Microsoft Offers European Wireless Carriers One-Stop Solution Center for Mobile Services

STOCKHOLM, Sweden, July 25, 2000 — When British Telecom (BT) came to Microsoft last year to create a new service for mobile phones and Pocket PCs, the software company decided to do something a little different. It created a dedicated team to help BT study and develop the service and cater to its customers’ needs.

The approach was so successful with BT and other wireless carriers that Microsoft decided to keep doing the same thing, only on a larger scale.

The result is Microsoft’s new Mobility Solutions Center in Stockholm, Sweden.

The center, which opened in June, offers carriers what many have told Microsoft they want: a one-stop location to develop a broad variety of customized mobile services using Microsoft’s wireless or wireless-capable technologies. The company is so dedicated to the concept that it plans to open three other centers around the globe in the coming months to better serve the booming worldwide market for mobile data services.

“In order to serve the burgeoning wireless marketplace, we need a specialized group of people in several locations around the globe who can respond in a very cohesive fashion to the mobile sales, marketing and consulting needs of our partners — whether they be large wireless carriers, system integrators or mobile device manufacturers,”
said Paul Gross, Sr., vice president of Microsoft’s Collaboration and Mobility Group.
“The solution center puts all of these services for all of our partners under one roof.”

Microsoft chose Sweden, the heart of the so-called Nordic
“Wireless Valley,”
for its first Mobility Solutions Center (MSC) to help further increase use of its wireless services throughout Europe, the world’s most established wireless market. The center, which also serves the Middle East and Africa, allows Microsoft to use staff and other resources it has acquired through the purchase of three leading wireless technology companies: Sendit, a Stockholm-based developer of mobile Internet technologies; STNC, a Cambridge, England, developer of microbrowser technology; and Entropic Technologies, a British developer of software for developing voice portals.

Creating customized services faster

Europolitan, a Swedish network provider with nearly a million subscribers, is among the carriers that plan to use the new center. Its needs are typical.

To succeed, mobile carriers — called “operators” in Europe — need to be able to customize and create services more rapidly than in the past, said Joakim Karlsson, Europolitan’s product manager for messaging services.

“We are living in a very fast market,”
he said.
“We don’t have time for the long development times of years past. To compete, we need shorter times. Also, we have to offer very tailored solutions that best meet the needs of our customers.”

The new center is designed to meet these dual demands, Gross said. Housed in a two-level building in Stockholm’s harbor area, the center has no hard-wired phones and soon will offer only wireless computer terminals. None of the employees work at assigned desks. They use cupboards on wheels to move their personal items among permanent workstations. This allows them the flexibility to more easily bring together employees who have the skills needed to fulfill a carrier’s request, then re-form in another group when the next carrier arrives, explained Richard Lindh, the center’s marketing director.

“We are out there to create revenue-generating solutions for carriers, ones that are convenient yet rich and exciting for users,”
Lindh said.
“A lot of other companies’ solution centers are out there to promote technology; they are more like showrooms. We actually have software developers here who do hardcore development and get these solutions onto platforms.”

The center, which offers 200 mobile software developers, belongs to a product group that combines the usually separate sales and development duties, allowing customer representatives to offer direct feedback to the makers of the products. And while the center operates independently, it uses Microsoft’s vast network of resources and software expertise, Lindh said.

The center’s staff works in partnership with carriers to keep them up-to-date on Microsoft’s growing portfolio of wireless products. If necessary, they also conduct extensive trials to help determine the services a carrier’s customers want. Then, they create and customize these services. Through customization, Lindh said, carriers gain an advantage over their competition.

Gone are the days when European wireless carriers had to make do with prepackaged software solutions or wait as much as 18 months for the next generation of software to address a current demand, Lindh said. The center can add new features and deploy test models to a platform within three or four months, creating a
“continuous development loop”
among the company, carriers and customers.

Making customers partners

The center is also one of Microsoft’s best examples of offering software as a service. Carriers don’t write a check for a new wireless service, add it to their system and go away. They pay Microsoft based on the success of the service, as determined by preset goals of customer use.

“We talk about betting the company on lots of things,”
Lindh added.
“Here at the center, we are betting the company on every service we develop with our carrier partners. We share the risk. We share the reward.”

The center’s new approach reassures Europolitan’s Karlsson.

“Many times, the services mobile operators require are very complicated,”
he said.
“A supplier such as Microsoft may need to put in more effort than even they expect to make these services succeed. With this business model, Microsoft has more incentive to make services succeed as best possible. That sounds good.”

