Microsoft and Nokia form global alliance

Microsoft business division president, Stephen Elop, and Nokia’s executive vice president for devices, Kai Oistamo, have announced an agreement outlining a shared vision for the future of mobile productivity. This is the first time that either company has embarked on an alliance of this scope and nature.

Under the terms of the agreement, the two companies will begin collaborating immediately on the design, development and marketing of productivity solutions for the mobile professional, bringing Microsoft Office Mobile and Microsoft business communications, collaboration and device management software to Nokia’s Symbian devices. These solutions will be available for a broad range of Nokia smartphones starting with the company’s business-optimised range, Nokia Eseries. The two companies will also market these solutions to businesses, carriers and individuals.

Both Microsoft and Nokia possess a combination of enterprise experience and consumer understanding and, in addition to the collaboration on existing software and services, will use these assets to jointly design a range of new user experiences for future Nokia devices. These experiences will be identified together, and will be created by dedicated teams inside both companies to better meet the growing needs of the mobile professional.

“With more than 200 million smartphone customers globally, Nokia is the world’s largest smartphone manufacturer and a natural partner for us,” said Elop. “This announcement will enable us to expand Microsoft Office Mobile to Nokia smartphone owners worldwide and allow them to collaborate on Office documents from anywhere, as part of our strategy to provide the best productivity experience across the PC, phone and browser.”

Oistamo added: “If you are going to provide a seamless and integrated productivity experience on a mobile device, Microsoft is an ideal partner. Together with Microsoft, we will develop new and innovative user experiences for employees of small and large businesses alike, ensuring Nokia’s smartphones are an integral part of the office and home-office environment, and addressing the significant opportunity in mobile enterprise productivity.”

This announcement builds on the existing work Nokia is doing by optimizing access to email and other personal information with Exchange ActiveSync. Next year, Nokia intends to start shipping Microsoft Office Communicator Mobile on its smartphones, followed by other Office applications and related software and services in the future. These will include: The ability to view, edit, create and share Office documents on more devices in more places with mobile-optimised versions of Microsoft Word, Microsoft PowerPoint, Microsoft Excel and Microsoft OneNote; Enterprise instant messaging and presence, and optimised conferencing and collaboration experience with Microsoft Office Communicator Mobile; Mobile access to intranet and extranet portals built on Microsoft SharePoint Server; Enterprise device management with Microsoft System Center.

Commented Stephen Drake, VP of mobility and telecom at IDC: “The scope of the alliance between Microsoft and Nokia, and potential value for the enterprise and individual is significant. By bringing Microsoft’s productivity solutions to Nokia’s large customer base, the two companies should be better able to serve the needs of the growing mobile worker population, which IDC estimates to reach 1 billion worldwide in 2011.”

While Gartner’s Nick Jones stated: “First this is great news for enterprises. Clients with Nokia devices and Microsoft back ends will have more choice. This is also good for the Microsoft divisions responsible for Office, Exchange, Sharepoint, OCS and SystemCentre. They will have more potential users and be able to sell more software. It’s also good news for those enterprises who were getting worried about the future of Windows Mobile, now they have an alternative. Look out for a note from my colleague Monica Basso which will analyse the enterprise implications in detail.

“This is good news too for Nokia; it will make E-series devices more attractive to those enterprises who use Microsoft technology. E-series has done well, but it has the potential to do better, this may help it compete with RIM for example.

“This is also good for Microsoft on a deeper level, because there’s another game being played here. Over the next couple of years Microsoft will face greater competition in mobile email, unified communications and collaboration from a wide range of organisations such as Cisco, Google and RIM. Being available on Symbian – the dominant smartphone platform – will help Microsoft fight these competitors,” said Jones.

On who won’t be happy, Jones said this is bad news for HTC, which has been a big supporter of Windows Mobile. “I bet the Windows Mobile team aren’t ecstatic either,” he commented. “Despite loud protestations that Microsoft is deeply committed to WinMo they wouldn’t have needed this alliance with Nokia if WinMo were the leading smartphone operating system. But it’s only in fourth place, which isn’t good enough given all those years of investment. I see this as a tacit admission from Microsoft that WinMo hasn’t made the grade. I’ve noted before in my blog that I am becoming more concerned about its future and I worry that WM7 could even be the last throw of the dice. Imagine you’re Steve Balmer, and in two years time WinMo was still fourth in smartphone market share. How much longer would you keep throwing money at it?”