Microsoft has had decidedly mixed results in its many attempts to become a player in the rapidly evolving communications market.
The company has used its vast cash stores to gain access to the telecommunications world, spreading large investments across cable ventures like AT&T and Comcast, digital subscriber line (DSL) upstarts like Rhythms NetConnections and NorthPoint Communications, and high-speed long-distance carriers like Qwest Communications International.
Today, it announced a deal with wireless giant Ericsson to develop technologies for mobile communications devices.
The move falls in line with Microsoft's overall effort to expand as the high-tech industry turns from the personal computer to a variety of Net-based devices for communications. But the Redmond, Wash.-based software behemoth hasn't been the most successful in creating and sustaining alliances.
"Microsoft is a necessary evil," said Maribel Lopez, an industry analyst
with Forrester Research.
"In many cases, it's not a true partnership. Each side just wants to know
what the other side is doing."
Such deals may be tailored more to garner favor on Wall Street than to
foster technology innovation, according to some. "Partnering with Microsoft
is good for several points on your stock," said Craig Johnson, principal
with market watcher Pita Group.
"Reality has nothing to do with anything."
The Ericsson deal bears a striking resemblance to an alliance
launched just over a year ago between Microsoft and Qualcomm, a joint venture called Wireless Knowledge.
The venture has yet to move beyond the trial phase with any of its major
telecommunications carrier customers. Additionally, the company has already
changed chief executives, installing a Redmond veteran in place of a former
And Microsoft executives today did little to dispel the notion that Wireless
Knowledge is not exactly a vital cog in the software firm's ever-expanding
"Mobile Internet access and services are crucial for realizing Microsoft's
vision of empowering knowledge workers and consumers through software any
time, anywhere and on any device," Microsoft president Steve Ballmer said in
a statement. "As the world leader in mobility and mobile communications,
Ericsson is an ideal partner to help deliver this vision."
Wireless Knowledge executives could not immediately be reached for comment.
In other areas of the networking industry, Microsoft has also fallen short.
An ambitious alliance with Cisco
Systems announced in 1997 centered around the delivery of an operating
system now called Windows 2000 that has run into one huge problem: Microsoft
hasn't delivered the software.
That software was going to provide the basis for a series of Cisco products
that tied into Windows 2000 technology, like the system's directory service.
Cisco executives admitted to the misstep at the company's recent analyst
conference. "That strategy cost us two years," said Don Listwin, executive
vice president at Cisco.
Microsoft does not have a cohesive networking strategy, according to
Virginia Brooks, vice president of networking and communications for
industry consultants the Aberdeen
Group. "What Microsoft has tried to do is partner with winners to help
drive their own technology."
"Cisco was an active proponent of Microsoft's directory, and that failed to
materialize in the time frame Cisco counted on," she added. "It's one of
those public disappointments where [Cisco] had to face up and say
they bet on the wrong horse."
Microsoft recently partnered with Cisco competitor Nortel Networks to make
its software more voice-friendly--a deal that has yet to bear significant
fruit, though it remains in its early stages.
Despite the examples, there have been bright spots in networking for
Redmond. An ongoing partnership with 3Com has resulted in the delivery of a popular set of home
networking technology. The two companies are also working on adding
networking capabilities to Microsoft's Windows NT operating system, to be
named Windows 2000 in a forthcoming version.
3Com also has the largest footprint with consumers among network equipment
providers, possibility facilitating more cooperation. "We're trying to make
everything simpler," said Jeff Graham, 3Com's senior vice president for its
personal connectivity business unit, in a recent interview.
News.com's John Borland contributed to this report.