Microsoft predicts the center’s approach will help operators achieve the business goals most share: namely, increased Average Revenue Per User (ARPU) and reduced costs and
or turnover, in users.

“If you can develop mobile applications that work well for customers, they are more likely to use those applications more frequently and less likely to move to another operator,”
said Dilip Mistry, the center’s marketing manager.

Microsoft also will use the center to build stronger bonds with private software developers throughout Europe by offering education, training and partnership programs, Mistry said.

Microsoft hopes these developers will use this knowledge, Mistry said, to do for the company’s wireless services what they did for Windows and its other software: create a richer, more diverse selection of applications and services that lure more and more users.

Putting resources and commitment behind mobile

The new center is a clear indication to BT, one of the world’s largest wireless carriers, how serious Microsoft is about wireless.

“What it says is, Microsoft is putting the resources and commitment behind mobile,”
said Paul Rodgers, project director for BT Wireless in London, England.

BT has been happy with the wireless services it has received in the past from Microsoft, he said, but it’s looking to take advantage of those offered by the center. The biggest benefit of the center, Rodgers said, isn’t its close proximity, but rather the number of dedicated staff and the volume of other resources it offers.

“It’s an exciting proposition, an opportunity for us to work with Microsoft to develop some interesting new applications and put the resources of Microsoft to work for our mutual benefit,”
Rodgers said.

So what did the Microsoft team that inspired the creation of the service centers do for BT? It worked with the provider for a year to determine the wireless services its customers most wanted when accessing Microsoft Exchange from mobile handsets. The trials included 1,000 people throughout England. The results: Trial users most often accessed personal contact information, calendars and critical email. BT also learned about the limitations of devices with small screens and the benefits of those that are easily accessible. It used the results to help create its latest mobile service, Pocket Net.

“This is the same way we will work with other wireless carriers,”
Mistry said.
“We will put in place trials to better ensure the commercial viability of a service before it hits the market.”

Services include newest version of ICSA platform

The center will draw from a wide variety of Microsoft products to create its services, including new, soon-to-be-released corporate and consumer data-access technology built on Windows 2000.

“Microsoft is the only company that creates software for the full range of mobile devices: Pocket PC, feature phones, smart phones and laptop computers,”
Gross said.

We are the only ones who can provide a full platform, with Windows topped by SQL or Exchange servers. And we are the only company that also provides a set of services, whether that’s MSN or the emerging bCentral small-business content.

Microsoft’s products span the full range of carrier needs for wireless solutions,

Gross added.

Last month’s release of Internet Cellular Smart Access (ICSA) version 3.5 provides carriers with another important tool. The newest version of Microsoft’s platform for delivering mobile Internet services offers Wireless Application Protocal (WAP), which optimizes Web content on the screens of handheld wireless devices. Without WAP, users of handheld mobile devices receive a scaled-down version of email and other content.

Centers planned for Asia, the Americas

The European center won’t be an only child. In coming months, Microsoft plans to open an MSC in the United States to serve North, South and Central America. Two additional centers are planned for Asia, to serve the booming Far East market.

As in Europe, mobile use in Asia is well established. Some services, including Internet access via mobile phones, are growing faster there than in the United States. The reason: a common digital standard called Global System for Mobile Communications, adopted in Europe and Asia in the early 1990s. GSM allows mobile users to call throughout and between 120 countries with no roaming charges or other inconveniences.

In comparison, the wireless market in the United States is split by multiple standards. Despite this, experts predict mobile use will soar in the United States and the rest of the world in coming years.

Mobile e-business — purchases over mobile devices — is predicted to more than double in North and South America alone from $160 million last year to $340 million in three years. The number of mobile users with devices that can receive voice and data information is expected to grow from roughly 25 million worldwide today to 120 million by 2004.

Experts predict wireless devices will soon become as ubiquitous as clocks on many appliances, thus allowing users to remotely turn on the oven or air conditioner.

The integration of mobile devices with
desktop and other computers soon is expected to allow users to receive information when and how they need it. If users receive an urgent email while traveling, their system will check their calendar and forward the message to their Pocket PC. If the message is less important, the message will be held until they return.

Gross is confident many of these predictions will come true and that the MSCs will play a role in creating a wireless world.

“The key to everything is to create a critical mass of customers for which one can provide critical services,”
Gross said.
“For that you need rich, innovative, mobile Internet services. That’s what the MSCs will help mobile providers create.”

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