UPDATE: Microsoft Buys STNC

Microsoft Corp. has acquired STNC, a U.K.-based software development company whose software provides access to intranets and the Internet from mobile devices, including phones and PDAs (personal digital assistants).

The company will be fully integrated into Microsoft's productivity appliances division, Microsoft announced today in a statement. STNC's technology will be used in future digital cellular products to let users read e-mail, view calendars and access the Internet, Microsoft said.

STNC's software will allow mobile professionals to access information on the move. Currently, there are no released products running the software, said Ran Mokady, chief executive officer of STNC in an interview with IDG News Service today.

"We will actually be integrating the technology into both our microbrowser and also the Windows CE solution (for smartphones) that is a longer term project," said Phil Holden Group Product Manager for Windows CE at Microsoft in an interview with IDG News Service today.

"The other critical part is their actual location. Not only do they have a group of talented engineers, but they are located in Europe," said Holden. The location is important, not only because of all of the activity with regard to wireless Internet in Europe, but also because of the proximity to Microsoft's partner, British Telecommunications PLC, said Holden. Microsoft and BT are working to develop applications for wireless access that will be marketed to corporate clients through BT's Concert, a company that sells telecom services to multinational corporations.

Currently STNC has technology partnerships with L.M. Ericsson Telephone Co., Psion PLC, Symbian Ltd. and other makers of operating systems and hardware for mobile phones. Symbian, a joint venture between Psion and a number of mobile phone producers is competing with Microsoft Windows CE to be the platform of choice for connected handheld devices and smartphones.

"STNC has a number of business relationships. Those will be honored. If STNC's partners would like to come on board ... licensing technology, they will be welcome," said Holden.

"Most of our customers have come back with positive feedback on the acquisition," said Mokady.

STNC, with 40 employees, is privately owned but has been backed by venture capital firm 3i PLC.

Mokady will become a director of the productivity appliances division.

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