Microsoft Likes Danger

Back in October 2007, Ballmer, Venturebeat reported that: “Microsoft’s plans to acquire 20 companies per year for the next five years, ranging from $50 million to $1 billion.”

While Yahoo was many orders of magnitude larger than $1B, it seems like Microsoft’s voracious appetite is getting larger. The latest news is that Microsoft is acquiring Danger, most well known for making the Sidekick operating on the T-Mobile network. While all the details have yet to be solidified, it’s clear that Microsoft is playing a “winner take all” attitude. Software, Services, Content and now Hardware. Perhaps a new phrase should be added to the list of companies in technology.

A long time ago, the mantra was: IBM. You can’t go wrong/fired/etc with choosing IBM.

Now, perhaps the new one is: Microsoft. Always count on them for competition.

Well, let me take a moment to try and understand this one. You want to buy a handset maker who also has a server backend inside the carrier and has a rather closed environment for content? The hardware is pretty slick, the content and services are pretty cool too. But with only one carrier install and several rounds of burnt VC money, one might want to take a second or third look before pulling the trigger.

So what’s the deal here? How does this fit into the overall strategy? Well, here is a guess. People thought the Xbox was a crazy idea. But if Microsoft is going to push into the home and be aligned by Bill Gates’ mantra of “a computer in every home running Windows” the Xbox could certainly represent that. And why not offer an Xbox mobile to compete with Sony PSP, Nintendo DS, and Nokia n-gage? So this might be an extension of the mantra: “a mobile in each person’s hand running Windows.” And the numbers don’t lie. While WM (Windows Mobile) still represents a small percentage of the global totals, it is significantly increasing by leaps and bounds.

OK, well what about the server backend? Well, Microsoft has traditionally been an underdog in telco infrastructure in comparison to Sun, Oracle, BEA, and even Linux. But Microsoft getting their hands on Danger’s server backend could provide ideas and moreover a strong client, T-Mobile, which is one of the Top 5 carriers by total subscribers worldwide. Getting into telco infrastructure furthers the agenda of Microsoft in every vertical.

Lastly, the content and services side. This one might be a toss up. With Xbox, MSN, ad services, location and mapping services as well as a myriad of other content relationships, it may be better to fill the channel with all that Microsoft can bring to the table.

Furthermore, the acquisition of Danger, puts the handset guys on notice. Similar to Oracle buying Peoplesoft, then Siebel Systems, and the latest, BEA Systems, I sense a similar pattern will happen in the handset space. I won’t go so far to say that RIM is next, but it *has* to be on the radar screen. HTC, Pantech, SonyEricsson?!? Who knows! One things is for sure: Microsoft moves are become regular topics in management team meetings.

And I can’t wait to see what’s next.