Microsoft's latest mobile app acquisition shows it gets urgency

Buys Sunrise, another Android and iOS mobile app developer, to beef up Outlook

unbundling mobile apps

Microsoft on Wednesday confirmed that it had purchased mobile calendar app maker Sunrise Atelier, the second major acquisition in the last 11 weeks of a developer experienced in creating Android and iOS apps.

Financial terms were not disclosed by either Microsoft or the privately-held Sunrise, although reports have circulated that the price tag was about $100 million.

The Sunrise purchase was Microsoft's second deal since Dec. 1, 2014, when it bought Acompli, the creator of the same-named email client for Android and iOS, for a reported $200 million.

"We are making this acquisition because we believe a reinvention in the way people use calendars on mobile devices is long overdue," said Rajesh Jha, head of Outlook and Office 365 at Microsoft, in a Wednesday blog announcing the Sunrise buy.

Sunrise for iPhone

Microsoft snapped up the company behind Sunrise Calendar, an Android and iOS app (shown here), the second acquisition in the last three months that furthers Redmond's 'cloud-first, mobile-first' strategy.

Unlike the Acompli email apps, which were pulled from Google Play and Apple's App Store after their maker was snapped up by Microsoft, the Sunrise Calendar apps will remain available, as will the OS X version and a browser-based app.

Microsoft, which folded Acompli into its new Outlook app for Android and iOS, has not said whether it will do the same with Sunrise. "In the coming months, we'll share more about how we'll build on [Sunrise's] success and apply Sunrise's innovations to other Microsoft apps and services," Jha wrote.

Most expect Microsoft to push Sunrise into Outlook on Android and iOS, including Jan Dawson, chief analyst with Jackdaw Research. "But all this technology has to make it back into the desktop clients as well," said Dawson, talking about Outlook in the personal computer editions of Office for Windows and OS X. "Even the new Outlook for Mac is very much the old kind of Outlook. What's worth watching is how much the desktop clients are driven by this acquisition."

While some have seen Microsoft's acquisitions of Acompli and Sunrise as a sign of weakness -- that the software giant is spending its way into its cross-platform strategy because it cannot create well-received mobile apps on its own -- Dawson disagreed.

"These signal an openness at Microsoft to do things differently," Dawson said. "Microsoft does good stuff in-house, but much of the innovation today is done by startups on mobile platforms, and Microsoft is wisely tapping into that."

Last week, after reports first surfaced of Microsoft's purchase of Sunrise, Dawson characterized the recent mobile app developer acquisitions in largely positive terms. In a piece on Tech.pinions, Dawson said they signaled that Microsoft understood both the urgency of moving on its CEO's "cloud-first, mobile-first" strategy and the difficulty in doing that exclusively within the company.

"I think the two are connected," said Dawson. "Part of the urgency is the culture within Microsoft. They sense that they have to get moving on this cross-platform mobile strategy, and that they do not have the skill sets and right technologies themselves."

To Dawson, the acquisitions show that Microsoft has acknowledged its prior failures in building compelling service-agnostic apps that run on rivals' platforms, and has realized that it must do that faster than it could create them in-house. "Microsoft probably could develop some of these apps on its own. But it would take a long time and Microsoft clearly doesn't think it has that time," Dawson wrote on Tech.pinions.

Also in play is the company's long-standing cultural preference for creating on Windows, with little if any thought to other platforms, even if those have the vast bulk of the mobile device market. Buying smaller companies with proven expertise in building Android and iOS apps lets Microsoft sidestep the Windows-first attitude that still dominates its engineering staff.

"[These acquisitions] shouldn't trigger despair but hope on the part of those who have faith Microsoft will do better," Dawson wrote. "That Microsoft is willing to accept it perhaps doesn't have the wherewithal to create these products, given the people and assets it has, is a positive sign, not a negative one, at this point."

Like Acompli, Sunrise not only comes in editions that run on both Android and iOS, but also taps into a variety of services from rivals, not just Microsoft's own Exchange, still the standard for businesses. Sunrise, for example, gathers appointment data from Google's and Apple's calendar services, as well as Exchange. It also pulls in reminders, events and to-dos from the likes of Evernote, Facebook and Todoist.

The true test for Microsoft, said Dawson, will be how well it expands the footprint of the acquired technologies and user experiences beyond mobile and onto the desktop. That's necessary to make good on Microsoft's expressed plan to create software that works, looks and operates similarly on all devices, on all platforms.

Dawson cited the Mac edition of Office as the old Microsoft, which favored Windows and only begrudgingly created a suite for OS X, one that most saw as sub-standard. With Windows' share of all devices rapidly falling as iOS, and especially Android, dominate smartphones and tablets -- and as Windows-powered personal computer sales slump or at best stall -- Microsoft cannot afford that thinking: Apps on rival operating systems must be top-notch, not simply adequate.

The question remains, however, what Microsoft hopes to get out of spending millions on acquisitions like Acompli and Sunrise which fancy Android and iOS, not Windows.

The answer so far as been Office 365, particularly the business-grade subscription plans. To use the Android and iOS Outlook apps for work, users must have an Office 365 subscription through their employers. Making Outlook even more compelling by adding Sunrise to its calendar functionality would, under that theory, prompt more people to use the app for work, thus pressing businesses to adopt Office 365 or expand the number of seats under its licensing.

Microsoft also hopes to generate revenue by up-selling additional services to those companies, especially high-margin mobile management services like Enterprise Mobility Suite (EMS) and Intune, which tie into Office 365.

The Sunrise Calendar apps can be download from Google Play, the App Store and the Mac App Store.

Copyright © 2015 IDG Communications, Inc.

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