Original URL: http://www.theregister.co.uk/2007/02/17/vodafone_microsoft_cellular_im/

Vodafone caves in to Microsoft IM

Undermines GSMA platform

By Faultline

Posted in Mobile, 17th February 2007 09:02 GMT

Comment Among all of Microsoft's announcements at the 3GSM show was buried a piece of news that almost certainly means the end for the unification of cellular instant messaging efforts around a GSM Association standard.

Exactly a year ago at last year's 3GSM show, 15 operators led by Vodafone, Orange, T-Mobile, China Mobile, O2, Telefonica, and Turkcell, who covered over 700 million mobile phone users, said they would develop a single Instant Messenger application that would mean that as SMS messaging is replaced by IM, then most operator networks would be in sync with each other and able to swap messages.

The real reason behind that standard, which appears to be stillborn with the announcement that Vodafone will use a Microsoft developed system, is because cellular operators wanted to remain immune from the dilution of SMS revenues, that a third party hosted IM might trigger, which might have taken as much as 20 per cent of most operator's profits away at a stroke.

Around the same time last year every one of the major IM offerings including Yahoo, Microsoft, AOL, Google and Skype all announced initiatives to put their IM services onto handsets, mostly with US based Cellcos. But now it appears that Microsoft will both host and develop the Vodafone system.

Vodafone and Orange were at the heart of last year's IM announcement and were said to be extremely keen to be the first to get IM interoperability working on their devices, while Orange wanted to offer a common IM service between Orange customers and Wanadoo broadband customers.

That same convergence pressure will emerge throughout the development of any quadruple play, where an operator has both broadband customers and cellular customers, it will want them to be able to talk together with text based messages at least, and full IM capability if possible. Vodafone of course is one such operator that is embarking on a full quadruple play roadmap, beginning with the introduction of bundles in Germany with the ISP it owns there and a deal in the UK to wholesale BT broadband lines.

Now it looks like Microsoft will even host the Vodafone IM traffic. With Vodafone and Orange no longer supporting the IM consortium that was launched last year, deserting the independent IM idea, it's now unlikely that anyone will continue with it, especially since the idea was supposed to be ready during 2006, and nothing has been heard of it since.

When Orange first said Microsoft was helping it with its IM service, it tried hard not to say that it was embracing the Microsoft code base and the fact that it did has only just become obvious.

The main difference between SMS and IM messaging is real time delivery, which 3G networks are more than capable of handling now with increased total bandwidth and lower latency. IM, as opposed to SMS, would mean that interfaces could be developed which arrange messages into separate conversational threads rather than in strict order of arrival and IM traffic can be opened up to groups, not just between two individuals.

In the US, where texting is not so prevalent as in Europe and the Far East, instant messaging services have been largely outsourced to AOL and Yahoo. IM is now seen as replacing the Multimedia Messaging Service, which has failed to replace or even augment SMS revenues, partially because it really needs the connections with the existing IM world of PCs.

Last year Microsoft and Yahoo! buried the hatchet and agreed to allow their IM networks to interoperate, a key step to building a flat global IM network.

Vodafone says the new IM service will be launched in select European markets later this year and will let customers use their address book and see when their contacts are online seamlessly on a PC or a mobile.

Orange launched its own Orange Messenger in December and it will roll it out in other countries in Europe now.

IM on a mobile phone is also seen as a generalised IP route into the handset, and as on a PC it can also be used for IP voice, photos and even potentially video. Initially, the cellular operators felt it was important to avoid a software platform from outside the cellular community coming to dominate this, but now it looks like the effort of hosting such a network looks daunting and Vodafone would rather let Microsoft have the headache.

Microsoft confirmed to us that a variety of business models were being considered by Vodafone, including offering IM as a subscription service and the use of advertising to mitigate costs.

But the Microsoft headlines at the show were in fact captured not by its quiet winning over of cellular IM in Europe, but its launch of Windows Mobile version 6.0 and the fact that Vodafone, T-Mobile and Carphone Warehouse have all taken hosted push email services from Microsoft and AT&T's Cingular Wireless is taking its Live Meeting teleconferencing software.

While Faultline has been of the view that Microsoft should be targeting services above the operating system level, Microsoft Communications Sector general manager Michael O'Hara agreed but said: "Yes, but that doesn't mean that we shouldn't also develop our own operating system platform," and told us that it has a new user interface, most of the Office suite tools and a focus on getting things done in "one click".

It also has stronger protection of personal information, including the ability to remotely wipe all data from a device when lost or stolen, and it offers improved handset search.

Windows Mobile 6 allows HTML formatted email, with live links to the web, and is available from a corporate e-mail server like Exchange Server 2007, or from Windows Live Hotmail.

Microsoft said Cingular, Orange, SoftBank and T-Mobile Dash will be updating to Windows Mobile 6 in the coming months, as will manufacturers LG Electronics, Motorola, Palm, Samsung, and Toshiba.

We can't think of anything worse than having Microsoft Office on our phone, but it seems to be a strong sales feature in that enterprises don't have a training burden when introducing it so Microsot makes the point that the new mobile versions of Outlook, Word, Excel and PowerPoint all work the same on a PC or a handset.

But many of the important developments for Microsoft at the show were almost invisible. Its ability to allow services to interact behind the scenes is what has been driving Microsoft's success in the telecoms sector and behind that is the Connected Services Framework (CSF) that sits above the network level, living on servers in the network, doing just what the moniker says, connecting services together. We liken this to the applications layer of IMS, with genuine applications giving calls to CSF, which shares services between them and in turn gives calls to the .NET Framework and then down into the network layers, perhaps using IMS. It is CSF that is behind all of the interaction between email, IM, hosted VoIP, Live Meeting and every other service that extends out of a piece of Microsoft software.

This year the CSF team is taking the concept out towards device virtualisation and offering to retain for operators the internal details of the capability of each device. It can then split a service deliverable from the platform element, which simplifies the core application but then subsequently changes an image or a message to a format that will fit the specified device.

Now CSF can manage the binding of services to a virtual device instead of leaving this to the operator and ensure that the right formats across multiple service types find their way to each handset.

Copyright © 2007, Faultline

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