Internet access services, is "complementary" to Wireless Knowledge's deal and will only help generate demand for the venture's remote access service for businesses.
Wireless Knowledge, a venture between Microsoft and wireless firm Qualcomm, is one of several companies aggressively targeting the wireless data market by offering services for business users on the go. Many analysts believe the mobile data market will explode in the United States in the next few years as technology improves and the cost of mobile phones falls.
Wireless Knowledge offers mobile access to email, but does not yet provide wireless Net access or other e-commerce functions. Wireless Knowledge since its inception has been slow to get its services off the ground, and recently named a new chief executive.
Although some could read Microsoft's new deal as a shot at Wireless Knowledge, executives see the alliance as helping their cause.
"We see [the Microsoft-Ericsson deal] as very complementary to us," said Jinny Beneke, vice president of marketing for Wireless Knowledge. "It's just one more force that will drive the adoption of wireless data."
Analysts hailed the Microsoft-Ericsson deal as a clear signal of the software giant's commitment to the wireless industry, but pointed out that a recognization of its plans to work closely with Wireless Knowledge were noticeably absent from the mid-week fanfare.
"This announcement is the most significant manifestation to date of Microsoft's strategy for the mobile phone market. Interestingly, it includes no references to Microsoft's joint venture, Wireless Knowledge, established last year with partner Qualcomm," said market watcher Zona Research in a report this week.
One explanation could stem from the fact that Wireless Knowledge's service works primarily with corporate networks powered by Microsoft software including the BackOffice family of products, while Microsoft's new Ericsson venture is intended to be more flexible, Zona wrote.
Microsoft often invests in or partners with competing technologies, waiting for the market to shake out before striking with a decisive strategy of its own. However, many of Microsoft's forays into communications have been met with mixed results.
Wireless Knowledge executives said ties between the Ericsson alliance and their own are obvious. Ericsson makes both mobile handsets and back-end wireless equipment, but Wireless Knowledge provides the optimization services that tie that hardware together.
Wireless Knowledge works with wireless carriers to make sure their networks can support Revolv, a service that provides mobile remote access to corporate applications such as email, shared calendar and contact information, and other Microsoft Exchange server-based applications.
"We provide the services, applications, integration and optimization that sits between the infrastructure and the handsets," Beneke said. "We see the Ericsson-Microsoft play as focusing on the two end-points that will drive the need for services in the middle."
Indeed, the Ericsson alliance gives Microsoft a ready-made customer for its microbrowser software, which allows mobile handsets to carry Web sites and other Internet content. Qualcomm, in contrast, has announced its intention to sell its handset production business by the end of the year.
In an interesting twist, newly installed Wireless Knowledge chief executive Eric Schultz, formerly Microsoft's director of wireless strategy, was instrumental in forming the Ericsson-Microsoft partnership.
"Obviously he didn't see it as a big threat," Beneke said. "It just fills out the whole spectrum of wireless options for Microsoft and is great news for the wireless data industry. The more it raises awareness of wireless data the more it drives the need and demand for our services."