August 25, 1999 1:40 PM PDT

Microsoft venture faces product delays

The wireless communications joint venture between Microsoft and Qualcomm will delay the commercial availability of its wireless data service until the first quarter of 2000, according to executives.

Having originally expected to offer its Revolv service in late summer or during the third quarter, the WirelessKnowledge venture now expects to release its service roughly three to six months behind schedule.

Microsoft and Qualcomm brought a certain star power and experience to the wireless data table that could have helped jump-start a market that so far has made big promises but hasn't delivered. But after announcing the joint venture last year and boasting of big-name partners, WirelessKnowledge to date has remained mostly hush-hush.

"They've been very quiet, which suggests problems," said Jane Zweig, executive vice president at wireless industry research firm Herschel Shosteck Associates.

Any delays in service stand to impact WirelessKnowledge's bottom line. Many Wall Street analysts say the market will flourish over the next few years, with more than 36 million people expected to subscribe to a wireless data service by 2003, according to a recent Dataquest study.

Revolv, WirelessKnowlege's first service offering, allows executives on the road to access email, calendars, phone lists, or other information that is located on Microsoft Exchange-based corporate networks through mobile phones or other wireless devices.

Analysts have come to expect delays in the introduction of wireless data services, since the two industries involved--wireless and the Internet--are still young. The lack of mobile phones that are able to handle data transmissions, as well as the slow build-out of wireless networks, have also contributed to problems industry-wide.

"WirelessKnowledge has some strong backing behind it. But the downfall with WirelessKnowledge is that they have to deliver, because the cynics will say 'If they can't do it, nobody can,'" said Iain Gillott, a wireless analyst at International Data Corporation. "It looks great on paper. The idea is great. Now just go do it."

Technical setbacks
Dave Whalen, vice president of sales and marketing for WirelessKnowledge, said the company has faced a number of technical problems when connecting its Revolv service to corporate networks, especially virtual private networks (VPNs). A VPN is a network of computers that uses certain security features to keep unwanted visitors out.

"Making firewall X work with router Y has been much more challenging than people initially thought," Whalen said.

A dearth of data-enabled phones and other devices has also contributed to company setbacks. "When you add all of [the problems] together, the market is slower than we would rather see," Whalen said.

Coming soon
Executives believe the delays will allow the company to improve its Revolv service. Whalen said the temporary setbacks are "probably for the best" and the company is "taking to heart" much of the feedback it is getting from field trials.

Like competitors Saraide and Open Sky, WirelessKnowledge opens new markets for Microsoft and Qualcomm by primarily pushing their own products--Microsoft Exchange-based servers and Qualcomm mobile phone handsets, in this case.

"No one's doing this out of altruism," Herschel Shosteck Associates' Zweig said.

Yet WirelessKnowledge has plans to expand its support for other non-Microsoft technologies. The company plans to support other collaborative workgroup software products, such as Lotus Notes and POP 3 email, next year, Whalen said.

Analysts still hold that despite the delays, WirelessKnowledge is in good shape to capitalize on the market's desire for access to data while on the go.

"I'd like them to be quicker [but] they're pretty much where we'd expect them to be," Gillott said. "If they're delayed past the first quarter, they're going to have some serious questions to answer."

 

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