Why Microsoft’s Mobile Screw-up is Worse Than They Realize

It was not long ago when popular Microsoft products such as Windows, Office, Outlook, Internet Explorer, etc. were used for just about everything.  Macs continue to erode the Windows gold standard operating systems.  Firefox, Safari, and Chrome have made the once monopolistic Internet Explorer capture only 50% of the internet browser market today.  And Open Office and Google Docs are starting to steal users from Microsoft’s profitable Office suite, especially rendering their complex collaboration features obsolete.

The one thing that may appear to be stable today is Microsoft Outlook and the associated Exchange client-server.  For those not familiar, the basic idea of Microsoft Exchange is that it provides a powerful email, scheduling, and global address service for medium and large businesses.  The Exchange server acts as the back-end service while Outlook (the Exchange client) provides end-users with email, calendar, contacts and task tools, among other features.

It was also not too long ago when Windows Mobile was a powerful operating system for mobile phones.  While never priding itself as a great web browsing or multi-media experience, the one thing Windows Mobile operating systems have had are native Exchange clients.  In other words, Microsoft Outlook penetrated much of the pre-installed software on the phone.  Unlike a lot of other “bloatware” that comes preloaded on phones, the native Exchange was actually a good thing.  Emails would be delivered directly to your Messages app, phone numbers of Outlook contacts would be stored in the phonebook, and calendar items would synchronize between your phone and Outlook automatically and over the air.

Realizing that Microsoft Exchange nearly served the complete market of enterprise businesses, iPhone, BlackBerry, and Android incorporate Exchange synchronization and functionality.  However, as one would expect, the synchronization is not nearly as seamless as it is on a Windows Mobile phone.  For instance, fields that may contain data in an Outlook contact may not be available on a BlackBerry.  Another example is that calendar/appointment reminders are different between Outlook and iPhone.  And perhaps worst of all, the powerful Outlook task list doesn’t even synchronize with Android mobile operating systems.

Given the utility of a Windows Mobile phone with a native Exchange client, it had everything going for it.  The whole Microsoft ecosystem could be leveraged.  As other phone manufacturers and mobile operating systems began to gain popularity, Microsoft just rode its laurels.  This is not news though – we all know this, and Steve Ballmer eventually fired the head of mobile.

"Right now, [Microsoft] is selling millions and millions and millions of phones, and Apple is selling zero."

After Microsoft’s mocking of the iPhone, they effectively disappeared from the landscape of mobile phones.  They have tried to reinvigorate the product with Windows Phone 7, but this has all but failed.  (On a side note, there are 6 unique models of Windows Phone, and none are available on Verizon and not one has a fixed qwerty keyboard.  Who are they actually trying to compete with?)  But the worst is yet to come.  Because of this mobile screw-up, Microsoft’s “old faithful” – the Exchange server and Outlook client – are in trouble.  Why would users deal with the inconsistent integration of Exchange into other mobile phones when they can just use native applications, e.g., gmail and calendar for Android?  Indeed, Google Apps is being heavily marketed toward enterprise customers.  Google doesn’t currently have a task list, but something like it has to be in the works.

Therefore, because more work is continually conducted on mobiles, and because almost no one uses Windows Phones, enterprise customers may likely start switching to other services offered as native applications on mobile phones, such as those offered by Apple or Google.  The logical next step would be for those enterprise customers to adapt their office workstations to the new clients.  Losing Exchange server and Outlook revenue is when Microsoft’s real blood bath will begin.