Earlier this week Microsoft (MSFT) announced the addition of a new capability for Windows Azure called Windows Azure Mobile Services. This service will allow developers to add a cloud backend to their Windows 8 application, with support for mobile platforms including Windows Phone 8, iOS and Android in development. Developers will be able to store data in the cloud, authenticate users, and send out push notifications to clients using the new platform. This service could become a huge advantage for Microsoft as it will enable companies to deploy mobile apps to employees through the cloud without server side coding. Perhaps just as importantly, it will allow developers to deliver mobile apps that will run on every Microsoft desktop - providing a platform that is bigger than Apple's (AAPL) and Google's (GOOG) combined.
Although we are in an increasingly mobile world, Microsoft still owns the desktop and knows it. There are many millions of people whiling away their time on PCs at work. Microsoft believes it can eventually funnel these people over to its own mobile platform, Windows Phone. Next Microsoft will be joining Google in providing users with a way to pay for services and products using their phones. Microsoft's Windows Phone 8 will enable such technology as well incorporate a wallet application (similar to Google Wallet) that will store credit cards, coupons and other payment information. Apple's Passport, announced in June, matches most of the feature set of Google's Wallet, in that it allows users to store airplane tickets, concert tickets and other passes digitally. If rumors are correct that the new iPhone will include a NFC chip, then Apple will also join Google (most notably in combination with the Samsung Galaxy S3) in enabling users to actually pay for goods and services with their phones.
As Facebook (FB) has shown, making money off a mobile app (even if it may be the biggest of some 500 million out there) is not a facile matter. All of these giants will be looking to partner with, or acquire, smaller companies with very specific expertise to achieve this goal. As I posited earlier, these mobile sector "service" companies, namely Vringo Inc. (VRNG), Mimvi (MIMV.OB) Millennial Media Inc, (MM) Synacor Inc. (SYNC) and Mitek Systems Inc. (MITK) are worth keeping an eye on. Just as Facebook acquired Instagram and Apple purchased Chomp, expect more acquisitions and partnerships from these two companies as well as from Google and Microsoft.
The Mother Lode
If making money off mobile apps is the Holy Grail, then getting users to pay for goods and services WITH their mobile phones may prove to be even more valuable. If you compare the mobile marketplace to the Gold Rush, then there may well be a few very wealthy prospectors at the end of the era. But it is much more likely that the provisions providers come away with the greater share. After all, a hundred and fifty years after the San Francisco Gold Rush, the name of Levi Strauss & Co. still stands tall. So it is the companies building the mobile payment infrastructure that will benefit most over the long term. With the release of Windows Azure Mobile Services and the upcoming Windows 8, Microsoft may be a better investment than in many years. And for those less conservative investors, the price point of Vringo, Mimvi, Millennial Media, Synacor and Mitek Systems may just yield the mother lode.