Mobile World Congress Smartens Up

BARCELONA, Spain — Feb. 22, 2011 — Take the good and the great of the worldwide mobile industry — 50,000 examples of them, to be exact — and throw them together for a week in Barcelona, and you’re sure to see and hear enough to give an indication of how the mobile industry is faring and where it’s heading. There was a tangible buzz at the show this year and a sense that confidence in the industry has returned. People are excited again, and that makes the show a good place to be.

Going into Mobile World Congress, the hot speculation was on new devices (smartphones, gaming phones, slates), network evolution and consumer application ecosystems. The show didn’t disappoint, but the biggest breaking news of MWC was on Friday with Nokia announcing that it would base its smartphone strategy on Microsoft’s Windows Phone platform and the start of a deep partnership between the two companies. As one analyst said to me, “The world’s largest handset manufacturer, the world’s largest software company — this should have a great impact on the industry and Mobile Operators will love it.” Obviously this was the starting point for most of our conversations at the show and gave us the opportunity to underscore just how committed Microsoft is to this industry. Having unveiled Windows Phone 7 for the first time at the show in 2010, it felt like we’d really come a long way in just 12 months. To hear more on our momentum for Windows Phone 7 and the specific announcements made at Mobile World Congress, see Andy Lees’ blog.

Microsoft news spanned our entire business from handsets and services to customer care and billing — including a number of industry ISVs that have selected Microsoft Dynamics CRM to expand their own billing solutions, such as Ericsson and MetraTech; customer wins from the partnerships we announced at Mobile World Congress 2010 with Redknee and Convergys; and Tech Mahindra building telco business intelligence solutions based on Microsoft’s BI platform.

A couple of stats jumped out for me at Mobile World Congress this year. More smartphones than PCs were sold in the last quarter of 2010 and by 2015 eight in 10 phones will be smartphones. Why those stats and what do they mean? Smartphones are becoming the de facto standard of phone and there is explosive growth, which in turn represents a massive opportunity for the whole mobile ecosystem of handset manufacturers, operators and of course software developers like Microsoft, not to mention thousands of application developers out there.

The GSMA has been heavily promoting its Wholesale Applications Community (WAC) initiative and has some good traction with service providers, such as Vodafone, AT&T, MTS, China Mobile, Telefonica and more, to open up cross-platform app development. What was missing from much of the talk is the business app: what are we delivering to the enterprise and small-business user? How can service providers create better, bigger margins from business cloud services? Productivity applications supported by a partner-hosted or syndicated business model are a huge growth area. In many respects the opportunity from business services is far greater than that of consumer apps, especially for service providers, who have a direct relationship with over 65 percent of the world’s businesses.

The cloud was firmly in the spotlight at the show. Our CTO of Communications Sector, Richard Ang, presented to a packed track session during a panel discussing “Consumers in the Cloud” and the challenges and opportunities for service providers. One of the conclusions was that investment in new networks — LTE, HSPA+, 4G — will be key to opening up more mobile innovation, encompassing new cloud services. But if history teaches us anything, and I’m talking about off-the-chart bidding for 3G licenses here, it’s that service providers will not invest in these new networks without a clearly defined business model that promises a fast return on investment. Once bitten, twice shy. Microsoft is working closely with our service provider partners to define a business model ensuring profitable returns.

The cloud is where it all comes together. It’s the piece of the puzzle that can make network investment pay off. Service providers can deliver and monetize new consumer and business services; they can differentiate their services, broaden portfolios to go across the many screens of PC, phone and TV, and increase stickiness with customers. In short, they become smarter operators for a smartphone generation.

The Microsoft Communications Sector strategy for business and consumer services in the cloud is something that we’ll be delving into more deeply in the coming months. For now, take a look at the Communications Sector news from the show, and definitely catch Microsoft CEO Steve Ballmer’s keynote address if you haven’t already.

By Austen Mulinder, corporate vice president, Worldwide Communications Sector, Microsoft