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Microsoft acquires Xamarin: An obvious move not without risks

Remember the Nokia devices acquisition? That went well. Not

Analysis Microsoft is acquiring Xamarin, a move which goes to the heart of the company's new mobile strategy.

What is that strategy? Since Satya Nadella succeeded Steve Ballmer as CEO, the company has focused on a cross-platform mobile approach, creating strong versions of Office that run on Android and iOS as well as Windows 10 Mobile, and presenting its cloud services, from Office 365 to Azure, as a platform for any mobile client, rather than primarily for Windows.

Supporting diverse client operating systems presented an obvious difficulty for Microsoft's developer division, whose Visual Studio tools were all about Windows. Windows 10 was meant to usher in the era of the Universal Windows Platform (UWP), where developers can write one application and have it run on devices ranging from Raspberry Pi, smartphones and Xbox consoles, to tablets and PCs.

Unfortunately, Microsoft lost the mobile OS wars to iOS and Android. The UWP is all very well, but when your customers or users run non-Windows platforms, it is nowhere near universal enough.

Xamarin solved this problem, providing compilers for Microsoft's C# language that targeted iOS and Android. Microsoft embraced Xamarin as a key partner, for example giving the company prominence at its Build developer conference, and integrating its compilers into Visual Studio 2015. It was quite a turnaround from the early days of Mono, the open source implementation of C# and .NET from which Xamarin was born, and about which Microsoft was once wary, concerned that it would draw customers away from Windows.

Following this acquisition, Microsoft will have a developer stack that targets all the important desktop and mobile platforms. It is an obvious move, and as Microsoft's Corporate VP Scott Guthrie notes:

With today's acquisition announcement we will be taking this work much further to make our world class developer tools and services even better with deeper integration and seamless mobile app dev experiences. The combination of Xamarin, Visual Studio, Visual Studio Team Services, and Azure provides a complete mobile app dev solution that provides everything you need to develop, test, deliver and instrument mobile apps for every device.

One of the outcomes you can expect is that developing with Xamarin will become more accessible to Microsoft's developer community. A Xamarin subscription is expensive, and while this did not pose a problem to corporate users, it formed a barrier to small or independent developers. Following the acquisition, Microsoft will have the ability to bundle Xamarin's full compilers with Visual Studio, rather than offering them as trialware as is the case today.

Another likely consequence is that the UWP will be adapted to cover iOS and Android as well as Windows, as far as possible. Microsoft has some tricky work to do here, especially since Xamarin's implementation of XAML, the presentation language of UWP, is incompatible.

What's wrong with this picture? One of the risks is that Xamarin's open and collaborative culture, which it no doubt gets from the character of its founders Miguel de Icaza and Nat Friedman, will not be an easy fit with Microsoft's more traditional and bureaucratic corporate approach.

When I attended Xamarin's Evolve conference in October 2014, I was impressed by the energy and focus of its employees, and noted also that many of them worked remotely in an open source style. It was unlike any Microsoft event I have attended. Bringing such a company into Microsoft Corporation without impairing its effectiveness will not be easy, though if there is anyone there who can make it work, it probably is Scott Guthrie, who has long cultivated a more open and collaborative approach than is typical.

There are also risks in the overall strategy. Microsoft of all companies knows the benefits of controlling the operating system, since its business was built on integrating Windows both with applications such as Office, and with server applications such as SQL Server and Active Directory. When the company announced its acquisition of Nokia's devices business in September 2013, it seemed determined to build on its foothold in mobile, and that still seemed to be true as recently as April 2015, when Microsoft announced technologies to help developers bring apps from Android and iOS to Windows 10 Mobile. Then in June 2015 Nadella announced a shift in strategy and the departure of ex-Nokia CEO Stephen Elop.

Shortly thereafter came the news of extensive cutbacks to the phone division and write-down of the value of the assets acquired from Nokia. Instead of being the salvation of Microsoft's mobile platform, the Nokia acquisition proved to be part of its undoing. Absorbing an independent company that is supporting your platform does not always work out well.

The Xamarin acquisition – believed to be a $400m to $500m deal – confirms Microsoft's determination to transition its platform to one that supports a diversity of operating systems. All going well, it will also be good news for C#, the language of .NET. Microsoft's .NET Core initiative is making C# cross-platform on the server, and now with Xamarin it will be cross-platform for mobile and desktop applications as well.

The risks for Microsoft are considerable though, both in terms of making the acquisition work, and in keeping customers on its platform via applications that run on operating systems belonging to competitors. ®

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